The Church of Kharma Futures

The Rev's views on politics, events,faith, and the world. All content copyright Church of Kharma Future 2007-2015 All rights Reserved

What’s the motive here?

Posted by revkharma on May 4, 2008

Recently we have heard calls for the federal government to remove the gasoline tax during the summer months to help consumers. That led to several different takes. Senator Obama spoke about the small amount, ” only $28.00″, he said. Not to be outdone, Sen Clinton issued a call. She demands that the taxes be removed from the consumer and that they be taken from the ‘obscene profits made by the oil companies”. If you believe what they’re pitching,the level of economic ignorance here is staggering.

Let’s look at some facts. The media routinely now report the quarterly profits of the “Big Oil companies” accompanied by statements such as “record profits” for the oil giants. What are the numbers reported? The total dollar profits made in the most recent quarter. What comprises those profits? The net monies taken in by the companies after all their expenses are paid. The government, of course takes taxes from all those obscene profits.

Now, what can cause increased profits? There are innumerable ways to do that. In the case we’re looking at here, the main reason for such increased profits is simply that more oil is being purchased around the world. China and India have begun to expand economically and are using vast quantities of oil. If there was not such a demand, there would be no way to sell such quantities of oil.

If you search around, it is not difficult to find some numbers regarding the profit made per gallon of gasoline. depending on when the figures were published, and which company is reporting, there seems to be somewhere between 4 and 8 cents per gallon. Let’s look at another figure: How much is the federal gasoline tax? Currently, the federal tax on gasoline is 18.4cents per gallon. So the US government actually makes more than twice the money per gallon than the oil companies themselves earn. Yet, I never have heard Senator Clinton discussing the “Obscene taxes” being taken from gasoline sales by the government, have you? Keep in mind, if more tax is levied against the oil companies, they will simply increase the cost of gasoline to recoup it. The consumer will continue to pay, it will just be embedded in the price, instead of posted at the pump.

Now, another area to consider:When the media report these obscene profits earned by big oil, just what numbers are they discussing. Usually ( almost uniformly) they are reporting on total dollars earned. The figure that is more pertinent would be profit margin not just dollars. A fast comparison will reveal that on average, US industrial companies earn somewhere in the neighborhood of 7% to 8% net profit. The most recent figures reported for the oil industry show a net profit of around 7.5%. Somehow that doesn’t seem obscene to me. The Banking industry earns significantly more. Citigroup, for example earns 15.7% profit on their money.In fact, if you look at profit margin, Exxon ranks somewhere below the top 100 earners on the fortune 500 list of major companies. Still seem “obscene”? The politicians who scream about this count on the economic illiteracy of the American electorate. They use such incendiary terms as ‘Obscene Profits” to foment anger and drum up support for more intervention by the federal government in the market place. Listen to Sen Charles Schumer, another senator from NY had this to say on the floor of the senate:

“If you factor out the highest 10% in income the remaining 90% of Americans are clearly

experiencing a recession.”

That is one of the most economically ignorant statements I have ever read. Whatever your current financial situation, economists use terms for specific reasons. “Recession” is a term with specific definitions and is applied to an entire economy. Is at best ignorant or,more likely, dishonest to try to apply it to sections of the income spectrum. Only one purpose is served by statements such as that. It is a blatant attempt to foment envy and stir up class enmity. The socialist leaning members of our government are pushing to incite class hatred. They use such incendiary terms as ‘Obscene Profits” to foment anger and drum up support for more intervention by the federal government in the market place. That,truly, is the ultimate goal. By whipping up anger, using distorted or sometimes false figures, the powerful forces in government are attempting to scare voters into giving them more and more power to control ever larger swaths of the economy, and ultimately their lives.

As more and more people are under-and mis-educated by government run school systems, they simply are not provided the tools necessary to see the distortion and outright lies they are being told by their ‘representatives’ in Washington. Thus the socialists, statist, facists( whichever term you prefer) are able to lie to their constituents, and continue to enlarge their own powers. One startling statistic, which shows the extent to which Americans have become dependent on the government: According to the US bureau of labor statistics, the largest employer in the USA is the federal government, with more than 1.8 million civilians. This doesn’t include the postal service, nor the military! That’s an astounding fact. There is no more convincing argument than that to show our government is too large and too out of control!

This theme, where in the government accumulates more and more power by denouncing those who work and provide the economic engine which drives the country, much of it was foretold years ago. One question may bring the ideas to mind: “Who is John Galt?”

At the time that Atlas Shrugged was written, government was much smaller, and Americans still (at least most of us) believed in the ideals of rewarding individual achievement, rather than condemning it. In our era it seems that anyone who manages to succeed is demonized as becoming a member of the “evil rich’. The mildest slander is that they are described as having ‘won life’s lottery”. As if the effort of years working at a business or enterprise was merely something to do while waiting for magic money to rain down from the sky.

If you have not yet read it, I suggest you take some time, turn off the TV, and get and read a copy of Atlas Shrugged. Written more than fifty years ago, it is now even more on point.

As always—-

Keep the Faith!

The Rev.

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2 Responses to “What’s the motive here?”

  1. I came across your blog on Technorati. Nice site layout. I will stop by and read more soon.

    Mike Harmon

  2. elmo76544 said

    Yeah the dems love to bash “evil” oil companies for being greedy. It’s their usual Modus Operandi. But as pointed out in Atlas Shrugged, what would those same people do if the industrialists refused to be raped by the government any more?

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