Tuesday, April 01, 2008

Oh, Fer Cryin' Out Loud! Again!

For better or worse, there is a caste system in the United States. Or, better said, there are multiple caste systems in this country. The obvious one is the economic caste system, wherein everyone in the country makes more money than I do, so I can be a victim for the rest of my life and appear on Oprah and whine about how underprivileged I am and maybe she'll build me a luxury home and give me three or four luxury cars because she feels so sorry for me.

Or not.

Anyway, there is also an intelligence caste system in this nation, wherein the people with the least intelligence are placed in the positions of highest power. Think of it as a re-statement of the Dilbert Principle (probably ®) that says something like "management" is just nature's way of removing morons from the productive flow. In my example of the intelligence caste system, people with higher IQ's would tend to work hard in their occupations and make sure the economy of the country continues to grow apace. Lower on the IQ scale are those empowered to make decisions on behalf of the rest of us. Recent decisions proffered by our 2nd District Court of Appeals would tend to bear out this hypothesis by demonstrating that the average appellate court justice suffers from a nearly 30% decrease in intelligence compared with normal folks.

Thus it stands to reason that the true morons are not to be found in executive boardrooms (although they hardly shine by comparison), but rather are elected and sent to Washington, D. C. to serve as legislators.

Congress has a set of rituals that they perform depending on circumstance. No matter what the problem may be (or, more accurately, is perceived to be), they see their job in terms of forming a committee whose express purpose is to FIND SOMEONE TO BLAME. It is a behavior that I have never understood. Why, for example, should Congress get involved if baseball players are getting tanked up on steroids and billion-dollar contracts? Does anyone in this country care enough about steroids in baseball that our gut reaction would be, "Hey, major league stars are injecting themselves with substances that most of us with functioning brain stems instinctively avoid, so let's get Congress to form a committee so we can get to the bottom of this!" I sure don't. So a guy that won multiple awards in an otherwise distinguished career got poked with a needle or two (or fifty). The shame is his to bear. The worst form of punishment this person could possibly receive would be the disdain with which his former fans may now regard him. (Anyone remember Pete Rose? How's he doing these days after that gambling disgrace?) How does Congress holding endless "hearings" on this topic solve anything? Awareness? Hardly... most of us change the channel the minute we see some legislator begin droning on about how shameful a thing it is to have this hero of young people turn out to be a tarnished idol, while simultaneously figuring out how to avoid being prosecuted himself for some snarky little ethics charge stemming from some spurious campaign finance "misinterpretation."

Hence it should not come as a surprise to anyone that our heroes in Congress, in the face of tremendous economic pressure on their constituents (who must decide whether to reelect this same set of morons this year) have (for what feels like the 27th time this century) put Big Oil executives in the hot seat to complain about their "obscene" profits.

Quick, answer this question: Has this maneuver ever, even once, produced any results other than having Big Oil execs walk away chuckling to themselves while Congress sits helplessly by, powerless to do anything to reduce their profits in any way, shape, or form?

Time's up.

The answer is: of course not. This line of attack has NEVER worked. It never will. There is nothing (repeat: nothing) illegal about making a profit. In fact, the way this market works, the more profit a company makes, the better the chances its stockholders will get a return on their investments. It's not an absolute guarantee, you understand, but their chances improve with each percentage point of profit made by the company.

Congress can hem and haw and threaten to raise Big Oil taxes, but it's an empty threat. They've tried that, in fact, and Big Oil taxes are among the highest in private industry. Yet they seem to keep making money. This in spite of the fact that OPEC and other oil producers keep raising their own prices for crude. Wow. A perpetual money-making machine.

The claim here is "obscene profit." Well, if anyone can define "obscene," it's Congress. In the dictionary, the picture next the word "obscene" is the Capitol dome. Hey, William Jefferson may well be called in as an expert in obscene profits himself. Stashing an extra $90K in the freezer may well make him one of the more ethical representatives these days. Duke Cunningham would likely decline an invitation to testify. So Congress calling anyone's profits "obscene" is laughable at best. Particularly when compared with the pork projects these people continually pump into our national budgets.

In this report from FreeMarketProject.org, Amy Menefee points out that of all the entities that profit from Big Oil, the United States Government is the largest beneficiary. Written in November 2005 and using July 2005 figures, Menefee reports that there had only been three years between 1980 and 1982 where Big Oil made more money on their revenues than the Government did. In other words, whatever profits the oil industries claim, Uncle Sam takes an even bigger cut. We may live in a "free market" society, but this actually points out what happens when you overregulate that market. Or, really, just plain steal from it. Menefee also points out that as of July 2005, Exxon's actual profit (as a percentage of revenue) was just under 10%. Now, there's obscenity for you. She states, however, that in the same period, Johnson & Johnson was reporting profits of nearly 18%. Why weren't they sitting in Congress's Hot Seat?

(I notice, by the way, that Congress has so far been careful to tiptoe around the issue of obscene executive compensation. Are they actually worried about their self-image? One wonders.)

Now, I'm all for trying to reduce our dependency on fossil fuels. I think it can only be good if we manage to do so. But from my perspective as a lowly consumer, things have got to get a whole bunch cheaper before I start switching to alternatives myself. You want me to drive a hydrogen-powered car? Great. Happy to oblige. Just make that car affordable and the fuel, too. Otherwise, I'll have to stick with sniffing my carbon monoxide.

Ultimately, this whole exercise is really about Congress appearing to be doing something about this "crisis." They have to do this so that their constituents will see how tirelessly they work in an election year so they can get reelected. They really don't have a prayer of reducing Big Oil profits. Besides which, they're too busy trying to ban prayer in all public forums.

In the meantime, Congress, the next time you want to put someone in one of your Committee Hot Seats, stick with putting a few of your own on the stand. Everyone else is making you guys look stupid.

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