As the US television journalist John Stossel points out, when politicians start calling for “windfall” taxes on oil or other evil firms for making “obscene” profits (which begs a question of what the right level is), they ignore the fact that such taxes will reduce dividends and shareholder returns, including those of pension funds. And the pension fund members – us ordinary Joes – lose out when politicians decide to come a-lootin’.
Part of the trouble is the vocabulary. “Windfall”, like “windfall apple”, implies that a good – such as a juicy apple – has fallen to earth and the acquirer of said has done nothing to earn it. It is, so the argument goes, just dumb luck that the chap who found the apple did so. And so, to switch to those Big Oil firms, there is no merit in clocking up monster profits when the oil price spikes. But this ignores the fact that oil firms and their investors took a risk in seeking to find, process and sell oil products and those risks could easily have gone wrong. We tend to forget how risky, both physically and economically, investing in oil is. When Brent crude was trading below $10 a barrel in the mid-90s, did those politicians who want to chase a few votes by bashing Big Oil cry any tears for the oil firms that were taking big losses at the time? No, of course they did not. And frankly, given that petrol is so heavily taxed in many major nations today, it is, to put it politely, rank hypocrisy for any politician to strike attitudes on the supposed venality of oil firms at all.
By the way, John Stossel is a marvel. If only we could have a few of him in the British television media.
Would that it were possible for some oil executives to do what Howard hughes did years ago to Owen Brewster. You are all too young to know??
Here would be the retort (not that of H H however):
“In reply, Senator, a large measure of increase in oil prices, in dollars, which is the world pricing base, has been and is continuing to be caused by you here in Congress.
“Not only by the interdictions on domestic developments of all kinds, though that certainly has effects — in dollar pricing, where the dollar is taken as a call on future goods and services, you in Congress reduce that value by spending more than you take in, more despite ever increasing revenues received, every year. Can you point to a year when revenues have declined, or even been flat?
“Not only that, you continue to spend beyond the revenues that will be taken in during your entire political careers, spending with an impunity we in industry can never have; nor should we; nor in fact should you.
“The sovereign debt of our country is exemplified by the dollar prices – only one of which is oil. Your actions degrade that sovereign debt and along with it the value of the dollar and raise the price of oil, and all else that is priced in those dollars; and – you keep doing it.
” If for puposes of revenues from these current conditions, you decide you should be able to assign a part of the results of increased prices; then place the taxation as a percentage of the prices charged, across the board, no special treatments, no subsidies, no exemptions – if you have not that will, that much of these effects will rest on your actions.
“That is no doubt not the answer you are seeking. But it is the right response for what you have stated are the objective and purpose of this hearing.”
H.O.C.
Tsk tsk, another misuse of “begs the question”. I mean, really.
Of course the “obscene profits’ talking is coming from people who believe that there are only two kinds of ethical businesses. Those would be law firms and abortion clinics.
Good to hear from the Pedants’ Corner.
Aaa, get a life, or for that matter, a brain.
RRs, I loved that, very good!
Sulking over? Good. Now go quietly look up what “begs the question” means.
Aaa, we know what the term means. When people use words like “obscene” to describe say, high corporate profits, it begs the question of what level of profit they regard as morally ok.
Either you are very thick, a troll, or both. In which case, do us a favour and fuck off.
Thanks.
Jonathan –
Be not upset.
Over the more than 80 years, “me ‘ide ‘as ‘ardened.” and the pins seem to come more from pricks than vice versa.
On pedantry – open guilt. Still, at times, these convocations can be reminiscent of a gathering of Southern Baptist preachers, agreed on what needs be sermonized, but not on how to say it.