Tuesday, September 30, 2008
Donald Trump: ‘McCain will force OPEC to lower oil prices’
I was listening to CNN this morning and Donald Trump was on the phone saying that he supports John McCain for President. Not that I’m surprised. I’m sure that most mega-millionaires are supporting John McCain for President. After all, he wants to lower their taxes while Barack Obama wants to raise their taxes.
It turns out that not the reason The Donald is supporting McCain. Supposedly, it’s because he thinks McCain will go to OPEC and “make” them lower oil prices. He then offered up an analogy. He said that if he and somebody else owned similar stores and they got together and decided collectively how much to charge for certain items, they would end up in jail. The problem with that logic is that OPEC does not set the price of oil. They collectively decide how much oil they will produce.
Why doesn’t Donald Trump know this?
OPEC doesn’t set the price for oil. The world oil market does that. That’s one of the reasons allowing oil companies to drill off-shore wont effect the price of oil. OPEC would almost certainly decrease their oil production to match any increase in oil production here in the United States. The amount of available oil on the world market would remain the same. The oil companies would certainly make even more money then they make now, but the price we as consumers pay wont change.
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