| Politics

Cross Purposes

by Robert Capozzi

Bridging on Kevin Rollins point here about Obama's windfall profits tax notion, it gets worse. If the government taxes "Big Oil," or anyone, more, what happens? We'll get less oil, as the more marginal projects that are currently profitable will be scaled back or canceled.

With less oil, what happens? Hmm, if supply goes down and demand remains the same, I suspect all economists would easily predict prices will go UP! The end result is consumers still get squeezed. Government takes in more revenues. And oil shareholders lose return dollars, although profit RATES may remain the same, depending on the quality of management.

It gets worse. Most oil companies are conducting R&D projects, some for alternative energy, others to make fossil fuels more efficient and less polluting. The putatively Green Obama's windfall profits tax is at cross purposes with his desire to go green.

So, on the one hand, Obama correctly calls McCain gas tax holiday a "gimmick." But then he trots out his own gimmick.

A 'course, McCain -- alleged expert in foreign affairs -- is prone to all sorts of ham-handed, garbled thinking, such as confusing Shia and Sunni. And then there's the emotional instability....

Politicians are often criticized for breaking campaign "promises," as if the individual pol has control of collective outcomes. They of course don't, so making promises is itself a grandiose, futile effort. All they can do is promise to propose X or Y policy.

Still, this is one campaign promise we can only hope that President Obama will break. There is much to criticize about in the energy and environment areas, but mostly it's about convoluted, contradictory, counter-productive government policy. Gas prices are high mostly because of bad policy, starting first and foremost with the Iraq War, and torqued up by anti-Iran saber rattling.

All indications are that McCain has spun off into Grand Geopolitical Construct World, one that rationalizes warring for speculative greater goods. And Obama seems -- still -- to not understand the flow of economic give and take. Squeeze the balloon here, the balloon expands elsewhere.

If one of these gents is elected, we can only hope that their hidden agendas will be squelched by wiser staff.

-RC