BIG OIL IS NOT OUR ENERGY PROBLEM — BIG GOVERNMENT AND BIG STUPIDITY ARE!!
BIG OIL IS NOT OUR ENERGY PROBLEM — BIG GOVERNMENT AND BIG STUPIDITY ARE!!
In dealing with almost any economic issue, I always like to preface the discussion with some reference to the left-wing’s bete noire of the day — BIG something or other. Currently, it is BIG OIL. The bad guy of choice when Hillary’s monumentally flawed health care proposal was on the table was BIG INSURANCE, and/or BIG DRUG COMPANIES. In other words, in order to conjure up the appropriate degree of something really sinister, the left-wing’s devil of the day had to be something big. In this context, or, for that matter, in any context, it is amusing that the left never really addresses the BIG entity that is our real problem - indeed, in most instances, our only problem, to wit BIG GOVERNMENT. There is no entity of any size that is more inefficient, more costly, more destructive, and more incompetent than government, and, down the road, we shall take a long, hard look at this monumentally feckless monolith — assuming, of course, that when the left gets through with its suicidal ministrations, we still have a government to critique.
Every time we have an energy problem — code for gas increases at the pump — we look around for someone to blame. And, lo and behold, as previously noted, it is always the same someone — BIG OIL!! (those evil guys who want to make a profit; even an “obscene” profit, no less). And, as also previously noted, every time we do that we find that Big Oil has not only done nothing improper (let alone illegal), they have operated in a manner entirely consistent with the laws of the market place. But we need a scapegoat, and, consistent with the left’s antipathy to the capitalistic way of doing business, we pick the private sector scapegoat closest at hand and most emblematic of the success of the free enterprise system.
Aside from the fact that they have done absolutely nothing wrong — and are in no way responsible for increases at the pump - why are they singled out for having their profits labeled obscene and/or excessive? What constitutes an “obscene” profit, and, absent wrong-doing, what’s wrong with it? Again, why is BIG OIL singled out for this attack? Why are the profits of other industries — particularly industries whose profit margin exceeds that of the oil industry — not questioned? Or, more appropriately, absent any wrong doing, what right does the government — or anyone else - have in a free society to question the propriety of a “profit,” no matter how large?
As Calvin Coolidge observed, the business of America is business, and a part of that, a not insubstantial part, is BIG business. And the profits of business in turn, both big and small, are what keep BIG GOVERNMENT in business (as well as academia and every other parasitic operation that lives off the fruits of other people’s labor). Linking the criticism of government to the current oil controversy, let’s start by taking a look at how much of oil’s profits go to the oil companies and how much go to the government.
To the suggestion that Oil Companies are “gouging” the public, one needs to take a careful look at who’s really doing the gouging. In his column entitled Tackling Five Modern Myths Created by Liberals Part 2, at Townhall.com on June 20th of this year, John Hawkins makes the following observation: “Unsurprisingly, given the outrageously high cost of gas and the Left’s penchant for pointing the fickle finger of blame at big corporations, we’ve heard a lot about how big oil is gouging consumers. However, when you take a look at the actual numbers in California, for example, you find ‘Distribution Costs, Marketing Costs and Profits’ for the oil companies make up 8 cents per gallon of gas. That doesn’t sound like gouging, does it? But if you believe it does, what would you say about the 70 cents per gallon in taxes that’s paid by California consumers?”
Moreover, as Karl Rove points out in an excellent op ed piece in the Wall St. Jl.’s on line publication on June 19th, not only is the profit margin of oil companies samaller than other industries, their total number of dollars taken in is considerably smaller than many of them. Maybe we should slap a windfall profits tax on those industries? No, not only do we not need such government interference, it would be very dangerous to allow it to happen.
What is really obscene is that we have allowed our energy policy to be held hostage by a bunch of left-wing eco nuts who are not only promoting our economic insolvency, but, more important, aiding our enemies and thereby funding our eventual destruction with petro dollars. How can you possibly justify this act of suicidal stupidity?
The answer is not to hamstring American oil companies; the answer is to reduce, and eventually eliminate, our dependency on foreign oil. Thus, here like almost every other place, the left has it exactly backwards. We should not be seeking to punish or restrict in any way the operation of American oil companies (who hold a very insubstantial percentage of global oil ownership); we should be doing everything we can to assist them in developing our own oil resources (as well as exploring and developing any and all alternate sources of energy).
Moreover, if they’re doing that well, unlike government, they just might be doing something right. I am reminded of the apocryphal story about Abe Lincoln’s reaction on being informed that Ulysses Grant, his top general, liked to drink — he allegedly greeted the news with this rejoinder —“find out what he drinks and send a case of it to my other generals.” I think that that should be our reaction to BIG OIL’s success; find out what they are doing right so that other companies can emulate their behavior. Also, in a free market system, the chances are that if they’re doing well, more often than not, they’re doing good.
Finally, to that shopworn argument from the left that drilling now will not solve our short term problem, I repeat the 2 points I made last week: (1) it will, because as soon as our current oil importers find out that we are beginning to exploit our own resources, in an effort to stop us from beginning to meet our energy needs at the price of possibly cutting them out of the action, I have no doubt that they will drop their price, and (2) so what if it does not solve our short term problem, it will solve our long term problem (which might have been partially solved already if Clinton had not vetoed the first effort to free up oil in the artic preserve), and that’s good enough for me. Perhaps the quickest and most effective response is that while drilling now may not solve our short term problem, not drilling at all will make certain that we never solve our problem. And the one thing you definitely do not want in connection with a resolution of our energy problem is government intervention or, for that matter, any form of government involvement.