Barack Obama has decided that "It isn't right that oil companies are
making record profits at a time when ordinary Americans are going into
debt. ... That's why we'll put a windfall profits tax on oil
companies...".
Why stop at a windfall profits tax? Why not just "take over" the oil
companies and have the government run them? Obama needs to answer that
question.
Regardless of his feelings about Waters' idiotic suggestion, how did
Obama come up with over $80 a barrel needs a windfall tax? Why not $70
or $100? John Stossel describes it well in today's column
http://townhall.com/columnists/JohnStossel/2008/05/28/windfall-profit_nonsense.
Oil companies make about 8.3 cents on the dollar. Soft drink and
chemical companies make upwards of 15 cents on the dollar. Profits
differ from PROFIT MARGINS.
One can only hope that Obama is just pandering and doesn't really have
less knowledge of economics than John McCain (although I think he
does). How does taxing "excess" profits lower the price at the pump?
Economics 101 on supply and demand would tell Obama that supply is
constrained while demand in skyrocketing. OPEC countries are
restricting the supply to keep prices high. There is no empirical
evidence linking American oil companies in price fixing. Nation-states
control a majority of the oil in the world and the oil companies have
to pay them royalties to drill for it in those countries, and in the
case of Venezuela they were kicked out.
The Next Herbert Hoover?
Hoover is normally given the label as the laissez faire president who
let the Great Depression happen without government interference. This
is not the case. Herbert Hoover had denounced laissez faire and was a
"progressive".
Via Wikipedia- These are the actions Hoover took
# Raised tariffs, in accordance with his election-year promise, by signing the Smoot-Hawley Tariff Act.
# Increased subsidies to the nation's farmers with the Agricultural Marketing Act.
# Signed the Emergency Relief and Construction Act, the nation's first Federal unemployment assistance.
# Increased public works spending. Some of Hoover's efforts to stimulate the economy through public works are as follows
"In order to pay for these and other government programs, Hoover agreed
to one of the largest tax increases in American history."
Sound Familiar? Sounds exactly like something an Obama presidency would
consider. Statist policies of tax hikes, protectionism,
market-distorting subsides, and increased government spending. Obama is
the most anti-business and anti-free trade in recent history. This has
led Kyle-Ann Shiver to claim Obama as "To these rabid Marxist radicals,
Obama is the One, because he’s probably their last chance to see
socialism triumph on our own soil. They have grasped the reality of
their own mortality."
http://article.nationalreview.com/?q=NTNkNTU5MjE2MjUwNmQ2MWQ3YWRlYjhmNzQ4OTQyOGU=
This is based on the many endorsements and swooning from the old, radical left from the 60s and 70s.
Those who support Obama should explain how raising taxes and cutting
off free trade benefits the economy (especially during a slowdown,
though not quite recession). Based on policy prescriptions Obama is the
reincarnation of Herbert Hoover and Jimmy Carter.