This is just hard to believe without watching it yourself: (h/t Expose The Left)
[gv data=”https://floppingaces.net/russertecon.flv”][/gv]
MR. RUSSERT: Mr. Secretary, if, if demand is up but supply is down, why are the profits so high?
MR. BODMAN: For that reason.
MR. RUSSERT: No, think about that.
MR. BODMAN: You know?
MR. RUSSERT: Play it out.
MR. BODMAN: Demand is up.
MR. RUSSERT: Correct.
MR. BODMAN: Right?
MR. RUSSERT: Right.
MR. BODMAN: So you?ve got more demand, you?re going to force price up.
You?ve got, you?ve got limited supply, and you?re going to have?
MR. RUSSERT: But that?s a decision by the oil companies.
MR. BODMAN: No, it is not. That is a decision?those are?oil is traded every minute of every day, and it?s traded basically 24-by-seven. And it?s, it is determined in marketplaces in New York and London and Tokyo, all over the world. That?s the, the?the oil companies do not determine the price of oil; the producers determine the price of oil.
MR. RUSSERT: They determine, they determine, help determine the price at the pump. And if the, if their profits are going up, they have made a decision to add on the cost at the pump at such a level to guarantee higher profits.
Take a look at Jim Cramer’s face during this thing, classic.
This is just rudimentary economics that we all learn in friggin Jr. High so either Russert is plainly ignorant or he is playing the partisan. I know, shocker coming from the MSM.
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Mr. Curt
I think you’re being a bit too harsh on MR. RUSSERT.
It’s his big bug-eyes that make his statments sound so dumbass and mindless.
These days people only understand the eBay analogy. It goes like this:
You have a well in your yard and a pump and you can get 10 barrels of oil a day out of it. It costs you 10 dollars to pump and deliver a barrel of oil. You put the oil on eBay to sell it. As people bid on the oil, the price goes up. People buy your oil for $15 dollars a barrel and you make $5 per transaction and life is good. Now some kids named China and India that have only been buying one or two barrels a day from you decide they need more. You are still only pumping 10 barrels a day. This means they must outbid other people for the oil. Now your oil auctions settle for $50 a barrel and you make $40 per transaction and life just got better.
Now lets say I decide to make gasoline out of one of my barrels and sell that instead of selling crude. The people that don’t know econimcs are going to say fine, it costs you $10 to pump the oil, you don’t need to raise the price of gas. Back to eBay …
Lets say you can produce bolts of fabric for $10 and are selling them on eBay and they are bringing $20 so you make $10 each. Now lets say your fabric becomes very popular and it is now selling for $70. You have also been using one bolt a day to make socks. You were selling raw fabric for $20 and you were enough socks so you were getting $30 for the socks you could make out of that bolt of fabric. So after your wear and tear on equipment and your labor, you made what you thought was a fair profit.
Now your fabric is bringing $70. Are you going to sell a bolt’s worth of socks for $30? Are you going to spend all that labor and equipment cost to LOSE $40 a bolt compared to what you could just sell the crude for without refining it … I mean fabric for without sewing it?
No, of corse not. You are going to raise the price of your socks so that you make at least as much on the cloth from socks as you could selling the raw cloth … so the price of gasoline … I mean SOCKS goes up.