Saturday, August 02, 2008

Talk sense about oil and energy (tax) policy; don't divide the voters, please


Today, in a replay of the weekend’s appearances for both candidates, Obama was repeated shown proposing windfall profit’s taxes on oil companies, particularly ExxonMobil, and giving the money to “working families.”

It’s dangerous when a candidate targets one specific party (the “enemy”) or one company, whose shareholders may include many retirees on incomes that would remain fixed without investment returns (hopefully rewarding farsighted investment decisions of the past – energy would always go up). It sounds like the old leftist morality play where you expropriate the wealth of one party and give it to someone more “deserving” – playing Robin Hood – in some kind of political exercise that aims toward moral “purification”. We heard this before with the supposed gas tax holiday, that fizzled.

There’s some debate about what ExxonMobil’s profits mean. The record earnings disappointed analysts, and XOM’s stock price fell below $80 Friday. There is legitimate criticism of stock buybacks, perhaps.

The morally proper policy response is not to play robin hood, but to expect XOM and other oil companies to invest in new drilling and in greener energy sources, and reinvent themselves. According to some media sources, Obama today (Saturday) reportedly began to sound more open to the possibility of some offshore drilling, under pressure from McCain (apparently with no teleprompter), who supports energetic efforts to produce more domestic oil and gas. McCain correctly points out that Gulf of Mexico rigs survived Katrina intact with no spills, and that new magnetic resonance technology makes offshore drilling safer and more productive. Remember, there is a complication in that domestically owned oil companies, however large, do not own more than a fraction of the earth’s oil reserves; potentially hostile governments overseas own far too much.

The fact is, we have to do everything. We need to produce more oil and other fuels, and we need to increase our use of renewable sources.

There is a lot of talk recently about cabals, about the pricing of oil in dollars, of the manipulation by “economic hit men”. Some of this does sift down to a call for changes in personal values, for more service, more interconnectedness, more cooperation, and less personal autonomy which we have come to see as synonymous with freedom. In the post earlier today, I summarized another call for national service, that heads in that direction.

If we are to maintain our way of life, we have to remain productive and innovative enough to do so.

Update: August 4

Sean Lengell of The Washington Times reports "GOP: Lift drilling ban or risk shutdown", referring to a possible government shutdown, link here.

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