Profits, Subsidies and DemagogueryAre you invested in a 401(k) program or an IRA? Or have you invested in some other investment instrument that allows tax free saving? If so, you’re just like big oil. In fact, you are probably invested in big oil stocks, more than 40 million Americans own oil company stocks. So you are big oil. You must be evil, or so those in the media and the White House imply.
There are two things wrong with the current attacks on big oil.
1. Profits. There is nothing wrong with profits. Profits are essential to
keeping the engine for free markets running and providing Americans
with the highest standard of living in the world. Bigger profits not only
mean a better return for investors like you and me, but also more money
for the research and development needed to satisfy our energy needs.
Profits are good. Excess taxes are bad.
2. Subsidies. Big oil is not subsidized in any way. There are no payments
by the government to big oil. What the left refers to as subsidies are
simply tax breaks. If a tax break is a subsidy then all money and all
wealth belongs to the federal government. Calling a tax break a subsidy
is not merely semantics, it is a big, dangerous lie.
Assuming some part of your wealth includes oil company stock, let me ask you a couple of questions. Why did you invest in oil stock, or any other stock for that matter? Were you hoping the company would not only continue in business, but in fact make big profits so that your stock would appreciate and maybe you would receive fatter dividends? So, you’re in favor of profits? The bigger the better you say.
Isn’t that the primary reason every company goes into business—to make a profit and stay in business? The oil companies, like all other businesses, have found a way to make money while serving the public—that would be you and me. About seven out of ten start-up companies go under within a couple of years. Most of the folks that started those companies lose everything. Going into business is a very high risk business. You would have better odds in Las Vegas.
Nevertheless, risk takers like John D. Rockefeller put everything on the line to start producing and refining oil. They took big chances and received big profits in return. The Mellon family risked their money to open up the oil fields in Texas. Out of this risk-taking venture grew the Texas Oil Company (now called Texaco) and Gulf Oil, among others. It was Lucas Gusher at the Spindle Top oil field near Beaumont, Texas that broke the near monopoly on oil production and distribution by John D. Rockefeller, not the federal government.
But all this history is really unimportant. What is important is that attacks on profits are attacks on your freedom and mine. Profits made through the free market system are critical to keeping America a world leader. Profits made through free enterprise are absolutely essential to your personal freedom and mine.
Demagogic attacks on big oil are thinly disguised attacks on the bedrock of the most successful and free economic system in the world. And make no mistake about it, the choice you and I have is between us deciding what, when and where we will purchase goods and services or a few elite bureaucrats deciding what, when and where we will purchase goods and services. Socialism is incompatible with individual freedom. How can anyone seriously argue that a small coterie of individuals deciding for a vast number of citizens what they shall eat, where they shall live, what kind of car they will drive, where they are allowed to travel, how they can worship, or what they can say is freedom?
The current assault by the Obama Administration on so-called “big oil” is hypocrisy at its worst. The idea that a few speculators are causing the price of oil to go up is ludicrous. It’s simply a diversionary tactic. The Administration itself and the left in general is the sole and only reason that gasoline prices are above or nearly at $4.00 a gallon at the pump. Here are the two reasons…
1. Gasoline Taxes. Gasoline taxes are nearly $.50 per gallon. And frankly,
most of those taxes are frittered away. Until the 1970s all state and
federal gasoline taxes were by law dedicated solely to highway
maintenance and construction. If that were the case today the United
States would have the best highways and the safest bridges in the world.
We would also have less congestion and less air pollution. However,
when greedy politicians (both Republicans and Democrats) raided the
highway trust funds at the state and national level the best user fee in
history was destroyed and along with it, our great highway system. In
addition, politicians then began to raise gasoline taxes as a means to fund
every wild eyed spending program to come down the pike. So count at
least $.40 of every gallon of gas you buy as a government slush fund to
support irresponsible government spending.
2. Blocked Exploration. As bad as gasoline taxes are, their impact on the
cost of gasoline is negligible compared to the systematic blocking of
exploration for oil in the United States by liberals who disdain your
individual freedom. Nancy Pelosi may not believe in the law of supply
and demand, but her disbelief does not repeal the reality that government
constricted supply will always drive up prices, no matter the item.
Today, the United States has the largest known oil reserves in the world.
Yes, that’s right, more than Saudi Arabia or any other Middle East
nation. And, it should be pointed out that these are only the known
reserves. Many other millions of acres have been put off limits where there
are likely many millions of barrels of additional oil reserves. The US has
sufficient known oil reserves to run automobiles and heat homes for more
than 50 years! But enviro-nincompoops and their ignorant allies in
Congress and in the White House have blocked drilling for many years.
Liberal politicians are solely responsible for the high prices at the pump
today. If the free market were allowed to function, the price for a gallon
of gas would probably be under $2.00.
So the next time you hear or read about exorbitant profits, don’t believe it. The high price of gasoline is completely unnecessary and the CAFE (Corporate Automobile Fuel Economy) standards for gasoline mileage are totally unjustified.
Liberals just don’t like freedom. They really don’t like the fact that the United States of America has a reputation for being the world’s most prosperous and at the same time most generous nation. They don’t see it that way and they think the time has come for America to have its comeuppance. In their twisted and distorted view of history, Americans have gotten rich off the labors of others. Or their other answer is that America has just been lucky. They believe life is a zero sum game, that if someone benefits, he does it at the cost of another. Such a sad, contorted view of reality they have.
It’s time to vote them out of office—all of them—no matter whether they call themselves Republicans or Democrats, if they refuse to return this nation to the limited government principles established by our founders. Our nation has been brought to the brink of insolvency by an inexperienced and profligate young President who is out of touch with the foundational principles of freedom. We have one more chance to save the nation that has been the beacon of freedom to the world for more than 200 years.
It’s 1776 again. Those who came before us did not fail us. We must not fail those who come after us.