Liberal Lies: Windfall Profits and Big Oil

In this week's installment of "Liberal Lies," I discuss Obama's windfall profits tax on big oil.

Thanks to XM radio, I was able to listen to my favorite conservative talk show hosts on "America Right," channel 166: Mark Levin, Sean Hannity, Michael Reagan, Rusty Humphries, etc, who discussed Democratic presidential candidate Barry Hussein Obama's recent "energy/economic plan" to take the windfall profits of "Big Oil" (boy the libs love that term) and use them to provide needy families with $1000 worth of energy rebates (gasoline, heating oil in the winter, electricity, etc.).

According to CBS News, "Democratic presidential candidate Barack Obama on Friday called for a $1,000 'emergency' rebate to consumers to offset soaring energy costs amid fresh signs of a struggling economy with the nation's unemployment rate climbing to a four-year high.

Obama told a town-hall meeting the rebate would be financed with a windfall profits tax on the oil industry."

Now really...how much sense does that make? In mathematical terms, a 62.5% tax increase on oil companies is necessary to come up with the money to provide this energy rebate, or about $75 billion. As the Politically Drunk blog points out, "Do we impose a 62.5% tax on Oil company profits, in which Institutional and individual investors dump the stocks; relegate them to penny status; bankrupt the industry; and cause an insta-depression? Or... Does the government pick up the tab, causing a record budget deficit to balloon further and destroying the promises of government investments in alternative energy?"

You see, everyone likes to blame "Big Oil." They're an easy target; and the Democrats know how to push our buttons. The corrupt mainstream media provides endless reports on oil companies record profits, and instinctively we assume that they're colluding to keep the price of oil up.

Leftist groups like Consumer Watchdog perpetuate this lie that Big Oils has collectively bent over the American public: "'The 'drill now, drill everywhere' campaign is a hoax on Americans,' said Judy Dugan, research director of Consumer Watchdog, based in Santa Monica. 'Oil companies are able to sit back and make more money by selling less.'"

What the IDIOTS, to quote conservative talk show host Mark Levin, won't tell you is that prices are driven by DEMAND. Hmmm...where is the demand coming from? How about China or India for example, as their countries become more modernized? To match increased demand while keeping prices down, industry needs to interject more SUPPLY into the stream, supply in the case being MORE OIL. That's economics 101.

Furthermore, where are the "obscene" big oil profits going? The Left would have you believe that the tens of billions of dollars in oil profits are being shared among a few rich oil tycoons, like Al Gore at Occidental. But in fact, these oil profits are being shared among many. The Left and their benefactors in the mainstream media won't tell you this, but is that despite the low profit margin (i.e. $.08 profit for every dollar spent, compared to $.20-.30 for the computer industry), not only is Big Oil paying an astonishing amount in taxes, but those “record profits” are actually going to people’s 401k’s for one thing…that wealth isn’t just going to ONE “oil despot,” it’s being shared ACROSS the board. But we’ve been so indoctrinated by the MSNBC’s, CBS’, and New York Times of the world to think that Big Oil is “bending us over,” we as a people automatically believe the lies.

Note the following from one of my favorite authors, John Hawkins:

"Unsurprisingly, given the outrageously high cost of gas and the Left's penchant for pointing the fickle finger of blame at big corporations, we've heard a lot about how big oil is gouging consumers.

However, when you take a look at the actual numbers in California, for example, you find that the "Distribution Costs, Marketing Costs and Profits" for the oil companies make up only 8 cents per gallon of gas.

That doesn't sound like gouging, does it? But if you believe it does, what would you say about the 70 cents per gallon in taxes that's paid by California consumers? Additionally, as Karl Rove has pointed out,

(Oil companies) make about 8.3 cents in gross profit per dollar of sales....Electronics make 14.5 cents per dollar and computer equipment makers take in 13.7 cents per dollar, according to the Census Bureau. Microsoft's margin is 27.5 cents per dollar of sales.

Sure, these oil companies are huge and therefore, even an 8.3% profit adds up to billions of dollars, but when you look at the relatively small percentage that they're putting in their pockets as compared to the humongous share that the government is raking in, it's pretty clear that it's the government, not the oil companies, that is gouging consumers."

One would think that with these facts, it would be pretty to combat mindless leftist and liberal lies...

But it isn't...we'll keeping trying, though.