Ben Stein On Oil Prices

Oil, Oil, Oil

By Ben Stein
Published 1/11/2006 2:14:03 AM

To begin at somewhere near the end, I am at a gas station in the small town of Calimesa in the high desert between Beverly Hills and Rancho Mirage. It's late at night, maybe 10 p.m., and it's cold. My wife and I are getting gasoline to put in our old Caddy and complete the drive home to make sure our son goes to school tomorrow.

As I pay the kindly attendant, George, a man who actually greets me, checks the oil, and pats our dogs, my head is spinning and it's spitting out thoughts like a mad laser printer. Here they are, as I remember them:

What a great world this is where I can get some people I don't even know to work on oil platforms out in the middle of the ocean, off the coast of Nigeria or Mexico, in the middle of nowhere in deserts in Libya, in jungles in Indonesia, on terrifying desert stretches in the Middle East, to bring me oil and gasoline to power my car for a price so low it makes me humble. The bottles of water in my car cost about a dollar a pint and they are a bargain brand and they come from a well in California. The gasoline I put in my car comes from ten thousand miles away, has to be brought here, refined, have huge taxes attached to it, and it's still thirty cents a pint. I am so grateful, and I am thinking how Senator Barbara Boxer and Senator Bill Frist want to surtax the oil companies for the superlative job they do bringing oil to us. WHY?

Why do politicians have it in for oil companies? What did the oil companies do wrong? They set their price based on world oil prices set by traders on Wall Street and in London who could not care less about how hard it is to find oil. There's no more John D. Rockefeller who could charge what he wanted for oil (and who, by the way, supervised a huge drop, not increase, in oil prices over his lifetime). There is no monopoly in oil. It is a world price, like wheat or copper or tungsten. Why beat up on oil companies when the price is high and oil companies raise their prices to cover replacing the oil they just sold? Why beat up on oil companies that -- over long periods -- make less profit on sales than the banking business, insurance, pharmaceuticals, and many other businesses?

And anyway, when did "profit" become a bad word? Isn't that what our whole system is about? Aren't profits what pay the dividends that allow men and women to retire? Aren't profits where the incentive comes from to find and provide more oil for us? Aren't profits what we all want for ourselves and our children? And why are profits in the oil business a bad thing but not a bad thing in the cable TV business or the soap business?

Why are people on Capitol Hill angry at the executives of the oil companies? They do an incredibly hard job in a difficult environment all so slobs like me can get our cars down the highway and have juice to cool and warm our homes and run our electric blankets and computers. They get paid a lot compared with what I get paid but very little compared with people in Hollywood -- and pennies compared with what successful men and women on Wall Street make. But they provide an indispensable service. Why aren't we grateful to them instead of yelling at them?

And why do we want to punish one of the most indispensable sectors of the economy by taxing it to death? What good ever came of heavy taxes on a vital sector? Why are we punishing companies we cannot live without?

And where does Barbara Boxer get off yelling at the oil companies' executives for their pay? She's best pals with plaintiffs' class action lawyers who get paid in a day what a big guy at big oil gets paid in a lifetime. And who provides a more useful service? Why isn't she angry at movie stars about their pay? What good do they do compared with bringing us gasoline? Can it be that Babs is just plain jealous of how efficient the oil companies are compared with her government? And isn't envy a terrible basis for public policy?

Well, all of this occurred to me, and then I gave my dogs a bowl of water, closed the door, waved good-bye to George, and headed off to home, and was glad that the oil companies, and not Barbara Boxer, were responsible for getting me there at a price I can afford.


Ben Stein is a writer, actor, economist, and lawyer living in Beverly Hills and Malibu. He also writes "Ben Stein's Diary" in every issue of The American Spectator.

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Ben makes some excellent points in this article. I've always been one to bash oil companies whenever the price of gas goes up at the pump, which is contradictory to my normal conservative views on capitalism and free enterprise. I suppose I'm letting the effect on my pocket book effect my reasoning. Time to rethink that position. Thanks Ben. You're always the voice of reason in a crazy, mixed-up world.