OPINION/COMMENTARY

State and Federal Treasuries "Profit" More from Gasoline Sales than U.S. Oil Industry

High gas prices and strong oil company earnings have generated a rash of new tax proposals in recent months. Some lawmakers have called for new “windfall profits” taxes—similar to the one signed into federal law in 1980 by President Jimmy Carter—that would tax the profits of major oil companies at a rate of 50 percent. Meanwhile, many commentators have voiced support for the idea of increasing gas taxes to keep the price of gasoline at post-Katrina highs, thereby reducing gas consumption. However, often ignored in this debate is the fact that oil industry profits are highly cyclical, making them just as prone to “busts” as to “booms.” Additionally, tax collections on the production and import of gasoline by state and federal governments are already near historic highs. In fact, in recent decades governments have collected far more revenue from gasoline taxes than the largest U.S. oil companies have collectively earned in domestic profits. According to data compiled by the U.S. Department of Energy’s Energy Information Administration, the domestic profits of the 25 largest oil companies in the U.S. have been highly volatile since the late 1970s. In contrast, federal and state taxes on gasoline production and imports have been climbing steadily since the late 1970s and now total roughly $58.4 billion. Due in part to substantial hikes in the federal gasoline excise tax in 1983, 1990, and 1993, annual tax revenues have continued to grow. Since 1977, governments collected more than $1.34 trillion, after adjusting for inflation, in gasoline tax revenues—more than twice the amount of domestic profits earned by major U.S. oil companies during the same period. As illustrated in Table 1, since 1977, there have been only three years (1980, 1981, and 1982) in which domestic oil industry profits exceeded government gas tax collections. In the remaining years, gasoline tax collections consistently exceeded oil industry profits, reaching a peak in 1995 when gas tax collections outpaced industry profits by a factor of 7.3....

When government's rights eclipse property rights

"Sustainable development" is a term used to justify new policies that, inevitably, erode private property rights. Proponents of sustainable development are convinced that the collective benefits of these policies far outweigh the value of any individual's private property rights that may be lost. Apparently, most Americans are willing to accept this reasoning. The people of New London, Conn., through their elected officials, are taking the private property of several of its citizens to give to other private citizens who promise to pay more taxes. The people of Riviera Beach, Fla., are planning to take the private property of nearly 6,000 citizens to give to other private citizens who promise to pay more taxes. This practice has become quite acceptable over the last quarter-century. The clear language of the constitutional requirement that land taken by government be for "public use" has been changed by practice to allow government to take land for "public benefit." Having secured this new authority, which the Supreme Court validated in the recent Kelo decision, government has expanded its authority to restrict use of private property in a variety of ways that are said to provide a collective public benefit. The King County ordinance, for example, which prohibits private land owners from using 65 percent of their land – without compensation – turns the U.S. Constitution on its head. The policy is justified and acceptable because it is said to provide a collective public benefit of greater value than the loss suffered by the individual private property owners. These are only a few examples of how sustainable development is eroding the principle of private property rights. These are big, gaudy examples. Sustainable development is permeating public policy through ordinances, rules and regulations that are rapidly sucking all the oxygen from the very idea that individuals have an inalienable right to own and use private property....

Tim Russert's Conflict of Interest

During the September 18 edition of NBC's Meet the Press, host Tim Russert conducted a softball interview with disgraced former President Bill Clinton about his "global initiative" meeting being held in New York. During the conversation Clinton hinted at why Russert had invited him to do the show. "I'm not pandering here to NBC," Clinton said, but he sang the praises of Jeffrey Immelt, the head of General Electric, the parent company of NBC. Clinton said Immelt was one of those business leaders who had accepted the man-made global warming theory and was pursuing a "clean energy future" for his company. It wasn't mentioned that Immelt was a participant in the Clinton conference. Now why didn't Russert tell us that? On the surface, it seems that Immelt has made common cause with the radical environmentalists. As National Public Radio has put it, Immelt has announced major investments in so-called "green technologies" to "limit the levels of carbon dioxide and other environmentally harmful agents" produced by his businesses. Action Fund Management LLC (AFM), investment adviser to the Free Enterprise Action Fund, has sent a letter to Immelt asking:....

Increasing the Global Transportation Fuel Supply

Despite soaring oil prices, oil and gas producers worldwide have failed to expand either supply or investment levels, falling short of meeting the rapidly growing global demand. The key challenge is ensuring an adequate supply of transportation fuel for cars and airplanes--not electricity, which can be generated from coal and nuclear reactors. The war on terrorism and operations in Iraq and Afghanistan, as well as high rates of economic growth in China and the United States have caused additional gasoline and jet fuel shortages that have led to higher prices. Fuel costs represent an indirect tax that may seriously affect the economy, possibly even causing a global recession. Furthermore, leading industry experts believe that the global oil well is running dry. Even if this is not the case, developing the remaining supply poses problems that continue to confound the industry. Insufficient Infrastructure. Currently, supply is limited by insufficient transportation and refining capacity. No new refineries have been built in the U.S. in the past three decades. In addition, world spare tanker capacity, which is essential to transport oil from overseas, no longer exists, and excess refinery capacity is at an all-time low. Overregulation. While many oil fields are headed for depletion, national oil companies control 58 percent of oil and natural gas reserves. Laws requiring the government to own and/or control significant shares in oil ventures are common in many oil-producing countries. Overregulation prevents oil companies from owning mineral rights, while weak rule of law and insufficient protection of property rights in many oil-rich regions makes multibillion-dollar investments too risky....


ECO-IMPERIALISM AND THE DRIVE TO DESTROY THE FREE MARKET

Max Keiser is a new kind of terrorist. He uses the Internet and boycotts to manipulate stock prices. In that way he forces corporations to comply with his brand of radical environmentalism and Sustainable Development. He puts his hands around corporate throats and squeezes until they comply with his demands. Max Keiser and his ilk hate business and they hate free enterprise and are using these tactics to redistribute wealth and cause chaos in the market place. Keiser’s operation is called “KarmaBanque.” That new age-focused name alone should give readers an idea of the wacky worldview that spews from Keiser’s brain. But his brand of activism is much more sinister. He calls himself a financial anarchist and he and his partner, Stacy Herbert, consider themselves the “Bonnie and Clyde of the Internet.” In their own words, “KarmaBanque is at the center of a new activist movement which combines the civil disobedience of Gandhi with the financial savvy of George Soros to help change the economic and political landscape of the world!” Says Keiser’s web page, “Karmabanque describes its audience as ‘Activists, Anarchists, and Hedge Funds.’ It’s a stock exchange of sorts, but with a brilliant and maniacal twist: it trades on the strength of boycotts.” To put it in the simplest possible terms, Keiser targets companies that are vulnerable to boycotts, such as Coca Cola, which relies heavily on daily consumer buying. Once the boycott has begun, Keiser tells his minions to buy options on the targeted company’s stock -- options betting that the stock price will go down. As the boycott drags down the company’s stock, Keiser and his followers make a quick buck on the options. Meanwhile, the company, aware of what has happened to it, tries to strike a deal with Keiser to get the boycott stopped. The deal? Corporate Social Responsibility (CSR). That is a euphemism for Sustainable Development. In other words, corporations are blackmailed into using its profits to promote the Kyoto Global Warming Treaty, for example. Such tactics have been used to stop banks from financing development in Third World countries, because for these poor people to acquire luxuries such as electricity and clean water is, in the minds of Max Keiser and his gang, “unsustainable” and must be stopped....

PETA Rent-A-Protester

Finding zany news about People for the Ethical Treatment of Animals is often like shooting fish in a barrel. "Feeling a little low on cash?" wrote PETA in a recent email recruiting activists to protest Ringling Bros. Circus in Chicago, "PETA's here to help." According to the Chicago Sun-Times, PETA is so hard up for true believers that it is now paying people -- to the tune of ten dollars a pop -- to protest for the self-appointed "complete press sluts." And yesterday Rome's city council gutted common sense when it caved to pressure from PETA and banned goldfish bowls. The council swallowed the PETA piranhas' propaganda hook, line, and sinker -- citing trauma to animals about as smart as ... goldfish. To paraphrase feminist pioneer Gloria Steinem (who was, herself, paraphrasing someone else): Rome's animal lovers need this ban like a fish needs a bicycle. And we're left asking, doesn't Rome have bigger fish to fry?

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