Wednesday, April 09, 2008

Witch Hunt

From a recent article in the Detroit Free Press
Top executives of the five biggest U.S. oil companies were pressed today to explain the soaring fuel prices amid huge industry profits and why they weren’t investing more to develop renewable energy source such as wind and solar.
“On April Fool’s Day, the biggest joke of all is being played on American families by Big Oil,” Rep. Edward Markey, D-Mass., said as his committee began hearing from the oil company executives.

With motorists paying a national average of $3.29 a gallon at the pump and global oil prices remaining above $100 a barrel, the executives were hard pressed by lawmakers to defend their profits.

“The anger level is rising significantly,” said Rep. Emanuel Cleaver, D-Mo., relating what he had heard in his district during the recent two-week congressional recess.
“I heard what you are hearing. Americans are very worried about the rising price of energy,” said John Hofmeister, president of Shell Oil Co., echoing remarks by the other four executives from Exxon Mobil Corp., BP America Inc., Chevron Corp., and ConocoPhillips.

But the executives rejected claims that their companies’ earnings are out of step with other industries and said that while they earn tens of billions of dollars, they also invest tens of billions in exploration and oil production activities.

“Our earnings, though high in absolute terms, need to be viewed in the context of the scale and cyclical, long-term nature of our industry as well as the huge investment requirements,” said J.S. Simon, Exxon Mobil’s senior vice president.
and remember
The prices are of concern, Hofmeister said at the time, adding a note of optimism: “Our industry is extremely cyclical and what goes up almost always comes down,” he told the skeptical senators on a day when oil cost $60 a barrel.

About six months later, when the cost of the same barrel reached $75, the executives were grilled again on Capitol Hill on their spending and investment priorities.
There have been no charges of wrong doing, no allegations of wrong doing, no suspicion of wrong doing, yet oil company executives are once again being hauled in front of Congress to be publicly humiliated in order to mollify the anger of the American public. What did they do that was so wrong? Oh yeah, they earned a lot of money. They did it honestly, but according to Congress and other witch hunters, they've earned too much. It's not fair. The oil companies must be punished for earning too much money by providing the product that keeps the world's economy afloat.

Due to rules passed by Congress, at the behest of their environmentalist friends, no oil company has been able to build a new refinery in the United States in almost thirty years. Oil has to be refined so some of our oil has to be refined outside of the U.S. Many areas in the U.S. with proven oil reserves are off limits to drilling thereby increasing our demand for foreign oil. All of this drives up the cost of oil, which leads to increased profits for the oil industry. Which causes the idiots in Congress to add insult to injury by scapegoating the oil industry and putting on glorious show trials in order to escape their responsibility for forcing the sickening, wallet-busting rise in oil prices.

Isn't this the exact tactic used by communist dictatorships throughout the last century in order to avoid blame for their own destructive economic policies? Blame the "kulaks" and other enemies of the people. It's a good bet that right now, government lawyers are looking for any kind of law or rule that they can twist to accuse oil executives of some kind of "crime against the people." Rather than cheer on this kind of sick charade, we the people should be up in arms that Congress can publicly abuse American citizens. We accept this because the oil executives like tobacco executives before them, are very wealthy, and throughout history the wealthy have garnered the jealousy of the middle class and poor. We are still trained today to hate the rich. We are supposed to enjoy seeing the rich and powerful knocked down a few notches, whether it's done honestly or not.

My advice is: don't gloat about the oil executives being dragged through the congressional mud. It begins with the rich, who are easy to scapegoat, but as we've seen Russia, China, N. Korea, Venezuela, and other "people's republics" eventually this kind of harassment works its way down to you and me and we are much worse off for it. And even if it doesn't go that far, punitive measures aimed at oil companies will reduce the gasoline supplies and raise costs for us all. We saw that under President Carter.

But as always, Thomas Sowell knows best.

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At 12:18 PM, Blogger Ma Kettle said...

Ok I am sick and tired of this obscene requirement for the CEO's salary to be justified.

I would absolutely pay big bucks for big returns. And because the oil companies have a product(not unlike toilet paper) that we all then becomes a marketing, business strategy...and those who do well should be paid well.

As to huge profits check out this link on Wizbang about Planned Parenthood and Oil Companies.

At 12:20 PM, Blogger Ma Kettle said...

I did not know how to leave a link in the comments...forgive me...and maybe you know and can tell me?!!

At 1:01 PM, Anonymous Anonymous said...

Well, I do think they are paid a *bit* too much, but so are professional athletes. Not that I'm comparing the two. I also think that the CEO's of most of the big financial institutions are paid too much...but that's another story.

Pelosi has suggested that big oil stop paying dividends to it's we want to punish hardworking Americans for investing hard-earned money?

At 10:19 PM, Blogger Harry said...

Ma Kettle,
That's OK, I was able to go to the link. He's absolutely right. And of course, Thomas Sowell has made the point repeatedly. As for Planned Parenthood, if you want get even more displeased, according to Michelle Malkin at this link: one third of their operating budget, over three hundred million dollars comes is subsidized by the government using our tax dollars.

I used to get angry at the huge salaries until I started to wonder if it was just envy on my part. I'd like to work one year and get 20 million dollars. Then I could easily retire. I know that Pelosi and the Democrats want us to be angry at the rich (except for rich congressional Democrats) so that we will welcome their wealth distribution schemes. Those tactics have worked so well in the communist utopias of the 20th century, we know they'll work equally well here and now.

When progressives see a rich person and a poor person, their immediate assumption is that the rich person exploited the poor person. Hard work never seems to be an option.


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