Democrats in Congress engaged in an unwitting April Fools prank this April 1st. Some members of Congress summoned the leaders of the five largest oil companies in the U.S. for a nice modern-day inquisition:
Top executives of the five biggest U.S. oil companies were pressed Tuesday to explain the soaring fuel prices amid huge industry profits and why they weren’t investing more to develop renewable energy source such as wind and solar.
The executives, peppered with questions from skeptical lawmakers, said they understood that high energy costs are hurting consumers, but deflected blame, arguing that their profits – $123 billion last year – were in line with other industries.
“On April Fool’s Day, the biggest joke of all is being played on American families by Big Oil,” Rep. Edward Markey, D-Mass., said as his committee began hearing from the oil company executives.
With motorists paying a national average of $3.29 a gallon at the pump and global oil prices remaining above $100 a barrel, the executives were hard pressed by lawmakers to defend their profits.
The first thing I noticed in the article was that every Representative quoted in the article was a Democrat. But that’s not all that surprising, since Democrats in Congress have little to no clue about how the economy works. Let’s tackle the ideas in this article one by one:
“[O]il companies were pressed Tuesday to explain the soaring fuel prices amid huge industry profits”–And why should the oil companies have to explain fuel prices and their industry’s profits to Congress? Oh, right. Members of Congress are being meddlesome busybodies for a grandstanding photo op. “Americans can tell we care about them because we were so mean to the oil businesses” may be applauded by liberals, who believe it is the government’s job to manage a company’s prices and profits. But government control of business is the definition of statism, as illustrated by the statist philosophies of fascism and communism.
“[W]hy they weren’t investing more to develop renewable energy source such as wind and solar”–It is the responsibility of the business itself to determine how it will best invest for its future. Unless you are a fan of big government or a liberal (but I repeat myself) who believes that government should dictate how a business spends its own money, you already understand that. I would have loved to see one of the oil executives ask the Congressmen about why they weren’t spending more of their own salaries on charities and other projects, but that would be just as wrong. After all, your money, whether you are a sanctimonious Democrat or a Big Oil chief, is your money. I have no moral justification allowing me to tell you how to spend your money, and you have no moral justification to tell me how to spend mine.
“[T]heir profits – $123 billion last year – were in line with other industries.”–Oil companies make about 5% profit in bad years, and about 10% profit in the good ones. This puts them in the middle of business profits. Just to compare, the defense industry earned a 6.8% profit in 2007, the oil industry earned 8.4%, and the pharmaceutical industry earned 20.9% profit.
But this talk of rising gas prices and oil company profits ignores the fact that the oil companies don’t set the price of gas. They don’t even set the price of oil. Even OPEC cannot set the price of oil, although they do their best to affect the price. The price of oil is set by the commodities market, but not even arrogant Democrat Congressmen are dumb enough to try to call commodities traders on the carpet.
Here’s the kicker: if the oil companies need to be called on the carpet for their huge profits, then what does about government’s obscene profits from gas taxes? Red Planet has a great cartoon showing the comparison between Exxon’s profit per gallon and the government’s tax on that same gallon. Who is making obscene profits now?
If Exxon and the other oil companies are making obscene profits at 10 cents on the gallon, doesn’t that make the government’s profit from that same gallon of gas four times as obscene? Not if you are a liberal Democrat who doesn’t comprehend the free market. To badly paraphrase Benjamin Franklin from 1776, a liberal Democrat has no problem with profit in the first person, such as “my profit.” It’s only in the third person — “their profit” — that they object.
Reread the article, and you will see this attitude evident in the attitudes of Democrat Representatives as they grill the oil executives. Heaven save us from these clueless, grandstanding liberals!