Tuesday, March 20, 2012

The Song Remains The Same

Shepherd:      What I did tonight was not about political gain.
Kodak:      Yes, sir.  But it can be, sir.  What you did tonight was very “presidential.”
            —Michael Douglas as President Andrew Shepherd, and David Paymer as Leon Kodak in The American President

Does everything down at Obama Manor have to be turned into a political gambit?

Last weekend, President Obama—trying to turn adverse news on rising gasoline prices to his political advantage—renewed his assault on Big Oil, once again calling for an end to what he characterizes as a century of taxpayer subsidies.  I’ve dealt with this tired lie that Evil Big Oil is unfairly raping the rest of society here, and here, and to a lesser extent here, but it appears I’ll have to address this yet again.

There are no “taxpayer subsidies” for Big Oil.  A “subsidy” is when a government gives money to a private enterprise; see Solyndra, Ener1, GM, Chrysler, and anyone else who received “green energy” no-recourse federal loans, “stimulus” money, or TARP bailouts.  If anyone should know what a subsidy is, you’d think it’d be Obama.  Oil companies don’t receive government grants.  None of the major oil companies has received federal loan money, “stimulus” funds, or any kind of bailout.  What oil companies do receive—as I’ve explained many times—are certain tax deductions and credits that are common to any industrial business.  That’s not giving taxpayer money to the oil companies; that’s taking less of the oil companies’ money away from them.  The idea that federal taxpayers are subsidizing oil companies is an outright lie.

The fact of the matter is, if you’re concerned about how much you pay for gasoline, taxes are not the solution, taxes (and other government taking) are a huge part of the problem.  Depending on where you live, at an average price of $3.83 a gallon, between $0.54 and $0.73 is made up of taxes.  That’s direct taxes on the gasoline itself, and doesn’t include the overhead cost of the income taxes already levied on the oil company, or secondary capital gains taxes levied on the company’s shareholders on top of that.  It also doesn’t include government royalties and excise taxes levied on the oil used to make the gasoline, which can be as much as 25%; at $107 for a barrel of West Texas Intermediate crude (which yields 19.5 gallons of gasoline from a 42 gallon barrel), that’s another $0.67 per gallon going to the government.  All told, somewhere around half of that $3.83 per gallon actually already goes to the government.

Obama says fossil fuels are the “energy of the past,” and that we need to be looking to the energy of the future.  Does he really think it hasn’t dawned on Big Oil to investigate future technologies?  Exxon has committed to investing $600 million in algae research.  Chevron is actively involved in researching geothermal, solar, and biofuels technologies.  Although it has scaled back recently—because the technology isn’t getting anywhere, a fact to which the current administration is apparently oblivious—Royal Dutch Shell invested over $1 billion on wind, solar, and hydrogen projects between 1999 and 2006.  BP's alternative energy subsidiary is participating in a $1 billion wind project.  ConocoPhillips recently committed to participate in investing in $300 million worth of “clean energy” startups.  The major energy companies are keenly aware that if the future indeed belongs to “green energy,” the first one to get there stands to make massive, massive profits.  But it is neither necessary nor desirable to mortgage the present in order to do it.

Obama’s call to “end subsidies” is counterproductive to all of his stated goals.  Raising taxes on oil companies isn’t going to reduce the price of gasoline.  With the government’s take already consuming about half the price, raising taxes is 100% certain to increase it.  Oil companies aren’t going to pay that tax.  You are.  Obama complains about Big Oil’s profits and pontificates about stopping the subsidies as though he’s championing the little guy, but it’s more like Curt Bois in Casablanca warning naive refugees to beware of villains while he’s simultaneously lifting their wallets.

Watch yourself.  Be on guard.  This place is full of vultures, vultures everywhere.
And all of this is reducing the amount of capital available to those with the greatest profit incentive to push for the development of new energy technologies, thus compromising Obama’s stated goal of leading us—by the nose, if need be—into the “green energy” future.

He has to know all this.  Obama has to know that is proposed tax increase isn’t going to pass—he couldn’t even get it passed when the Democrats held supermajorities in both houses—and even if it did it isn’t going to do anything to help regular Americans at the pump.  So why carry on with it?  It’s about is perpetuating the false zero-sum campaign narrative that you’re either for middle America, or you’re for Evil Big Oil.  Sounds great, even though on any kind of grown-up examination it doesn’t hold any water. 

This man has no substance or depth whatsoever.  Everything is about the political dog-and-pony, setting up the sound bite or the bumper sticker catch phrase.  Consider:

  •     Crying “tax the oil companies!” when gas prices rise;
  •     Telephoning a law student who wants someone else to pay for her $1000 a year in birth control when Rush called her a “slut,” but remaining totally silent when Letterman called Governor Palin a “slutty flight attendant”;
  •     Routinely using artificial scheduling issues to pre-empt or upstage the GOP, whether it’s unilaterally summoning a joint session of Congress in conflict with a GOP Presidential debate, or scheduling a pointless press conference on top of a GOP primary;
  •     Apologizing to anyone and everyone for everything being America’s fault;
  •    Deliberately dropping “Creator” when quoting the Declaration, and mis-identifying the national motto as “E Pluribus Unum”—it isn’t, it’s “In  God We Trust” (see 36 U.S.C. § 302);
  •     Essentially voting “present” on Israel;
  •     Rushing to condemn the Cambridge police for “acting stupidly,” in arresting Harvard Professor Henry Louis Gates, when 911 tapes later revealed Gates ignored multiple warnings to calm down or he would be arrested for disorderly conduct.

And on and on it goes with the Panderer-in-Chief.  It’s always about creating the best TV optics and throwing bones to his Leftist base.  Claim credit, deflect blame, posture everything as “us vs. them,” but never deal with substantive issues on their relative merits like an adult.

I only hope this broken record ends come November.

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