Frist ?

The windfall profits tax is a dumb idea, and I wish Obama didn't support it, but I guess politics is politics. It's not the biggest deal in the world.

It is going to be the gift that keeps on giving to the Republicans. Mind-bogglingly stupid. What is a windfall, anyway?

About the tax "rebate" idea: Since in a real sense, a tax rebate is actually a loan, please, please, if we are going to enact such silly policies, we should allow those of use who don't want or need the money to opt out.

Weak add. Obama needs to be putting some meat on the need for change. The future he can help us get to. He needs to be hitting hard on energy independence AND rolling this up in the meme 'when did America stop being a nation that gets things done?' -- American know how is still there. This administration has failed e.g. Katrina because they believe government is to enrich them and their cronies. Obama needs to be pounding on a need for dramatic energy investments/changes to get us out from under the thumb of big oil. Yeah McCain is a pawn for these interests -- but where will Obama take us.

Dumb ideas that can be sold win elections. The average voter will see this, think: more money for me, and less for the greedy oil companies WHO FUND MCCAIN. This ad will work pretty well, and it also counters the McCain lie about Obama raising taxes. It takes on the McCain idiocy on drilling - and raises him one. I'd say it's a good meat and potatoes ad for people who feel worse off.

What's wrong with an windfall profits tax ? Seems reasonable to me. In general, I think that soak the rich, and large corporations, and spread [some of it] out thin [while keeping some of it to reduce the deficit ]would be good policy . Also very popular. I'm glad Obama is proposing it.

I have to agree with morzer. Drilling in protected areas to lower gas prices next month is a dumb idea, too. And an untruth, to put it as nicely as I can. We all know that. Yet it's helping McCain at the polls when he constantly criticizes Obama for being against it. The average voter doesn't follow any economic or political news closely. All they see are promises to "do more for me".

As some are saying above, given the number of truly bad ideas that are being uncritically accepted by the press and public this cycle, I won't lose alot of sleep over this one.

The problem with a windfall profits tax is that it is the kind of ad hoc solution that Obama criticized when it took the form of a gas tax holiday. It may be a more effective gimmick, but it's still a gimmick: pure pander.

Exxon/Mobil made $12 billion last quarter how is a tax on that wind fall a dumb idea?

Big oil also pays taxes as percentage of dollars coming in too, and so there's a windfall tax coming in already in tandem with the windfall profits. No mention of that.

Big Oil's profits by percentage are far less than Google's, for example. Google's profit is around 25%. Now there's a windfall. Why aren't we taxing them extra heavy? No way they should be making that much money when there are starving people out there.

I own oil stocks, both directly and through 401Ks. Why shouldn't I be pissed off that the company I was smart enough to buy in on is having its money taken away and given to people who didn't?

The windfall tax idea just seems insane. Why not try to nationalize the oil companies ala Venezuela and be done with it?

marzydoats wrote...
I have to agree with morzer. Drilling in protected areas to lower gas prices next month is a dumb idea, too. And an untruth, to put it as nicely as I can.

Drilling in protected areas now to lower gas prices for my children in the future makes a lot of sense.

Isn't Obama jumping the gun? First, he should be attacking the obscenity of subsidies to the oil companies. Subsidies, also known as robbing Peter's tax payments to pay Exxon.

Lampwick, on the merits, you are, I think, simply wrong to say that this is the same as the gas tax holiday proposal. That proposal would have done nothing to benefit consumers whatsoever, and would have harmed the Highways Fund. The windfall tax, whatever else it may do, will be used to benefit consumers directly, and won't take money out of the Highways Fund. There is quite a difference. As for calling it a pure pander, I'd ask what you propose to counter McCain's fraudulent proposals with. You don't win elections by being pure as the driven snow - and it's time that Democrats and progressives saw this and took on board what the fact implies. Obama's team is doing the right electoral thing here - and more power to them.

Shorter Drum: "Obama's wrong on the merits - and I hope this is just a taste of things to come!!"

SJRSM said: "Drilling in protected areas now to lower gas prices for my children in the future makes a lot of sense."

Wrong on both points. The small amount of oil extracted would make no significant difference to prices. Equally, it does nothing to solve the issue of carbon-based fuels long-term. That's why your position is, in every sense, a loser.

I also wish he would hammer away at "the iraqi's will greet us a liberators and the occupation will pay for itself", "in iraq for 100 years" and "bomb, bomb, bomb iran".

The only thing I could support was a windfall profits tax where the companies get to deduct from their payment every dollar they spend on renewables.

But as a general rule, resentment and vengeance are not good foundations for tax policy.

Lampwick, care to explain why you attribute "resentment and vengeance" to Obama? And how do you expect to sell your complex piece of wonkery to the electorate?

Wrong on both points. The small amount of oil extracted would make no significant difference to prices. Equally, it does nothing to solve the issue of carbon-based fuels long-term. That's why your position is, in every sense, a loser.
Posted by: morzer

Some thoughts. First, we had two CAT 5 hurricanes hit our rigs in the gulf. No huge oil spills. We know how to do this safely.

The amount of oil offshore on both coasts and in protected areas is not insignificant. If it was, it wouldn't be worth the money to extract it.

I kind of agree with Pelosi that we should find out why big oil hasn't been drilling on the leases it already owns, though.

Last, it dumb to expect big oil to invest real dollars in alternate energy sources that will ultimately compete with their main cash cows. Alternate energy will come from new companies.

I think the ad is talking to the vast majority of Americans who are asking, "What about me?" Obama is scrapping his inspirational "Need for Change" oratory, since the McCain ads basically cut the legs out from under that, to a very basic "here's what you're going to get if you vote for me". I agree with Kevin that he needs to keep them coming. I also agree that we need to get back to the "Need for change" meme, but that it might have to be after Obama wins the election.

The windfall profits tax is a dumb idea...

Couldn't disagree more. As a solution, it does precious little, but at least it does no harm, which stands in stark contrast to every single facet of McCain's energy policy -- drill everywhere, drill all the time. And there's no disputing that it's a no-brainer, symbolically. The very same oil companies that have been weaseling out of their responsibilities to clean up the toxic messes they create have been reaping insane profits -- and at the very same time that poor & middle-class Americans are having difficulty deciding which essentials they'll have to cut back on in order to afford their ever-increasing energy costs.

McCain is nothing but another whore for Big Oil, and it's perfectly appropriate for Obama to tie them together this way.

I'm enough of a policy wonk to need a little intelligent explanation for why a windfall profit tax is such a "dumb" idea. I have a business background dating from coal-fired home heating and cooking days, when I made my living delivering coal. In the winter, with subzero temps, we could jack the price up almost as much as we wanted to for blokes who hadn't managed to lay in enough for the winter. It would have been "windfall profits" -- which is operationally defined as revenue returned to a seller because of a factor that has nothing to do with added value from the seller's investment. So for a common good commodity like energy (or air or water, if it comes to that and free enterprise dogmatics argue for market forces determining its cost, too), a policy to shift "external profits" to other needs of society seems to be a reasonable, not dumb idea. What is the smarter alternative for the virtual extortion of crisis selling. As -- for health services, when we happen to be anguishing from something potentially terminal, the medical "sellers" say, in effect, "your money, or your life."

Junebug, we've been there before. Google on "windfall profits" and "Jimmy Carter". Bad idea then. Bad idea now.

People think (incorrectly) that drilling for oil in the US means lower prices as opposed to drilling in other countries. One way to make this correct is a windfall profits tax and rebate scheme.

If I were the Dems in congress, I would allow off-shore leases with a sunset clause that if any area leased is not producing oil in 3,5,7 (whatever) years, they lose the lease and all payments for the leases. We would soon find out how profitable the oil companies really think off-shore drilling is. I bet they would not be very interested, but they would see no downside to locking up long term leases on the cheap with no performance expectations which is how current leases seem to be written.

I don't think the ad works because "Big Oil" has been so overworked as a pejorative that its now sounds like a tired cliché.

I never ascribed resentment or vengeance to Obama; but I think it's obvious that that's the electoral appeal.

If the American public were susceptible to logic, a good question might be: why not 'nationalize' the oil under public lands?

'We the people' are like a family who knows that a (small) box of diamonds is buried somewhere under its front lawn. If we decide that we want the diamonds badly enough to be willing to tear up the lawn, well, that's democracy.

But we can do it two ways: hire an excavating firm, or sell digging rights to a diamond dealer. In the first approach, we take the risk up front but we own the diamonds. In the second approach, we get a (small) payment up front, but then we have to BUY the diamonds. In the first approach, 'we the people' own the profit; in the second approach, the diamond dealer owns the profit.

The GOP pretends that the second approach is the only conceivable one. I wish it were possible to challenge that pretense.

-- TP

The argument I do not understand is that avoiding drilling is "saving the planet". If the U.S. ,who does drilling with better ( not perfect ) environmentally sound techniques, does not do the drilling, someone else will. I can guarantee you will get more environmentally safe drilling practices out of U.S. drilling than Nigerian, Iranian, Russian, etc. drilling.

Avoiding drilling in the U.S. is a net minus for the planet.

Also, if I were running the Obama campaign, I would have everyone carry around a tire gauge with the message, "McCain thinks inflating your tires is a joke, but it reduces gas prices by double what he is proposing, off-shore drilling. And it does it today, not 20 years from now."

I'm enough of a policy wonk to need a little intelligent explanation for why a windfall profit tax is such a "dumb" idea.

The proposed excess profits tax on the earnings of oil companies would discourage the search for additional oil, and hence would have the opposite effects on this search from a relaxation of the moratorium on offshore drilling. An excess profits tax that is expected to persist for many years discourages further exploration for oil simply because much of the profits on new oil production would be taxed away. In 1980, President Jimmy Carter introduced a windfall tax on oil companies to prevent them from profiting a lot from the high price of oil due to the Iran-Iraq war. An evaluation by the Congressional Research Service, a think tank that provides reports to Congress, concluded that the tax significantly reduced domestic oil production and raised oil imports. Disillusionment with the tax led to its abandonment in 1987. Yet the lessons from this fiasco have been forgotten, for since the post-Katrina rise in gasoline prices in 2005, members of Congress have made regular attempts to introduce legislation with a sizable excess profits tax on oil companies.

http://www.becker-posner-blog.com/archives/2008/06/energy_prices_o.html

Some may think the windfall tax, "It is going to be the gift that keeps on giving to the Republicans," but:

AMERICAN poor are supporting Democratic presidential hopeful Barack Obama over his Republican rival, John McCain, at a rate of two to one, according to a new opinion poll made public on Monday.

Taxing the oil companies' huge profits slightly offsets the amount of money they use to influence politics. Instead of just increasing taxes on oil companies, limiting the amount of money they can spend on lobbying might also reduce the impact they have on politics, but free speech protections of individuals have been extended to capital collectives.

First, we had two CAT 5 hurricanes hit our rigs in the gulf. No huge oil spills. We know how to do this safely.

Oh, Jesus, you didn't buy that bald-faced lie about how there were no oil spills after Katrina, did you?

In fact, 6.5 million gallons were spilled in multiple incidents. The post-Katrina spills were second only to the Exxon Valdez spill, which is still the US record holder.

If you're going to claim we know what we're doing, please don't repeat an obvious and easily debunked lie like that there were no oil spills after Katrina.

I just heard Obama give a speech saying if elected he will sell 70 million barrels of oil from the national stategic reserve. That is what Bush wanted to do a few weeks ago but was voted down. Why don't we have a candidate who is better than Bush on energy? Obama was right when he said that the gas tax holiday was a bogus solution. He should know that the national petroleum reserve is for real emergencies. He should be proposing that wind energy be added to our arsenal of defenses. How about better tax advantages for solar power for home owners? Why is it so expensive to install solar when its cheaper to buy a large car that gets 12 mph? Earth to Obama: stop pandering and come up with a real solution(s) to a sustainable future for our country. Get real.

Mnemosyne, do your reading and see what oil spilled where. The majority of oil spilled in Katrina was from oil storage facilities. Not drill rigs in the gulf. We still need to store oil, even when we buy it from our best pals in Venezuela, Russia, and Saudi Arabia.

Now Obama's going to tap into 70 million barrels of our strategic reserve. Unreal.

Obama's campaign emblem should be a band-aid.

>"windfall profits" and "Jimmy Carter". Bad idea then. Bad idea now."

Hmmm... Ah yes, Carter wanted to use the windfall profit tax to fund alternative energy. I think a rational observer would see that it was actually a great idea then... and now.

As we blunder down the path into the American twilight, wiser folks may realize... 'hey, Carter was right after all'.

However the dumb$hits will never 'get it'.

SJRSM: Not drill rigs in the gulf.

(11/15/2005)

A Houston Chronicle review of data from the National Response Center shows that the two storms caused at least 595 spills, incidents that released untold amounts of oil, natural gas and other chemicals into the air, onto land and into the water.

The quantity and cumulative magnitude of the 595 spills, which were spread across four states and struck offshore and inland, rank these two hurricanes among the worst environmental disasters in U.S. history. Some have even compared the total amount of oil released — estimated at 9 million gallons — to the tragedy of Exxon Valdez.

http://www.chron.com/disp/story.mpl/nation/3457319.html

“113 platforms totally destroyed, and 457 pipelines damaged, 101 of those major lines with 10 inches or larger diameter.� - U.S. Minerals Management Service May 2006

http://www.mms.gov/tarprojects/581/44814183_MMS_Katrina_Rita_PL_Final%20Report%20Rev1.pdf

that was easy....

What Obama should do posthaste is to announce that he will follow the advice of that great liberal thinker, Maxine Waters, and nationalize the oil industry. Then there will be no evil oil industry profits for the simple reason that there will be no oil industry- oil will be owned by THE PEOPLE. Then THE PEOPLE will get from their government owned and operated oil bureau the same high efficiency that they have become accustomed to expect from its public schools.

Yes, the windfall tax is a bad idea, and the energy rebate is even worse. We're at a sad state when we count on stipends from the government to help spur the economy. What we need are policy changes that will impact how people buy and use energy in the long-term, not a panacea fix.

mr irony, if you look at where the volumes of oil came from, the two biggest spills were both from oil storage facilities, and they accounted for well over half the total spill.

Damage to oil facilities from Hurricane Katrina caused four medium spills (more than 10,000 gallons) and 134 minor spills, in which 8 million gallons of oil leaked onto the ground and into waterways from Louisiana to Alabama. The largest single spill was at the Bass Enterprises Production Company site in Cox Bay, La., where 3.78 million gallons of oil spilled. Another large spill was at the Chevron Empire oil terminal in Buras, La., where the roof of one storage tank was ripped off and the foundation of another ripped out, leaking 1.4 million gallons of oil.

That's 5.1 of the 8 million from two sites that would be there anyway to process oil no matter where it comes from (Persian Gulf, etc.)

Two worst case possible category 5 hurricanes back to back that destroyed over 100 platforms and all those pipelines, over 100 over 10" in diameter...you should be amazed that it wasn't 5 x Exxon Valdez. We know how to do this safely.

sjrsm....

got it...

"The quantity and cumulative magnitude of the 595 spills, which were spread across four states and struck offshore and inland, rank these two hurricanes among the worst environmental disasters in U.S. history." - Houston Chronicle 11/15/2005

meanwhile...

how come oil companies aren't drilling on the leases they have..

don't they want america to be energy independant?

why do they want to keep america strung out?

John Hansen: "The argument I do not understand is that avoiding drilling is 'saving the planet'."

It's hard to imagine that you don't "understand" the argument. The use of fossil fuels is releasing large amounts of CO2 into the atmosphere, which is causing the Earth to retain more of the sun's heat, which is causing the Earth to heat up, which is altering the climate in ways that threaten the survival of human civilization if the use of fossil fuels continues unabated. In addition, much of the excess CO2 is being absorbed by the oceans, which as a result are becoming increasingly acidic, which threatens the viability of the entire oceanic food web from the phytoplankton on up.

In short, continued use of fossil fuels is an existential threat to the human species. We need to phase out ALL fossil fuels as quickly as possible, not mine and burn more of them, whether from US coastal areas or anywhere else.

You may not agree with this argument, particularly if your preferred source for scientific information regarding anthropogenic climate change is Rush Limbaugh. But it is hard to believe that you don't "understand" it.

I am not much concerned about a windfall profits tax on the oil corporations. It is much more important to implement a carbon tax on ALL fossil fuels, in order to capture the costs of their use that are now "externalized", which means "foisted off onto the public". When the market is forced, by means of a carbon tax, to recognize the true costs of fossil fuels, alternative sources of energy such as wind and solar will be able to compete on a equal basis.

mr. irony, you genuinely ask a good question about the leases, which I had already raised in my 12:23 post. We should raise the rent or require them to drill. But that's not as sexy as "Here's your free $1000 check." and we still need to start down the drilling orad now so our kids won't be in a worse spot in a decade or two.

The windfall profits tax is a dumb idea

I think that claim could use some justification.

srsjm: But that's not as sexy as "Here's your free $1000 check."

as opposed to waiting to drill after oil doubled in price...(from 2001 to 2005)
then waiting some more..
i mean..
what do oil companies have to gain by not drilling...
?
Big Oil's biggest quarter ever: US$51.5 billion in all
oh right...

That's 5.1 of the 8 million from two sites that would be there anyway to process oil no matter where it comes from (Persian Gulf, etc.)>/i>

SJRSM, oh you mean that the 8-5.1= 2.9 million gallons of should be counted since the rest didn't have anything to do with local production? I see your point -- 2.9 million gallons isn't much. Not even enough to mention, really. I spilled that much in my backyard just last week.

By the way, the Santa Barbara oil spill that contaminated 35 miles of California coastline was "only" about 3 million gallons of crude oil.

More to the point, though, the amount of petroleum spilled during Katrina/Rita is irrelevant the argument about the safety of offshore drilling. Katrina wasn't a accident. There was advanced warning and systems were supposedly designed to handle hurricanes (which they didn't do very well). The risk of offshore drilling that most people are concerned with is from unforeseen events caused by mechanical failure and human error.

... we've been there before. Google on "windfall profits" and "Jimmy Carter". Bad idea then. Bad idea now.

Um, no we haven't. Temporary interruptions resulting from geopolitical crises don't compare to peak oil, the fact that the planet is now rushing towards the complete depletion of a nonrenewable resource. A policy that focuses exclusively on increased drilling, without any calls for conservation & the development of alternate, renewable technologies to address our energy needs, simply exacerbates the problem. But why would we expect anything else from the modern Republican Party? (In fairness, I'll say about parts of Obama's energy plan that both biofuels & "clean coal" are pretty stupid ideas.)

Oh, for what it's worth, selective search terms yielding a slew of right-wing rants by the likes of Malkin, Goldberg, & the American Spectator as support for your point, such as it is, demonstrates how pitiful that support is.

Iran boasting today that it has a new weapon that can hit ships 200 km off its coast and that they can stop boat traffic in the Strait of Hormuz, is going to completely change the "high price of oil" argument.

I have a sinking feeling that "bomb, bomb, bomb,
bomb, bomb Iran" is going to undergo a popular comeback.

More to the point, though, the amount of petroleum spilled during Katrina/Rita is irrelevant the argument about the safety of offshore drilling. Katrina wasn't a accident. There was advanced warning and systems were supposedly designed to handle hurricanes (which they didn't do very well). The risk of offshore drilling that most people are concerned with is from unforeseen events caused by mechanical failure and human error.
Posted by: aartimus aardvark

How many "Santa Barbara"s have their been in the Gulf? After all, there are well over hundreds of rigs out there. Where are all those unforeseen events? Ever fly over the gulf and look down at all the rigs?

How many spills have there been in the North Sea?

People are perfectly willing to go grab $1000 a head from the oil companies in order to buy votes for November, but not willing to look into smarter leasing of offshore plots or more stringent regulations for drilling? That's how it looks to me.

Junebug wrote...
Um, no we haven't. Temporary interruptions resulting from geopolitical crises don't compare to peak oil...

But the windfall tax is just a temporary fix, a band-aid, since by definition a windfall is a stroke of luck.

And I was careful with my reference not to use a right wing source for the argument. Unless Becker-Posner is a right wing source.

But the windfall tax is just a temporary fix, a band-aid, since by definition a windfall is a stroke of luck.

Thank you for making the case against continued drilling for me. It's a temporary fix, a Band-Aid, since it only hastens the end of that particular supply. And as that supply diminishes, prices will only rise further.

The windfall tax, on the other hand, is something that Obama's offering in the context of an energy plan that chips away at our reliance on not just foreign oil, but fossil fuels in general. It's imperfect (for the reasons I mentioned before), to be sure, but head & shoulders above McCain strategy of drilling, which offers far less to our supply of oil than it does the profits of the oil companies.

... I was careful with my reference not to use a right wing source for the argument. Unless Becker-Posner is a right wing source.

Do glibertarians count? Really?

Junebug wrote: "Temporary interruptions resulting from geopolitical crises don't compare to peak oil."

SJRSM replied: "But the windfall tax is just a temporary fix, a band-aid, since by definition a windfall is a stroke of luck."

The "windfall" is not a stroke of luck. It is an inevitable and predictable result of peak oil. The reality of peak oil means a long-term situation of declining supply in a time of rising demand, which will persist until all of the economically recoverable oil is gone, or other energy sources displace oil -- and the "windfall" profits will persist throughout this period. If there is to be a "windfall" tax on oil company profits, it should also be in place until the oil is gone or replaced by other energy sources.

The notion that Onion Belt McCain has an "energy policy" is laughable. His "energy policy" is exactly the same as what we already have - kill foreigners and steal their oil, combined with idiotic giveaways to the oil companies.

Will a windfall profits tax be a good idea? Perhaps, perhaps not. The idiots raising the spetre of Jimmy Carter are the same thickwitted tools who are going around with tire guages pretending that this represents the entirety of Obama's energy policy. But you can't expect much from the Republican Party, they are bereft of ideas and are demonstrably incompetent at governance. That's why Onion Belt's campaign is entirely built on personality - both pro (oooh, vote for the guy who was a prisoner of war - he's a hero, oooh, don't vote for the uppity black man - he's a celebrity).

How many spills have there been in the North Sea?

I guess you missed the news from Norway last year. There have been dozens of oil spills from the off-shore platforms in the North Sea, with a major one last December.

Sorry, but if you're going to claim that this is a technology that we've "perfected," we probably need to go at least one full year with no major spills from offshore platforms, don't you think?

I guess you missed the news from Norway last year. There have been dozens of oil spills from the off-shore platforms in the North Sea, with a major one last December.

I think SJRSM was trying to simultaneously argue that "we know how to do this safely," rendering spills a non-issue, and yeah, okay, maybe we do spill a lot in the Gulf, but the North Sea is worse. Comical.

The windfall profits tax is a dumb idea....

It's not only a dumb idea, but it also shows that Sen. Jesus doesn't think much of the intelligence of his supporters.

... it also shows that Sen. Jesus doesn't think much of the intelligence of his supporters.

Whereas Sen. Methuselah hits the bull's-eye on the intelligence of his supporters by talking about oversexed white girls.

It's not only a dumb idea, but it also shows that Sen. Jesus doesn't think much of the intelligence of his supporters.

McCain thinks so little of his supporters that he assumes you know more about Britney Spears than you do about gas prices.

Hey, look, over there, it's something shiny! Vote McCain!

So we tax the oil companies for their profits and give the money to everyone in $1000 checks. And the oil companies don't raise their prices...why? Their profits by percentage is right in the mix for industries in the US of A. Not nearly so good as drug companies. Better than most manufacturing.

Is Obama going to place price controls also? If so, what's the motivation to sell to the US of A when there is plenty of market in the rest of the globe? Sounds like a recipe for creating shortages.

Secular Animist -

I'm sorry, I should not have said "The argument I do not understand is..."

when what I meant was, "The argument, which I do not understand how anyone but a completely naive person could believe in, is..."

I stand corrected.

To understand how avoiding drilling is 'saving the planet,' park your car in the garage, shut the garage door, leave the car engine running and remain in your car until you realize the earth is a closed eco-system.

When did the Earth become a closed ecosystem? Apparently, no one told the Sun.

Earth is essentially a closed ecosystem, with the only thing being imported to
support it is the sunlight. The water, nitrogen, oxygen, carbon dioxide, and
all the other things are constantly recycled back and forth into various
compounds by the metabolism of the organisms that live here.

But you knew that.

At 12:41 PM Lampwick wrote: "...resentment and vengeance are not good foundations for tax policy."
As shown by the Republican Party for the last two decades. There is no other way to explain their "tax" policies than being those of "resntment and vengeance" against anyone who wants them to contribute their fair share of tax revenue.
Unless the oil companies are deliberately with-holding oil from the market present conditions meet the definition of "windfall" and there is no reason not to enact such a tax.

Let's try this one again. If people are struggling to buy gas, and will be struggling to heat their homes too, they they are going to need money right up front. Over the long term it would be nice to see income inequality starting to move in the opposite direction from where it's been going the last 30 years, but for now we need something happening a lot faster.

The oil companies are making huge amounts of money, there's no sign they're doing anything with it to address energy issues -and why should they when it's going so well for them? The market place is NOT going to help consumers on this; this is one reason why there IS a role for government.

Large numbers of citizens with a big problem not of their making (in the immediate sense anyway), oil companies with vast amounts of money they are not doing anything socially useful with; is it really so hard to see a solution here? It's not nice to talk about taxation as a form of social justice (though tax policies that favor the wealthy are okay for some obscure reason), but clearly to allow this to continue is to invite social collapse in the extreme case, and a lot of hardship at the very least.

A windfall profits tax on the oil companies is not a long term solution, but it's something that can be done now to help us get to a better long term solution. And, most of that money is going to go right back to the oil companies anyway! If we can just get past the knee-jerk conservative horror over any kind of tax, maybe we can start using tax policies to solve problems instead of using them to enrich the few on the backs of the many.

It's not just about rebates after all, it's also about funding ways to migrate to a more sustainable energy policy and rebuild America for the long term. That will grow the whole economy and benefit the lower and middle classes if done in the right way. It will make America stronger and richer - but not right away. That's where market forces fail - they do not favor long term solutions over immediate returns. That's why we need government, something mindful of the long result of time.

This ad is already falling flat. Obama takes money from oil interests as well, and this is well known. And it is deceptive to suggest that reduced corporate tax rates across the board is a tax cut targeted to oil companies. Also, what the strategy desperately needs to keep hidden is that the oil companies pay astronomical amounts already in taxes - corporate taxes are a % of profits, so those huge profits mean huge revenue for the government.

Big Oil’s Big Profits Padding the Pockets of McCain Campaign

by Tula Connell, Jul 31, 2008

Once again, Exxon Mobil made U.S. corporate profit history, pulling in $11.68 billion in second quarter income, the highest quarterly profit rate of any U.S. company in history.

It must be gratifying for Sen. John McCain to know that his sudden flip-flop to support Big Oil’s long-held dream of offshore drilling is tapping into some of the deepest pockets on the planet. Because right after he reversed his long-standing opposition to oil drilling, he hit a gusher of campaign funds from the oil and gas industry, according to The Washington Post:

Oil and gas industry executives and employees donated $1.1 million to McCain last month—three-quarters of which came after his June 16 speech calling for an end to the ban—compared with $116,000 in March, $283,000 in April and $208,000 in May.

McCain’s gambit to stock up his faltering fundraising struck a rich vein. As the Post continues:

“The timing was significant,� said David Donnelly, the national campaigns director of the Public Campaign Action Fund, a nonpartisan campaign finance reform group that conducted the analysis of McCain’s oil industry contributions. “This is a case study of how a candidate can change a policy position in the interest of raising money.�

The Public Campaign Action Fund has issued a new report detailing Big Oil contributions to McCain. Check it out here.

Offshore drilling is one of many recent flip-flops by the senator from Arizona.

First McCain opposed torture, now he doesn’t.
McCain long opposed Bush’s tax cuts to the wealthy—until he realized along the campaign trail that wealthy people are where the funds are. Now tax cuts for the wealthy are the centerpiece of his domestic policy agenda.
And, oh, surprise:

McCain strongly opposes a windfall-tax on oil company profits. Three weeks earlier, he was perfectly comfortable with the idea.
(Get lot more McFlip-flops at Carpetbagger here. And check out Bill Press’ ongoing “101 Reasons to Vote Against John McCain.�) Also, stop by at McCain Revealed, where you can download fact sheets on a gamut of McCain’s policy positions on working family issues like the economy, health care, retirement security and more.

Google search reveals 1- 10 of 1,110,00 for McCain has big oil in his pockets

I love all of the people sobbing, "Won't someone PLEASE think of the oil companies? Where is the compassion for the poor, innocent oil companies?"

Please, make that the centerpiece of the McCain campaign: "Sure, the oil companies made record profits and you can barely put food on the table now that gas is $4.00 a gallon, but why tax them at a higher rate? Don't the oil companies deserve to put food on their kids, too?"

Please make the poor, beleaguered oil companies the centerpiece of the McCain campaign. I'm begging you.

Wind fall profits a dumb idea?

Not in a monopsony allocation model - a perfect fit for a John Nash type allocations.

As someone who did the Economics/Forensic accounting for a north slope oil bid rigging case - settled by the defendants buying the plaintiff - there are plenty of questions about economics of oil to be answered - BEFORE WE APPROVE selling drilling rights to the ANWR.

1. Why would a rational oil company drill in ANWR when there are proven productive wells on the slope by the pipe line?

2. W/O the pipeline where will you find the tankers to ship all the new oil?

3. Why charge less for the new oil if we are willing to pay more?

4. Why sell in America when the price is higher in Indonesian market?

5. Why develop capacity IN N America when you have severeley underserved Markets in India and China, and you will increase revenue there where in N. A. you are going into diminishing returns and will lower prices and not get as much revenue?

6. Given 6; why not drill by your markets in China and India with available platforms and lower supply costs?

What the oil companys are playing for is Gulf and California light sweet crude. They will drill and sell it is by US Refineries and they can raise some revenue by adding production - but again why would they lower cost when consumers are accepting $4 per gallon and get this the Government is going to help consumers pay for heating oil! A reverse tax no less - subsidy to increase if we raise the price.

> Also, if I were running the Obama campaign, I would have
> everyone carry around a tire gauge with the message, "McCain
> thinks inflating your tires is a joke, but it reduces gas prices by
> double what he is proposing, off-shore drilling. And it does it
> today, not 20 years from now."

yes! please! all those carrying tire gauges needs them shoved up their butts, since mccain's "drill here drill now" is exactly the false panacea they're trying to pin on obama.

4. Why sell in America when the price is higher in Indonesian market?

5. Why develop capacity IN N America when you have severely underserved Markets in India and China, and you will increase revenue there where in N. A. you are going into diminishing returns and will lower prices and not get as much revenue?
Posted by: Steve in Seattle

Especially if your profits are restricted by one customer (US of A) but not another. Why would you sell to the US of A first?

What kind of moron thinks that increasing the taxation on the people who have seen record profits - not just for their company, but for any company ever, is creeping socialism? But I guess anyone who thinks voting for Onion Belt McCain is a better idea than voting for someone competent isn't really playing with a full deck.

My God, McCain is so clueless on world events that he thought assaulting the innocent Iraqi people was a good idea. No one with the sense God gave a mosquito still believes that.

What kind of moron thinks that increasing the taxation on the people who have seen record profits - not just for their company, but for any company ever, is creeping socialism?

Since you're the only person in this thread who used the phrase "creeping socialism", it must be you.

Explain to me why oil companies would not put us on the bottom of the list of folks to sell oil to when we fix the price and restrict profits while other countries don't.

I assume that the question of whether Becker and Posner are right wing was a joke. Is the pope Catholic. They also get basic facts wrong. The windfall profits tax was not a response to the Iran-Iraq war. It was part of a package deal in which oil prices were decontrolled. Before the reform the price of "domestically produced" oil was regulated at roughly a pre-OPEC level. This was an insane distortion in the price mechanism. The windfall profits tax was the relatively pro-market alternative (giving oil companies a windfall and not taxing it was not politically feasible).

I googled Carter and "Windfall profit" but I used google scholar. I find a criticism of the proposal published in Sept 1979.
http://www.osti.gov/energycitations/product.biblio.jsp?osti_id=5525134

Khomeini took power in Iran in Dec 1979.

http://en.wikipedia.org/wiki/Iranian_Revolution

The bill passed later, but it was in the works and not a response to the second oil shock.

Given the error on basic history (which I recognised before I googled) I don't see why we should consider the views of Becker and or Posner as informative on the issue under debate. They are very smart, but they are totally unfamiliar with the basic history of the episode they claim to discuss.

Actually the Becker/Posner blog has a very misleading description of the end of the windfall profits tax too "Disillusionment with the tax led to its abandonment in 1987. " Recall the price of oil tanked in 1986. In the article to which I linked above http://www.osti.gov/energycitations/product.biblio.jsp?osti_id=5525134

"^The proposal is based on assumptions that domestic crude oil will rise to $22 per barrel" (note this shows that the proposal was not a response to the second oil shock during which prices rose to $39.50/barrel). In 86 the price fell as low as $11.575/barrel. The windfall profits tax was ended when the windfall ended.

Note also that Reagan and the Republican Senate didn't remove the tax during their 6 years. It was removed by the Senate after the Democrats retook control. It was removed because there was no longer a windfall to tax. Concerns about the incentive effects of the tax might have had an effect but it was removed at a time of tanking oil prices when congress critters were least worried about the need to find oil or alternative energy either.

Now it is possible that the Becker Posner blog gets the hard part right even though they mistate simple facts. However, I think gross errors are a sign of carelessness which makes the post unconvincing no matter how eminent its author is (or authors are).

Just a reminder to the moron crowd claiming that Obama's energy policy (as opposed to Onion Belt's "murder & drill" continuation of the Bush Administration status quo) actually works. There is a class of idiot who thinks that Carter was wrong to suggest conservation. Those idiots brought us Reagan and SUVs. Of course these are people so stupid that they think these are good things.

Yes, I agree with others who have asked here, why is a windfall profits tax bad? Kevin, you should address this, and not just blandly assert it, because I don't think it's obvious. On the other hand, I do see the benefit of the tax rebate of $1000 per person (not sure if this is for everybody, or only below a certain income level). I own a home that uses fuel oil, and I am scrambling right now to try to protect myself from a big whammy this winter. And what about low income workers who need a car to drive to work; that $1000 would mean real relief unlike the stupid "gas tax holiday."

If not a windfall profits tax on oil, I think there should be a income tax surcharge on the wealthy to give rebates to lower income people. Energy costs are much more of a burden to low and middle income folks.

The unifying theme for all of McCain's flip-flops: he has "sold out to the right wing extremists who now control the Republican Party." Sold out. Sold out. (Pundits please note: He's not the independent maverick he once claimed to be.) Proof: the strategist for the right wing extremists is Karl Rove, and it's Karl Rove henchmen who specialize in personal attacks on Democratic candidates who are now running McCain's campaign.

the : Those idiots brought us Reagan and SUVs.

look how that worked out for g.m.

McCain is for Oil companies
Obama is for everybody.

Which group are YOU in?