Oil Mergers On Deck

I think that allowing Exxon Mobile to aquire Royal Duch Shell would be the most physically irrisponsible thing that our present do nothing Senate and Congress could do, and it would result in more $4.00 a gallon gasoline, over night!

Lonnie, I know the argument that free markets don’t occur in reality, I’ve made that same argument, but it only addresses one aspect of reality. There’s a fundamental conflict between competition and economies of scale. The more you permit monopolies and quasi-monopolies to exist, the more vital it is to regulate those businesses in ways that offend “invisible hand” enthusiasts. Like every trade-off, there are two sides to it.

It’s a matter of degree. I could use the same argument you made about free markets to make the claim that (absolute) monopolies don’t really exist. In the relative absence of monopolies, competition can make a relatively valuable contribution to the operation of relatively free markets.

I’ve also made the arguments that markets don’t self-regulate (they send people running to the courts more often than any other aspect of our overly-litigious society) and they don’t innovate (as markets hate surprises, they relatively despise innovation.) There are lots of things the “invisible hand” isn’t good at, particularly in areas where accountability matters.

When I say free markets can’t operate in the presence of the many businesses we’ve encouraged to consolidate to monopolistic proportions, I use those terms in a relative sense. Like AIG, businesses that consolidate themselves into national indispensability are de facto public trusts, to the point that actually nationalizing them is only a formality. To allow such entities to exist without holding them accountable to the public is unsound policy.

So no, Exxon, Microsoft, Walmart, GE, AT&T, and others need to be broken up, unless we want to nationalize them outright. De facto public trusts completely free of public accountability are economic meltdowns waiting to happen again.

Exxon has a very conservative management methodology. Therefore, any acquisitions by Exxon should be beneficial to its shareholders, myself included, in a long run.
Given the competitive nature of integrated oil industry, including the participation of so many nationalized oil firms, Exxon should be allowed to buy any assets, which would help to maintain its leadership position in the industry.

Given a choice, I would rather that we Natioalize the Oil Industry. We have Nationalized the debt of the Financial Industry, why not grab a “profitable” group for a change?

the company should do whatever is best for its share holders…and Ken, a TRUE free market does not and never will exist, there will always be forces other than “natural” market forces trying to pressure it….

No. They should return excess capital to shareholders. It is a mature industry.

They have too much market share in the US already, approaching monopoly, and international acquisitions are dangerous; anybody hear of Venezuela ?

Since we passed ‘peak oil’ in the last few years, the oil industry has changed to ’sell as few barrels as possible for as much as possible’. It is maximizing profits from extraction of a resource that is not renewable.

Let the shareholders make the decisions as to where to place the excess capital by deciding if they want to buy more shares of Exxon or something else.

exxon was conservative…and they should pay for that by not being able to grow? maybe if citizens were also conservative they wouldn’t be where they are now. me…an exxon shareholder, am anxiously awaiting exxon to make a move. i held on when i could have cashed my shares in and stood my ground and am very happy i did. hopefully being conservative will pay off for me in the end afterall!

Due to the instability of many national oil companies, i.e., Venezuela, Russia, Nigeria and others, it only makes sense that ExxonMobil acquire another large oil company. Why? Because ExxonMobil has shown historically that they are one of the best managed companies in the world. For example, check out the auto companies, banks and others. Were they well managed? Only the big oil companies will be able to compete and survive against the national oil companies the the future.

What a silly (and misspelled) question.

One of the systemic ills of the US economy is excessive consolidation. Not only should Exxon not be permitted to acquire another oil company, they should be broken up, along with Walmart, bank of America, AT&T, Microsoft, and others. Free markets don’t work with monopolies in them.