So if 1.3 million dollars in contributions from big oil means that John McCain is “in the pocket of big oil”, then what does Barack’s $400,000 from big oil mean? Apparently nothing if you’re the DNC or the average Democrat. Jake Tapper also mentions that employees of big oil individually have given slightly more money to Obama than to McCain. But that doesn’t matter either because big oil money is only bad if the recipient is a Republican. I challenge the Democrats to provide examples of McCain writing policy to support the interests of big oil. I don’t think they have any. McCain even voted against President Bush’s big energy bill, because he said that it provided too much in the way of corporate tax breaks for the oil/gas industry. It’s much easier to connect Bush/Cheney to big oil than it is to make the same claim about John McCain.
And if Barack Obama is so concerned about taking money from big oil, then maybe he should return all the contributions that he has received from them. He also might want to explain why he voted for Bush’s energy bill if it’s not just because of its support for alternative energy sources.
Senator McCain has responded to this criticism by Senator Obama by saying this:
I think Senator Obama might be a little bit confused. Yesterday, he accused me of having President Bush’s policies on energy. That’s odd because he voted for the President’s energy bill and I voted against it. I voted against it, had $2.8 billion in corporate welfare to Big Oil companies, and they’re already making record profits, as you know. Senator Obama voted for that bill and its Big Oil giveaways. I know he hasn’t been in the Senate that long, but even in the real world, voting for something means you support it and voting against something means you oppose it.
Exactly right. The Senate vote on the energy bill wasn’t even close. Obama could have voted against it without much political fallout, because it would have passed without his vote. Does the DNC really want to go through the list of Dems who have received fat corporate contributions from big oil (or from big ethanol)? Fair is fair. They can list all the Republicans “in the pocket” of big oil, and we can make our own list of Dems, and then let the American people decide whose hands are clean here. The answer is neither party. But this is a very shallow case to make against McCain. The only reason this would matter is if he were like Ted Stevens and he had designated earmarks or wrote legislation for his own financial benefit. He’s not and he hasn’t. So let’s move on to the next contrived grievance, ok?
If you’re someone who wants your candidate to be taken seriously on foreign policy, you probably shouldn’t say stuff like Obama advisor Richard Danzig said, “Winnie the Pooh seems to me to be a fundamental text on national security”. Yes, I’m sure that there was a deeper, broader point to it, because this guy is considered by some to possibly be the National Security Advisor in an Obama administration. Putting the national security discussion in terms of children’s stories and fictional Star Wars characters might not be the best way to demonstrate a deep level of understanding on that subject.
Meanwhile, the move to end the ban on offshore drilling is picking up steam. Both President Bush and presidential candidate John McCain have announced that they support ending that ban. This is a change of position for McCain, but he is not a stupid man, and he knows that the majority of Americans want to start drilling to reduce the price of oil. According to Rasmussen Reports, 67% of those they polled support ending the ban on offshore drilling. The poll also said that a significant percentage of those people also believed that offshore drilling was somewhat likely to reduce gas prices. The American people have now reached the point where their own financial interests are conflicting with their general desire to care about the environment and conservation of resources and so forth. They are seeing the tradeoff and deciding that cheaper gas is more important than the environment — if being environmentally friendly means $4 + gasoline, that’s where they recognize the insanity of our current policies. This is important, because all we seem to be hearing from the Democrats is that we can’t drill our way out of this mess, and some Democrats have even suggested that the government should take over all the refineries (!!!).
Offshore drilling won’t completely solve the problem, but it will provide temporary relief while we continue to work on a more comprehensive energy policy. I know that many Democrats owe their careers to the environmentalists, but surely they don’t want to be seen as opposing anything that has so much public support. As long as there are appropriate safeguards in place, why not do everything we can to mitigate the pain Americans are suffering at the pump?
As far as what we should do to get this elusive energy independence, we could start with producing more of our own oil. It makes no sense to beg the Saudis to increase production when we refuse to use the resources we already have. There should be incentives for oil companies to re-invest profits into research into alternative energy sources — not increased taxation for failing to meet some benchmark set by a government bureaucrat. Then we should look into nuclear power and coal. As far as government oversight goes, I have no problem with that, but we should draw the line way before we get to nationalizing refineries.
Guess those high windfall profits aren’t sustainable for Exxon Mobile. According to CNN, Exxon Mobile is closing 2,220 of its company-owned gas stations, saying that they can’t make enough money on those stations to keep them operational, even with $4 gas. That can’t be right. The Democrats tell us that big oil continues to soak the little guy on gas prices to line their own pockets. If there’s a unending stream of revenue to the oil companies, then why does Exxon Mobile have to close these stations?
Drill here. Drill now. Pay less. What are we waiting for? There should be reasonable environmental regulations on drilling, but it makes no sense to beg other countries like Saudi Arabia to increase production when we aren’t willing to use the resources we already have in this country.
They might want to remember what happened last time we imposed a windfall profits tax.
Interesting findings from a 2006 Congressional Research Service Report (quoted here). Full PDF here.
This is the most interesting part:
Reinstating the windfall profit tax would reduce recent oil industry windfalls due to high crude and petroleum prices but could have several adverse economic effects. If imposed as an excise tax, the WPT would increase marginal production costs and be expected to reduce domestic oil production and increase the level of oil imports, which today is at nearly 60% of demand. Crude prices would not tend to increase. Some have proposed an excise tax on both domestically produced and imported oil as a way of mitigating the negative effects on petroleum import dependence. Such a broad-based WPT would tend to reduce import dependence, but it would lead to higher crude oil prices and likely to oil industry profits, potentially undermining its original goals.
Because the pure corporate profits tax is relatively neutral in the short run few, if any, price and output effects occur because marginal production costs are unchanged in the short run a possible option would be a corporate income surtax on the upstream operations of crude oil producers. Such a tax that would recoup any recent windfalls with less adverse economic effects; imports would not increase because domestic production would remain unchanged. In the long run, such a tax is a tax on capital; it reduces the rate of return, thus reducing the supply of capital to the oil industry.
So US oil companies would have reduced profits if a windfall profits tax was ever enacted, but according to this study, production costs would go up and the level of imports would also increase. In other words, it would cost more to produce domestic oil, and we would end up importing even more oil than we do now. Great solution.
If we tax both our own oil production as well as the imports, it might level the playing field (and by that, I mean punishing everyone equally). It also could lead to higher crude oil prices and keep those oil company profits high. These aren’t the best solutions to high gas prices. Congress needs to figure out that high taxes discourage production, and if they really want to increase domestic oil production, they should allow domestic drilling and let the oil companies build more refineries.
The Democrats are just saying what they think people want to hear. That’s common enough for politicians. What annoys me more than anything is that I don’t see much fight in Republicans to challenge the Democrats on any of their stupid proposals.