Profits Are Not Obscene and Government Distorts the Market

In the wake of congressional, witch-hunt hearings with oil executives regarding the price of gas, John McCain has chipped in to display his liberal side once again:

“I don’t like obscene profits being made anywhere–and I’d be glad to look not just at the windfall profits tax–that’s not what bothers me–but we should look at any incentives that we are giving to people, that or industries or corporations that are distorting the market.” From Michelle

For 1: Profits are not obscene. As W. Cleon Skousen puts it profits are “the means by which production of goods and services is made worthwhile.”

For 2: Government intervention is what distorts the market, not law-abiding companies. In a free market, oil companies would be free to drill for and refine the oil we have at our finger tips. Government regulations prevent this free market activity and distort the market.

John McCain wants to punish oil companies for running efficient operations that turn a profit. And what is this government intervention going to do? Only make the problem of high gas prices even worse. And by putting additional tax burdens on oil companies, John McCain will be taking away dividends (profits) from every day Americans who’s 401Ks are invested in these companies (43 percent of oil and natural gas company shares are owned by mutual funds).

Of course, McCain’s policy is sounding like his good buddies int he Democrat party, like Barak Obama, who’s solution to the energy problems is to make do with less: “We can’t drive our SUVs and, you know, eat as much as we want and keep our homes on, you know, 72 degrees at all times, whether we’re living in the desert or we’re living in the tundra, and then just expect every other country is going to say OK.”

Remind me again how a liberal like McCain got the GOP nomination? Sure McCain is better than the Democrat Party nominee, but not by much. Isn’t there a better choice? Where is the conservative running for President, who believes in small government and free market solutions?

No Ethical Compass About the Price of Gas…How About Taxes?

For the second time in this year alone, executives from the major oil companies have been summoned to testify before Congress, regarding the reasons for high gas prices. This entire process is a circus and designed solely to allow politicians, in an election year, to tell their constituents that they are fighting to relieve their “suffering” at the pump.

The primary cause for high gas prices lies in one of the basic principles of economics, low supplies and growing demand, something which many politicians, particularly Democrat politicians, fail to grasp. The Democrats’ own policies preventing the drilling of oil in the United States (in Alaska, off the coast of California, and in the Gulf of Mexico) and preventing the construction of new refineries are contributing to the shortages in supply. The continued economic growth in India and China are the primary factors increasing the demand for oil.

This quote demonstrates what a circus this inquisition of the oil executives is. Diane Feinstein, Democratic Senator from California, said this, “you rack up record profits, record profits, quarter after quarter after quarter, and apparently have no ethical compass about the price of gasoline.”

How about your ethical compass about the burden of taxes, Senator Feinstein? You’ve never seen a tax increase you didn’t like (see her record below). The average American pays a third of their income in taxes. At least when we buy gas we have something to show for it. At least when we buy gas, the oil companies have done work to earn it. Congress demands we pay taxes, gives us relatively little to show for it, and will throw us in jail if we do not pay it.

I don’t worry so much about abuses from businesses, the free market tends to work those things out. I do, like the founding fathers, worry about abuses from the government, like over-taxation, bloated government, and officials over-reaching their authority, which is precisely what is happening with this witch hunt.

Diane Feinstein’s Record on Taxation and Oil Production from
Voted NO on paying down federal debt by rating programs’ effectiveness. (Mar 2007)
Voted NO on $40B in reduced federal overall spending. (Dec 2005)
Voted NO on prioritizing national debt reduction below tax cuts. (Apr 2000)
Voted NO on Balanced-budget constitutional amendment. (Mar 1997)
Voted YES on removing oil & gas exploration subsidies. (Jun 2007)
Voted YES on disallowing an oil leasing program in Alaska’s ANWR. (Nov 2005)
Voted YES on banning drilling in the Arctic National Wildlife Refuge. (Mar 2005)
Voted YES on removing consideration of drilling ANWR from budget bill. (Mar 2003)
Voted NO on drilling ANWR on national security grounds. (Apr 2002)
Voted NO on preserving budget for ANWR oil drilling. (Apr 2000)
Voted NO on do not require ethanol in gasoline. (Aug 1994)
Voted NO on repealing the Alternative Minimum Tax. (Mar 2007)
Voted NO on raising estate tax exemption to $5 million. (Mar 2007)
Voted NO on supporting permanence of estate tax cuts. (Aug 2006)
Voted NO on permanently repealing the `death tax`. (Jun 2006)
Voted NO on $350 billion in tax breaks over 11 years. (May 2003)
Voted NO on across-the-board spending cut. (Oct 1999)
Voted NO on requiring super-majority for raising taxes. (Apr 1998)
Rated 15% by NTU, indicating a “Big Spender” on tax votes. (Dec 2003)
Rated 80% by the CTJ, indicating support of progressive taxation. (Dec 2006)