The New Math

I am continually amused by ignorant politicians. Our genius American presidential candidate, Barack Obama, today proposed the tired, liberal suggestion to tax "windfall profits" of oil companies to give Americans (the one's he considers worthy of getting something) 1000 dollars to stimulate the economy and help offset their rising energy costs.

This is supposed to be a regulated, but relatively free market. I thought that the whole reason to be in business was to increase profits. Further, companies that deal in commodity products such as oil often go through cycles of high profitability and moderate loss. The good times keep things floating during the bad times.

Why not have a windfall tax on other areas that are profitable? What else is benefiting from windfall profits? Corn farmers. Let's steal their profits. How about hybrid battery manufacturers? Let's steal their profits too. How about Honda? They were smart enough to see things coming and converted to smaller car production and are making a lot of money. They should be punished.

This hurts ordinary Americans as well. I would say that 50% or more of Americans have money in pension plans and 401 k's that include oil companies. Currently, these 401 k funds are getting hammered by the drop in stock prices and would be further hurt if the oil companies, that we all own part of and are doing well, were gouged.

The idea of a company is to generate wealth for share holders. If I happen to own something that goes up in value, why punish me? The land I own has gone up. The house. What about the gold jewelry we buy. It is all worth more by no direct action that we have done other than to possess it.

Ok, so the math transfers money to some tax payers to help with energy costs. Now, the oil companies have less money, which, by all rights, they would plow back into building the company and creating more jobs (this really is done ... no company will continue to exist if it does not grow) to invest in itself, alternate energy, the local community, etc.

I get tired of this type of thinking. The oil companies are currently making lots of money (not huge percentage profits, just lots of money ... but they are worth much more). When oil was 40$ a barrel I don't remember anyone going to bat to give them more money to make sure their profits were ok. Leave the companies alone. With the higher oil price and the profits, they can finally think about getting at shale oil.

Politicians should focus, instead, on removing barriers to exploration and acquisition of oil to stabilize pricing while we move to nuclear and hydrogen feedstocks.

Oh, but the environmental groups will not let us drill off the coast or in Alaska. It is ok, though, to pay high fuel prices based on removing oil from someone else's back yard. It is only our environment that we cannot tap in to.

This kind of thinking by our politicians just tires me out.