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Letters: Oil futures and rising prices

As gas prices accelerated, this was the sign

As gas prices accelerated, this was the sign on a station in West Islip. Prices at the end of April have begun to come down. (April 4, 2012) Photo Credit: Newsday / J. Conrad Williams, Jr.

The letter "Tax financiers at 99 percent" [April 11] stated, "A 99 percent top marginal federal rate on personal income over, say, $5 million or $10 million is simple justice."

What the writer fails to recognize is that we are not a socialist democracy, at least not quite yet. Our economy is still based on free enterprise.

In his scenario, the writer forgets that the speculators, truckers, farmers and retailers on the good side of the mountain all make a profit and pay taxes to build and maintain the roads. Dollar-wise, speculators pay way more than the others.

The people on the side of the mountain that suffered drought could be assisted by individual charity. The Farm Aid concerts in the 1980s, which raised money for family farms, is one example.

Suppose both sides of the mountain enjoyed bountiful harvests. Farmers, truckers and retailers would make a profit, but speculators could lose money because prices went down. Do we reimburse 99 percent of their losses? No.

Ed Poline, Baldwin

It was a pleasure to read the letter exposing writer Donald J. Boudreaux's thinly veiled attempt to justify the appalling way the major oil companies, through the futures speculators, are exploiting the American public and are reaping windfall profits [Opinon, "Oil speculation isn't an unctuous art," April 6].

Boudreaux's wheat shortage analogy is not nearly appropriate. The wheat shortage in his essay is real, while the gasoline or crude oil shortages are speculations, which may or may not happen, but are used as concrete determinations of oil prices.

Gasoline prices affect the price of every item that's being shipped by road, rail, water or air. With such a far-reaching effect on every citizen's life, this price should not be allowed to be determined by "ifs" "maybes" or "possibilities." The major oil companies do not "buy" the crude; they drill, pump, ship, refine, transport and sell the final product wholesale and retail. The price should be based on production cost plus a reasonable profit.

Basing the price of crude oil on futures creates a situation where all gas stations are selling at about the same price (within a few cents). This smacks of price-fixing, collusion and depression of competition.

Joseph Willinger, Selden