The news on Halloween said that President Biden warned oil firms that he was going to tax their windfall profits. He also said that he was going to enroll in a business program at the nearest Junior College. Just kidding about the last one. I doubt he could even get into a junior college.
I am not sure where to begin. First, as I recall, it is Congress that has the power to tax. But you never know. A president can find ways to do things. Second, aren't oil companies like most other companies in the sense that they pay profits taxes. Joe, they already pay profits taxes. The word "windfall" is supposed to make us think that the profits are not of the ordinary kind. So regular profit taxes are not enough for Joe. He wants even more. Hmmm. How high should taxes be? Are they really so low? If it's bad for companies to make larger profits then is it good for Joe to skim them off? If it goes to Joe is it okay?
Wow. This gets better and better. Joe says these oil firms are taking advantage of us. The price of oil is extraordinarily high and so the firms get profits they don't deserve. Somehow, in the current global economic environment the oil firms are supposed to ignore supply and demand. Let's face it, if there was not a large excess demand for oil, the price would not rise so much. But there is a huge excess demand for oil. My econ textbook taught me that the role of excess demand and higher prices is to signal the need for producers to bring more supply to market. It seems like more supply in the market would help cool the price. Supply does not come magically. Firms typically produce more output as a way to make higher profits. Should these companies be "good citizens" and bring more output to market at lower prices that damage their existence?
Which brings in Joe again. It seems to me that inflation is historically high these days. It seems to be historically high on Joe's watch. And he is not innocent. As I recall it was Joe and his merry band of Congressmen who lit the powder keg of government spending that caused the excess demand and a much higher inflation rate. Oil schmoil. The price of everything is rising thanks to their fiscal policies. If you want to find the culprit for higher inflation look into the mirror Joe.
But Joe is like a lot of politicians. He wants to blame the other guys and he wants to ride in on his bucking bronco and save the planet. Isn't it sad how politicians sometimes love to blame us. Us sometimes want higher wages. Us sometimes don't hire enough workers. Us sometimes make the wrong products. Us sometimes want to charge higher prices. Us is bad.
Joe, you ran as a regular guy. One of the people. Sadly you are just another politician with more finger pointing and few real answers. You make us look like selfish bad guys. I don't think that's the case. As always, we respond to incentives. Why don't you think more about the incentives you create?
Dear LSD. The feckless Biden administration is like chlamydia – a gift that keepz on giv’n – until therz an anecdote. Before the ’20 election it wuz unimaginable that one person could FUBAR a country so much so quickly. Fortunately, there appearz to be an anecdote on the horizon. Keep yer fingerz (‘n eyez) cross’d for Nov. 8.
ReplyDeleteFingers (and toes) crossed.
DeleteI noticed in a WSJ article last week that the price of firewood has gone up. You know, basic econ, price for one good goes up and that leads to increased demand for another good whose price also goes up. Question to Joe, will tree farmers have to pay a windfall profits tax on the higher price of firewood.
ReplyDeleteNice one Jerro. I suspect we all know the answer to your question. Not enough political points for Joe from people with fireplaces. Where is the fireplace lobby when we need it? :-)
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