I commented on gas prices in an earlier blog post, but I feel that more needs to be said.
Barack Obama, the presumptive Democratic Nominee, has said that if elected, he would impose a windfall profits tax on oil companies. It is said that companies like Chevron and Exxon Mobile have made an “unfair profit, ” and that they should have to give the excess money that they made “back to the American people.” Obama himself has said:
“I’ll make oil companies like Exxon pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs and other bills.”
Other liberals have spouted similar rhetoric. Here’s Hillary Clinton:
She wants to “take” their profits.
Obama and Hillary aren’t the only ones. Every Democrat in the Senate– as well as two Republicans– voted for such a windfall profits tax, which– thankfully– did not pass.
If you take away the windfall profits of oil companies, they will be unable to reinvest in new supply; they will be forced to slow their own production of crude oil. Where will they go for crude oil then? Ah, yes, the Mideast; where else? But buying their crude oil from the Mideast will be much more expensive than it would be if they were able to process it themselves. Unfortunately, they won’t be able to because Obama will have “taken” the money that they would need. But what does all of this mean for the average American?
As George Will notes in a video that is viewable here, Corporations don’t pay taxes, they just raise their prices, and the consumer pays them. Taxing away gas companies’ profits will only hurt the American consumer. That’s what happened in the 80’s under Carter’s profits tax, and it will happen again under a similar Obama tax– only this time it will be much worse. Why? Because this time around supply is being even further restricted by environmentalist congressmen–Democrats mostly. What exactly are they doing to restrict the supply of oil? First, a bit of history.
In 1995, Congress passed legislation that would have allowed oil production on a small fraction– less than one tenth of one percent– of ANWR. With this land designated for oil production, America could have produced an estimated 10 billion barrels of oil. Such a measure would certainly have been a huge step toward relieving America of its dependence on foreign oil, but the bill was vetoed by Clinton. Why? The same reason that the Democratically controlled Congress opposes the same drilling in the present day– Environmentalism.
Democrats today want the same things they wanted in ‘95: A complete and permanent halt of all development on ANWR, as well as a ban on offshore drilling on the east and west coast of the United States. The men who draft such proposals talk about the devastating effects that such acts, if taken, would have on the affected ecosystems. Not only are these claims unfounded (offshore drilling has actually been fairly clean since the ’70s, and as I said above, the ANWR drilling in question would be over less than .01% of the reserved land, thus affecting little of the wildlife, if any), but it is my sincere belief that the men who make them do not believe what they themselves are saying, and their motives are sinister in nature.
Think hard about what the liberals in Congress actually want.
First, they want a huge windfall profits tax of at least 25% on an industry that already has 45% of its income taxed, an action that will cause a decrease in supply, a rise in demand, and ultimately, an increase in gas prices. Next, they want to ban oil exploration and drilling everywhere. But thats not all: liberals want heavier taxes on coal companies, as well as the continuation of a very heavy tariff on ethanol from Brazil, which is a de facto ban. And it doesn’t even stop there: most liberals, including ‘Bama, do not support nuclear energy, the cleanest, safest energy source known to man, because– guess why? Environmental hazards.
If Barack Obama is elected president, this kind of supply restriction will occur, and it will result in a kind of perfect storm for the American consumer. Over time, gas prices will hit an unimaginable level, and the American economy will be devastated. But just as always, the guilty parties will receive no blame. The blame will fall on “greedy corporations,” and like fuel onto a fire, more harmful restrictions will surely be put in place.
If liberal Congressmen actually wanted lower gas prices for Americans, they would take the opposite position on all of the above issues. But they don’t. Why not?? These men are not stupid; they are not misguided; they are elected officials; they all have been well educated, and have a significant amount of experience in the world. They know what they are doing. They want our gas prices to go higher. George Will put it well when he said:
“On the left in this country what they want is a manufactured scarcity so that government can have the rationale to ration [oil supplies], which gives the government what the left wants: an ever more minute supervision of our daily choices.”
And while this is what the left wants on the surface, it is only a means to an end, which is, ultimately: the destruction of all that is good. The Dems in congress hate the profits of the oil companies, not because they are evil, but because they are good. They hate the production of oil refineries and drilling for oil, not because those things represent ruin, as they claim, but because they represent production. They consider that which is good to be evil because it is good. Ayn Rand wrote about this view of life in her book, Atlas Shrugged:
They do not want to own your fortune, they want you to lose it; they do not want to succeed, they want you to fail; they do not want to live, they want you to die; they desire nothing, they hate existence, and they keep running, each trying not to learn that the object of his hatred is himself . . . . They are the essence of evil, they, those anti-living objects who seek, by devouring the world, to fill the selfless zero of their soul. It is not your wealth that they’re after. Theirs is a conspiracy against the mind, which means: against life and man.
How can we defeat this kind of evil? As believers in Capitalism and the free market, we have historically put ourselves at a disadvantage. We must start believing that we are right, and that what we believe in is virtuous. We cannot win a fight in which we consider ourselves to be evil, and our opponent good.
We allow these men to escape from moral judgement by accepting that the cause that they say they fight for– environmentalism– is virtuous. As I have said before, to hold nature as an end in and of itself is not a moral position, it is an immoral one. All of that which is anti-mind is anti-life. By accepting the premise that environmentalism is a fundamentally positive ideal, we are giving them a moral sanction that they do not deserve. It is for this reason that we get candidates like John McCain, who compromise progress and pay lip service to “stewardship of creation.” McCain tentatively supports offshore drilling, but only recently, and only because it has become so politically convenient in the last few months.
Proclaim Capitalism to be your moral sanction, and that each man’s right to his own life is an absolute that cannot be superseded by any legislature. This is the truth they fear, but will never admit.
Tell it.
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http://elizabethcrum.blogivists.com/2008/06/30/twinkle-twinkle-little-star/
Thomas L Friedman a few years ago suggested that the gov’t institute a price floor (yes, a price floor) at $5 or $6 a gallon. Then take the tax revenue and use it to cut other taxes. There’s some DWL, but not a lot. We then force the economy into shifting from pickup trucks to Priuses.
To blindly pursue low oil prices wholly ignores the gravely negative externality of funding Petrostates.
Americans consume vast amounts of Oil, leaving us beholden to “foreign entanglements.”
Americans are greedy and materialistic and refuse to give up their SUV’s and Trucks (before you protest, it is the fact that an individual is greedy and materialistic that makes capitalism the working economic theory and socialism a pipe dream).
Car companies make what customers buy. Customers buy SUV’s, so they make SUV’s and don’t spend as much R&D money on electric cars, sedans, compacts (because people are buying something else).
Gas prices rise to now intolerable limits. Customers stop buying SUV’s as the cost to maintain is greater than the perceived rewards of owning an SUV (status, distraction from an abnormally small appendage).
Car companies now spend R&D money to make what customers are now buying: hybrid cars, electric cars (see Chevy Volt).
I personally support higher gas prices. The higher the gas prices, the quicker the transition away from gas-based motor vehicles, and the greater the independence from foreign nationals and oil supplies.
Once the move hits critical mass (meaning the trend towards electric/hybrid vehicles will continue regardless of gas prices), gas prices will begin to drop as demand drops to where the only customers will be airliners and any other specialty transportation activities (public transport, trains, etc.).
In short: it hurts, it’s painful, but it’s the only way to get the bulk of the populace to move into a more resource efficient state.
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