May

25

Oil derricks in Kilgore, TexasThe Democrat controlled Congress recently began holding hearings into the seemingly obscene profits of the five major “big oil” companies Exxon Mobil, ConocoPhillips, Chevron, Shell Oil, and BP America. However, the hearings not about elected officials protecting America, but are about politicians trying to protect their power; it’s about politics and nothing more. While the Democratic Party accuses President Bush of lying to America, they use the gas prices to deceive the voters, lying to us so that they can win an election.

The solution advocated by the Democratic Party is to “punish” the oil companies for their greed. In a truly Democratic Party way of doing things, they want to slap on an “excessive profits” tax. That means that the ill-gotten profits will be taxed at a greater rate than other profits. So the Democrats’ method of punishing the oil companies is to force them to share the excessive profits with Congress. Higher taxes: now that is a typical Democratic solution to a problem!

A business exists to make a profit; the larger the profit, the better for the company. When a business experiences higher taxes, the normal reaction is to simply pass the higher cost on to the consumer—that’s you and me—so that the company can maintain its profits. This applies to “big oil” as well. In order for big oil to overcome this new tax, we will pay more for fuel. This way, the oil companies keep their outrageous profits while the Democrat controlled Congress gets their profit . . . a profit that they have invested nothing to earn.

Put simply, oil companies will do what they need to do to maintain their profits. If Democrats try to tax away those profits, then the oil companies will raise our fuel prices (as any business would normally do). This means that Congress will be contributing to higher fuel prices, not solving them! As a result, the cost of moving goods, food prices, and other things we purchase will be driven higher and inflation will go higher . . . all because the Democrats raise taxes to solve high price problems.

Despite the bantering of the Democrats and the media, there are additional factors involved in the rising fuel costs that are rarely mentioned but play a significant role. First, since the price of oil is based upon the US dollar, the devalued dollar is partially responsible for the soaring price of oil. Second, the rapid industrialization and mobilization of China, India, and Indonesia, three of the world’s most populous nations, creates enormous demands on the supply of oil. This creates a supply and demand crisis and, as a result, the price of oil continues to climb. Finally, add to that the commodity trader who sees oil as a profit maker: the higher the price, the greater his profit. When we look at these three factors, we find the ones who are really behind the skyrocketing price of oil.

This does not mean that the oil companies are not to blame, for they could voluntarily choose to reduce their profits in order to lower the cost of fuel at the pump, or they could invest in more refineries, or they could do a number of other things. However, contrary to the Democratic Party’s claims, the oil companies are not the only cause, nor the primary cause.

Beyond all this, it is ironic, even hypocritical for Congress to accuse someone of ripping off the taxpayers. The oil companies are making an absurd amount of money (about $40 billion per year, which is about $3.3 billion each month), and Congress is spending an absurd amount of money (about $3 trillion per year, which is over $8 billion per day), much of it on ridiculous pork barrel projects. That means Congress spends almost three times per day what the oil companies make per month. If the Democrat controlled Congress really cared about the taxpayers, then they would eliminate their wasteful spending. Additionally, they would permanently reduce or eliminate the over 40 cent federal fuel tax.

The Democrats are playing politics with the American economy in a dishonest way. The Democrats are looking for more income from a dishonest source. The Democrats are going to blame the oil companies while they justify their own greedy tax that will end up placing an even larger burden on the backs of the American consumer. Meanwhile the Democrats will continue to publicly flog that scapegoat called “big oil” like it is some kind of boogie man. While they play their political games and find even more billions to waste on more pork spending, the Democrats will chuckle all the way to the ballot box because the public bought into their dishonest rhetoric.