Democrats on the Senate Judiciary Committee grilled top oil executives over their pay and warned that Congress was intent on taking action that could include a tax on so-called “windfall” profits. (click on the read more icon to read the full NY Times story)
I try not to get too political here, but I can't stand by without commenting on this one.
Blaming oil executives for the price of oil has got to be the dumbest thing I have ever heard of.
Taking the oil company's profit with a "windfall" tax could be the second dumbest thing I have ever heard of.
Are the senators going to take those tax dollars and go find more oil?
Any guess what the average price for oil was in 1998?
$11.91
I guess the oil executives 10 years ago weren't smart enough to manipulate the price of oil to a more profitable level.
Where were the senators in 1998?
Maybe they were busy buying SUVs.
Where do they think the profits from publicly traded oil companies go? They go right back into the economy looking for, drilling for, and producing more oil.
What are the impediments to finding and producing more oil?
My answer, politicians and environmentalists.
Who pays for politicians and environmentalists?
You.
You elect and pay the politicians. You give money to the environmentalists.
They both say you can't drill for oil here or there, you can't import "dirty" oil, you can't build nuclear reactors, you can't, you can't, you can't.
Meanwhile we, (I put myself in this category) have spent the last X number of years burning fossil fuels like there was no tomorrow.
Now what?
We all need to reduce our energy usage.
We need to move electricity production from fossil fuels to nuclear.
We need to allow the "greedy oil companies" to spend their "windfall profits" looking for oil anywhere they want to.
There are environmental risks in both the nuclear and oil production solutions. We need to mitigate these to the best of our abilities while allowing production to occur.
The choice is ours, not the politicians, and not the environmentalists.
We use the energy, we have to make these decisions. We can choose to allow the energy industry to produce what we demand. Or we can choose to impede the energy production we all need.
We cannot demand lower carbon emissions, outlaw oil drilling in certain areas, and then scream at oil executives because we don't like the price of gasoline.
I do have to remind myself every now and again that all politicians have only one agenda. Get re elected.
Ultimately that is their only concern, and if they can make some political hay yelling at oil executive then that is what they will do.
What they actually believe is anyone's guess.
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3 comments:
Agreed. Also, if you reduce incentive to produce, then you reduce supply which in turn increases price. Taxing "windfall" profit could reduce or slow supply. If the aim here is to lower oil prices, it would make more sense to offer oil companies a "bonus" for a good solid profit and watch them climb over themselves looking for more oil. Of course, that isn't practical. Neither is taxing "windfall" profit. Which is just scary. To me it just makes sense to let the market dictate price. The higher the price, the greater the incentive to look for an alternative. Lowering oil prices is counter productive. So yes, this is just political posturing. Corporation = bad.
Executive = bad.
Anyone who achieves more than you = bad.
Oil = bad.
Equality = good.
Mediocrity = good.
Thats may take comrade.
http://hsgac.senate.gov/public/_files/052008Masters.pdf
Amen brother.
Eventually supply and demand will work. As price goes up production will increase and usage will decline.
Then price will go down.
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