Just to follow up on Justin’s commentary …
Yesterday morning, after a heated struggle in the Senate, a bill that would have implemented a windfall tax on major oil companies was defeated. In typical fashion, oil companies were singled out for their "excess profit" by senators who are simply pandering to their constituents. In this time of economic trouble, it is not surprising that politicians are trying to deflect the spotlight from themselves and their failed policies onto the big oil companies by insinuating that they are doing something wrong by acting in a completely legal, free-market way. In no other profession is there such scrutiny for making a profit ?— in fact, we are generally encouraged to work hard and succeed. Isn’t that part of the American dream?
Also, our economy thrives when profits are up and people are working. However, it appears this is not encouraged when companies become increasingly wealthy. Rather than trying to stifle the profits of oil companies, as though it were some sort of deserved punishment, politicians (from both sides) should be focused on lowering gas prices and promoting energy alternatives. Even if a windfall tax were to be enacted, it likely would be counterproductive, with oil companies only increasing the price for consumers, to make up for the lost profits (Justin’s post is much more thorough on this economics aspect).
It really befuddles me that some members of Congress think that limiting profits for certain corporations is a good thing. If Congress wants a windfall tax for the oil industry, who’s next? My bet is on you, Warren Buffet. Perhaps some some comments by our neighbor to the east, Sen. Richard Durbin, are what really have me interested in this topic:
The oil companies need to know that there is a limit on how much profit they can take in this economy.
I didn’t realize that it was up to Senator Durbin to determine how much profit is too much. In a free-market economy, market forces will dictate when a consumer is no longer willing to spend. Can you imagine if Sen. Durbin were to say this to an average American family? There would be complete anarchy. If Durbin were to take this approach with the citizens in his state, I have a feeling he wouldn’t be reelected anytime soon. Thankfully, the bill didn’t pass and no one is going to be punished for doing something every American strives for: success.
To link this story back to Missouri (after all, we are Missouri-focused), as Justin pointed out, one of our state’s senators voted in favor of the windfall tax, but at least wasn’t quoted saying such outlandish things.