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The Politics of Oil

April 2, 2008


When you need money, what is the best thing to do? The typical reaction in government is to go after anybody that has money, especially if the amount sounds excessive. How long have Americans been sidetracked by politicians that howl over profits that oil companies manage to make across the board?

Doubtless, oil companies pay taxes on profits to fill the government treasury. If not, the domain of politicians is to correct the problem in a fair and equitable way. Blindly reacting with a windfall profits tax does not resolve the basic taxation issues. Because of the power lawmakers have to actually collect tax money from corporations, politicians have nothing meaningful to say against corporations unless laws are being violated.

The presidential candidates that are screaming now in the effort to sound concerned are the ones you should be looking at twice. Are these candidates offering real solutions? Politicians often play both sides while lobbyists from both sides offer to wine and dine them.

Right now, the presidential race has momentarily focused on the shadow of big oil. Big oil unquestionably consists of what has evolved into multinational corporations. Because of the nature of the market, oil multinationals still supply a large number of valuable jobs to the U.S. economy and actually work to support the U.S. economy rather than simply exporting jobs like many multinational corporations.

If the U.S. didn’t have nationally-based refineries, the sweet crude that America imports would be useless. Whatever profits that are made are created by processing and distributing refined petroleum products, including fuel, while continuously maintaining the oil infrastructure and national pipelines that crisscross the nation to meet the nation’s hunger.

gas-clinton.jpg“The president is too busy holding hands with the gas-obama.jpgSaudis to care about American truck drivers who can’t afford to fill up their tank any longer,” chided Hillary Clinton. “We need a president who can stand up to Big Oil and big energy companies and say enough is enough,” chimed Barack Obama. Because of the fact that the Saudi economy is flush with dollars and is suffering from hyperinflation as a result, the Saudis are somewhat reluctant to increase oil production to receive more devalued dollars. Any production increase for the United States will be because President Bush decided to “curry favor” with the Saudis. Honest profit is the backbone of America. Since when is honest profit too much Mr. Obama? If oil companies are following the rules that lawmakers set out, how is the oil business to be blamed?

Naturally, big business is not squeaky clean and has skeletons in the closet like most people. Politicians don’t cover up big oil skeletons like they do the offshore banking skeletons that they have created with tax law. Politicians can’t play both sides and expect to make a valid point. Yet, that is exactly what presidential candidates are trying to do as they tramp across Pennsylvania and the nation, publicizing their newfound populist ideals and concerns.

The candidates can lash out at the administration all they like. The fact is that the whole of them are active federal politicians and lawmakers that have had plenty of time to work on solutions to corporate tax law and the “dangers of corporate profits”. Railing against corporate profits while they hold the key to siphoning those profits sounds hypocritical, doesn’t it? Politicians need a bad guy to focus on. The appearance of excessive profit when the national economy is suffering gives power to political causes during the election.

gas-price.jpgThe purpose of corporations and business in general is to generate profits from business activities. There is no wrong in corporate profits as long as equitable laws are being followed. Democrat House Representative Jay Inslee said to one executive, “If you were going to give awards for taxpayer abuses, this would win the Heisman and the Oscar and the Nobel Prize.” Whether Inslee is referring to abusively high oil prices or the unwillingness of his fellow politicians to properly tax corporations through proper means like properly developed corporate tax code is a big question.

61% of all big business pays not a penny in taxes. There is plenty of blame to go around. Everyone on the paying end wants energy that is reasonably-priced. People don’t want to be gouged. Big oil is not entirely responsible for the sales of fuel. Privately held distributors have their own policies and opportunities that have little or nothing to do with big oil profits.

Politicians cannot corner the market of sanctity on this topic. The fact is that the nation is hopelessly addicted to petroleum and will be compromised unless real action is taken. Big oil, multinational corporations and politicians have a stake in that reality.

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