Agoracom

Does any of this make any economic sense?

No. If every one of the top 10 executives of every major oil company in the world worked for free for the next year, the price of gasoline at the pump would not drop by a single penny. If oil companies substantially reduced their profits and thus their stock dividends, investment would fall, making it harder for them to afford exploration for and development of the new deposits necessary to keep supplies flowing. Supplies would drop; prices would go up.

On the other hand, if the senators were to halve the federal excise tax on gasoline, they could drop prices at the pump by more than a dime, overnight, all by themselves.

For that matter, oil price hikes haven't been nearly as onerous, nominally, in Europe, because the value of the euro is not being devalued by government policies there as fast as the dollar is being cheapened here. American gasoline prices are actually down over the past 70 years, if measured in a constant dollar.

Yes, the senators might get carried away and enact a "windfall profits tax" on "excessive" oil profits. But not only would that further drive up prices at the pump, it could also drive investment capital away from domestic oil producers -- thus encouraging more imports and further damaging our balance of payments.

Alternatively, the senators could demand that "Big Oil" be broken up into smaller, competing firms -- except that they already did that, in 1911, creating at least 35 separate companies including Atlantic (now ARCO), Chesebrough Manufacturing, Conoco, Continental, Marathon, Mobil, Pennzoil, Sohio, etc.

The oil executives, while hanging their heads and docilely going along with the ritual for the most part, did respond to direct questions including, "Is there anything you can do to lower gasoline prices?"

But when they timidly asserted it might help if they were allowed to drill proven reserves offshore or on Alaska's north slope, the senators made it clear they "weren't having any of that" nonsense.

What? Introduce simple economics, the laws of supply and demand, into a ritual that's all about generating video footage of the senators waving, howling and dramatically "doing something" about their constituents' ire against how little gasoline their shrunken dollars will now buy?