Supply, Demand, and Increasing Prices Just Because They Can

Well, there you have it. Exxon Mobil not only recorded the highest profits in its history, but in the history of American Capitalism. And this because consumers are paying exorbitant prices for gasoline!

Oil is an example of Economics 101 gone horribly wrong. In 2006, Exxon Mobil had to increase production to maintain supply at a steady level, and American demand remained pretty level even as prices skyrocketed (and excessive demand for oil in this country is a separate issue that I am not addressing here). The issue for me isn't that prices rose, because they'd have to rise on account of the increased production costs. The issue is that prices rose enough for a company to make more money than any other company in the history of American capitalism. The price increase was falsely high, and Exxon Mobil took advantage of oil supply issues and screwed us into paying more for oil than what we should have paid. It's not like oil is a product like detergent or socks or a cheap plastic toy - it's as necessary to American life as milk. If you could go without it, it adversely affects your life.

In addition, the record prices screwed other businesses. While Exxon Mobil was busy making their record profits, thousands of other companies were losing profits because of the cost of oil. They call this type of dependence a master-slave relationship.

Some sort of price control should be enforced over these companies. I'm not advocating for the nationalization of oil as I've heard from some people; I'm simply saying corporate greed is out of control, and companies that process natural resources should be governed much more strictly. As it is now under cronyism, they have free reign to do what they like, and there isn't much we as consumers can do about it. (And no, not buying oil is not an option in this country where public transportation is non-existent everywhere but major cities.)