Thanks partly to factors beyond their control — e.g., the Iran war — oil companies are raking in the dough. Chevron and Shell, for example, just reported record and near-record quarterly profits, respectively. When some idiot reporter (looking to spark controversy and add to his C.V., no doubt) asked President Trump about this at a White House event, he expressed concern, saying they’re making “too much money,” and that, “I don’t like it.”
Read more Mamdani should talk to Cubans about bodegas
Actually, a free-market capitalist may indeed like it! While I admit it gives the Dem commies another talking point as gas prices remain elevated, one must be careful about imposing artificial constraints on the (mostly) free market — there is no evidence that the major oil companies are currently gouging. In fact, market forces are determining the price of gas, diesel, and related products. These forces are time-asymmetric, meaning it takes time for reduced oil prices to translate into lower prices at the pump.
What is the alternative to allowing our companies to thrive in a boom cycle — a windfall tax? That’s what Democrats are proposing, so common sense immediately requires suspending disbelief. Indeed, when the Euro-peons inflicted a windfall tax, it actually penalized businesses. The CEO of ExxonMobil, for example, stated that “We canceled investments that we had planned for Europe based on the last time they passed a windfall profits tax.”
A windfall oil tax was imposed on oil companies in the U.S. in 1980 — it wasn’t successful, either.
This is not the time to penalize energy production. Instead, the Dems should reconsider their exorbitant clean energy taxes. The average price of gas and diesel in Democratic mismanaged jurisdictions is artificially high. If anyone is engaging in gouging, it is the discredited Greenies.
Read more What would a civil war with the Left look like?
Companies are frequently subjected to exogenous forces — for better and worse — that aren’t directly related to their innovation or operational performance. Good for them! “Luck” seems to knock on the door of those best prepared. There are bust cycles, but when business booms they should not be subjected to penalizing windfall taxes concocted by socialist redistribution agents.
That Bark Hussein Obummer character once mused over the question of when someone has made enough money. Absent price gouging or operations and products that violate safety, security, and health rules, the answer is very rarely. Nowadays, Dems like Bernie and his gang don’t even need to muse. Even though they’ve never had a proper job or had to meet payroll, they already know — and the threshold is continually lowered.
Threatening accusations about oil companies making too much money is fraught with socialistic ramifications, potentially providing justification for a windfall tax, which can have negative impacts on industry dynamics.
No, the oil companies aren’t making too much money. But hey, if they leak or otherwise ruin our pristine locales, then they will pay a hefty price, as British Petroleum discovered with the Deepwater Horizon oil spill.Image:
Read more The return of fiscal QE
Image: Pixabay