This is a bad idea. If they tax oil companies on their profits (more than they are already taxed) then the cost will be passed on to the consumer. If gas prices are artificially lowered then the market will have little influence on the price, people will not be encouraged to use less, and we will have real shortage problems. Despite the cost of gasoline, the stock market closed at a 6 year high yesterday. The stock market was fueled by higher than expected earnings from No. 1 brewer Anheuser-Busch Cos. Now we are in real trouble. The number one producer of beer has had higher than expected earnings. Beer, as well as all alcohol, is taxed very heavily (just as oil is), so how long will it be before the Congress goes after the beer industry for “gouging” consumers. Consumers already pay more than $6.00 for a six pack (which contains less than a gallon of beer) and that is twice the price of gasoline.
How long can the American consumer put up with gouging at the package good store? How long before Congress requests the tax records of the beer companies? How long before we see the executives of America’s beer companies up on the Hill explaining how terrible they are for gouging people at the liquor store? Oh the tragedy of it all.
I am willing to bet Congress will never complain about how much alcohol producers charge for beer even though beer is more expensive than gas and the high prices of both are causing families to have to make a decision, beer or gas? How dare Anheuser-Busch charge so much when they are raking in “record” profits? Hell, now people will not only be unable to drive to their vacations, they won’t be able to have a few cold ones while sitting at home lamenting how a dollar a gallon difference from last year cancelled their vacations.
Chip Franklin from WBAL in Baltimore said this yesterday, If the one dollar difference in gas means you can not drive to the ocean (Ocean City Maryland) on vacation, you were probably sleeping in your car anyway. Chip is on target with this question and he understands the market much better than the knee-jerk politicians in DC. I hope the beer news does not change his mind….
In a related story, members of the Senate are saying we need to disband FEMA and start from scratch. They cite FEMA’s poor performance, bureaucracy, confusion, and lack of leadership as reasons to take this approach. If you think about it Congress fits that description perfectly so what do you say we disband Congress and start over from scratch there as well?
Source (for stock market and beer info): Reuters