Very briefly on “Big Oil” profit legislation

Courtesy of the gentlemen at the GW Patriot, the W.S.J’s “What Is a ‘Windfall’ Profit?”

The “windfall profits” tax is back, with Barack Obama stumping again to apply it to a handful of big oil companies. Which raises a few questions: What is a “windfall” profit anyway? How does it differ from your everyday, run of the mill profit? Is it some absolute number, a matter of return on equity or sales — or does it merely depend on who earns it?

Enquiring entrepreneurs want to know. Unfortunately, Mr. Obama’s “emergency” plan, announced on Friday, doesn’t offer any clarity. To pay for “stimulus” checks of $1,000 for families and $500 for individuals, the Senator says government would take “a reasonable share” of oil company profits.

Mr. Obama didn’t bother to define “reasonable,” and neither did Dick Durbin, the second-ranking Senate Democrat, when he recently declared that “The oil companies need to know that there is a limit on how much profit they can take in this economy.” Really? This extraordinary redefinition of free-market success could use some parsing.

Now, I have little-to-no sympathy for “big oil”. Rarely offer I any sort of sympathy for big, period, and, irrespective of allegations of “price gouging” or “windfall profits”, my perspective, generally, predisposes me to oppose oil companies: As much as I love driving and, probably, partake in more than my fair share (Indiana-Maryland and back, multiple times, is hardly gas-conserving!) there-of, I have, for multitudinous reasons, serious qualms with the auto-mobile-reliant nature of our society, and am skeptically worried about global warming, not to mention the outrageous cost of gasoline at the pumps. None-the-less, this opinion piece resonates with my free-market tendencies, as well as my common sense. As the author notes, infra, these large oil companies also contribute prodigious sums to the tax coffers.

I’ve already made abundantly clear my belief that a second stimulus package is a ridiculous election-year ploy, lacking any intrinsic merit and poised only further to drive this spendthrift nation further into the cavernous recesses of fiscal perdition; taxing, additionally, an un-defined “reasonable” amount of oil companies’ profits strikes me as being the worst sort of demagogic pandering. We ought, of course, not to be surprised by Senator Obama’s succumbing to such typical games. He does, after all, represent Change.


Truth be told, I should prefer not to be stimulated, even if I needn’t pay $4.95 per minute.

Some-thing leaves me feeling particularly un-easy about the Democrats’ “Son of Stimulus” (Really, “Son of Stimulus”? Whether the creative title assigned by the majority party or the article’s author, this is just an un-believably stupid name.) plan to issue a re-peat of this spring’s “economic stimulus”. Perhaps, the following helps to explain my lack of confidence:

As for economists, some say it’s a good idea, if done differently from Round 1, but many are skeptical that money can start to circulate through the economy quickly enough. One reason for their concern: Surveys are finding that a major chunk of the money already doled out is going into savings instead of spending.

Saving, I believe, is a very good thing; perhaps, I err. Never-the-less, if, as seems to be the case, others agree me, and act upon such belief, rather than adhering to the words of consolation President Bush offered in the wake of 11 September 2001, to wit, “Go shopping!” (or some-thing to that effect), why ought the government, hoping to stimulate the economy, to return money to the tax-payers instead of, say, paying off a slight bit more of the im-moral debt that it has, in various incarnations over the decades, incurred?

Mis-understand me not, I implore: I rather like the idea of hard-working (and, even, lazy!) Americans keeping their in-come; how-ever, incurring the expense necessary to collect the too-high taxes and then compounding that with the expense of returning part of those same taxes seems to be the height of fiscal imprudence. Maybe, if we wish, truly, to stimulate the economy, we ought to let it follow a natural course, which, sad to say, involves low spots, rather than trying to rescue companies that, hitherto having been dubbed “too big to fail”, now, fail; we ought to re-think the role of the Federal Reserve; we ought to stop wasting so much damn money policing the world and violating the sovereignty of other nations. And then, you know, stop taxing the hell out of American workers and structuring the economy to favor the corporation with no meaning-ful relationship to the towns where it does busy, or to the land it rapes through agri-business practices. I could just be crazy, though.

On a side-note, I wonder, what is wrong with an economic structure that allows for the existence of companies that are “too big to fail” that fail, any-way?