June 11, 2008
"At a time of record oil prices and record profits -- when oil companies are getting various tax breaks and financial incentives from the federal government -- shouldn't those companies "be able to give something back to the consumer?" NBC's Matt Lauer asked McCain. "Absolutely," McCain replied.
"And they should be investing in alternative energy and they should be giving back to the consumer and they should be embarking on research and development that will pay off in reducing our dependence on foreign oil," McCain said.
"The point is, oil companies have got to be more participatory in alternate energy, in sharing their profits in a variety of ways, and there is very strong and justifiable emotion about their profits," McCain said.
Last month in North Carolina, McCain said, "I don't like obscene profits being made anywhere -- and I'd be glad to look not just at the windfall profits tax -- that's not what bothers me -- but we should look at any incentives that we are giving to people or industries or corporations that are distorting the market."
Kent Comments: I am not an economist, but I can usually detect some Baloney Sandwich when I see it. All the recent talk about “windfall profits” on the part of oil companies has “BS” written all over it. Let’s run through some items as they appear in this news story.
Notice how in Matt Lauer’s question (such a completely unbiased question), we are told (should good questions “tell” us anything?) that oil companies are making a lot of money and getting “tax breaks” from the government. Because of these two facts, Matt tells us (still in his question) that oil companies should “be able to give something back to the consumer.”
Isn’t it comforting to hear our Republican presidential nominee simply agree with this, without question or qualm? But that’s not the main point here.
So oil companies are getting “tax breaks.” Let’s rephrase that one: oil companies aren’t being taxed as much as they could be. Right now, oil companies are making decent profits, and by the reckoning of most news people and politicians, this means that oil companies should be taxed more and should give consumers some kind of discount.
That being the case, when oil company profits are low - and they have been low in the past - will these same news people and politicians call on the government to lower taxes on oil companies. Will they call on consumers to pay extra to the oil companies, beyond what they charge? For some reason, I have never heard anyone call for that!
Then, the pseudo-brilliant John McCain (who seems a more stupid every time I hear him speak) informs us that oil companies “have got to be more participatory in alternate energy, in sharing their profits in a variety of ways,” adding that “there is very strong and justifiable emotion about their profits.”
That is akin to telling an automobile manufacturer firm that it should be “more participatory in making motorcycles.” Oil companies extract and process oil. They collect people who are experts at that and that alone. Telling them to do other things is, well, stupid.
Now let’s talk about all that “emotion” about the profits of oil companies. If people are all that “emotional” about the profits of oil companies, there is something very immediate and practical that they can do. They can put their money where their big, fat, “emotional” mouths are - that is, they can buy oil company stocks.
If John McCain really wants to help people, here are two practical suggestions: urge the government to lower taxes on oil companies, and tell people to move their savings, IRAs, 401ks, and so forth - and participate in these large profits!
But John McCain doesn’t like “obscene profits” being made anywhere. Hey Johnny, here’s a hint: the biggest “obscene profit” being made is by the government. The government makes more in taxes on a gallon of gasoline than does any oil company.
John McCain thinks someone is “distorting the market.” Yes, someone is. That “someone” is the unholy alliance between governmental bureaucracy and environmentalists that prevents more oil from being extracted from the U.S.
Economic ignorance - whether it comes naturally or by concerted effort - is a very dangerous thing. It’s especially dangerous in politicians - a location where it is most often found.