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Follow The Money

Well, Cassy did a pretty good job covering Barack Obama's statement that he would have "preferred' had the price of gas gone up gradually, and not shot up like it did. (Yes, there are those that say he meant that it would have been better to go slow, but look at the context: he is asked "so, could the high prices help us?" His response is not to deny that, but to qualify it.)

It's instructive to remember that Obama is the nominee of the party that for years touted increasing the taxes on gasoline to "encourage" people to conserve more, that slapped "gas-guzzler" taxes on vehicles that didn't measure up to their standards. And they are the ones pushing for "windfall profits" taxes on oil companies based on the current record prices of gasoline.

This might seem contradictory to some -- the same folks that said we're not paying enough for gas are also the ones who are outraged over the high price for gas. But there is a very simple explanation for this:

The money is going to the wrong people.

In both cases, what the Democrats are pushing is for more money to go to the government. If the price of gas goes up because of increases in the price of oil, that's bad. But if it goes up because of increased taxes, that's good. And if the oil companies start making more money, that's bad and must be corrected by raising their taxes.

As I said, the money must go to the government. That will increase the power of the government, and that is the most important thing to the Democrats.

Don't believe me? Try this experiment.

The Democrats are saying that the American people are angry over the price of gas, and I won't argue with them. They say that they want to respond to this by imposing a "windfall profits tax" on the oil companies, and this is seductive; they're making more and more money while we're paying more and more, so why not make the bastards pay?

Here's the question, though: will raising this tax actually bring the price of gas down?

Well, it certainly didn't the last time we tried it, in the first Obama administration Carter administration. Indeed, it caused far more problems than it solved.

But that's OK. It's an emotional response, and that makes it valid enough. That it will not only not fix the underlying problem, but most likely make it worse, doesn't matter. It's the FEELINGS that count.

The problem with gas prices is a fundamental one -- supply and demand. Demand (for oil, not just gas) is increasing worldwide. The obvious solution to that is to increase the supply.

So, how's that going? Well, Guest Wizbanger Emeritus Rob Port has been keeping track of things, so I'm going to "outsource" some of my homework out to North Dakota.

Ease restrictions on new refineries in the US? Nope.

Increase offshore drilling? Uh-uh.

Develop oil shale in Colorado? Fuggedaboutit.

And if that isn't enough, Representative Roy Blunt ran the numbers on both parties' plans to bring down the price of oil. It ain't pretty.

And again, the Democrats' plan boils down to "put more money and power into the hands of the government."

Thanks, but I'll pass.

If it comes down to it, I'd rather pay my money to the big oil companies than the government. I own a little bit of oil stock, through my 401K plan, and I have more faith that I'll get some of my money back that way than from the government.

Especially Social Security.


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Comments (9)

Obama is a political inside... (Below threshold)
In Chicago:

Obama is a political insider. You cannot become the democratic nominee for president without good inside friends. This is more of the same old hogwash. It is time for a change. Vote against the system. Vote for change. Don't vote for the demopublicans or the Republicrats. Vote third party. Vote libertarian, green or independent party. Go out and help them make a difference. Vote your conscience!

Excellent post Jay.<... (Below threshold)


Excellent post Jay.

I would only add that there is another adverse effect of higher oil prices: a substantial, and rapid, increase in the trade deficit. Shipping the dollar off to China so that Wal-Mart's shelves remain stocked is bad but shipping the same dollar to oil exporters is somehow....not worthy of the same level of demagoguery in the congressional circus hearings?

Another point to the Pelosi apologists that buy the warped economic analysis that ANWAR will only reduce the price of gas by _______% (fill in the blank with some small number) and that it would take ten years to realize the benefit: ANY major capital project takes years to develop and implement, from widening I-75 to building a new coal fired power plant.

Additionally, IF ANWAR and off shore drilling plans were approved it would have an immediate impact on pricing metrics of foreign currency markets. The April surge in the Trade Deficit was approximately half comprised by energy related items. Increasing domestic production could decrease the trade deficit by an amount between 5-10% on an annual basis. Drilling opponents should forget for a minute the price of gas and just focus on the value of the dollar.


"Here's the question, th... (Below threshold)
JLawsonn:

"Here's the question, though: will raising this tax actually bring the price of gas down?"

No, but it will make it look like the Democrats are actually DOING something about the problem. And later on, when the price is even higher, they can say "Well, we raised taxes - what else are we supposed to do?"

The Democrats aren't interested in actually solving problems. A solved problem can't be mined for votes. A solved problem is essentially worthless - because the average voter has about a 3-week memory. So you need to have a problem, and promote a solution during the election cycle - and afterwards you can simply forget about doing anything about the problem which was SO important before!

(Hey, Pelosi - how's that wonderful energy plan you were touting in '06 coming along? Oh, wait - that's right, it's after the election so it doesn't matter!)

The GOP had complete contro... (Below threshold)
Allen:

The GOP had complete control of the White House and all of Congress from 2000 to 2006. Why didn't they get off their dead asses and start adding refineries and develop/drill more oil wells?

The problem isn't just one party, it's the problem of both parties! Maybe we should start mailing our elected critters used tea bags.

Allen -There was s... (Below threshold)
JLawsonn:

Allen -

There was something else going on that was of concern - or did you sleep through the last 8 years? Oil wasn't a problem then. Politicians don't solve problems until they have no other recourse. If they can shove the responsibility for actually dealing with the problem down the line, then they'll do so.

Abd since a supermajority was needed to get anything passed energy-wise, all the Democrats had to do was vote "No" in a block - and that was that. After 2001, there was no way in hell they'd do anything that might be seen as helping Bush.

In other words - if you want to look for someone to blame high oil prices on, check out all the Democrats have done in the last 8 years to make sure we have a plentiful supply of domestic oil.

By the way - isn't it interesting how, in 1998, they said it was necessary to revamp Social Secuirty - yet when Bush actually TRIED to do it, they screamed it wasn't broke and didn't need fixing?

AllenI agree that Re... (Below threshold)

Allen
I agree that Republicans were part of the problem then, however there were some mitigating factors:

http://www.inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp

That said, Republicans were side by side with the Democrats in creating the corn based ethanol fiasco (although only Republicans tried to get the EPA to stop the Energy Policy Act of 2005 ethanol production requirements).

What was a problem in 2000-2006 is now a crisis and Dems still will not help solve the supply side of the equation.

"The GOP had complete co... (Below threshold)
P. Bunyan:

"The GOP had complete control of the White House and all of Congress from 2000 to 2006."

Allen must be a Democrat. He has no clue how our government works.

I wish they'd make people pass a very basic civics, American history, and current events test before they were allowed to vote...

"But that's OK. It's an emo... (Below threshold)
Kenny:

"But that's OK. It's an emotional response, and that makes it valid enough. That it will not only not fix the underlying problem, but most likely make it worse, doesn't matter. It's the FEELINGS that count."

Excellent point, Jay. Its too bad that rational thought has deserted the liberals and their supporters.

What a day!! My morning fi... (Below threshold)
moseby:

What a day!! My morning fill-up cost me 80 bucks. Then, one of my co-workers caught me off gaurd and traded me Tim Russert for Teddy K in the dead pool.....




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