The WSJ today tackles Obama’s latest dredging up of the "windfall" profits on big oil – a politically-motivated move designed to win votes from economically illiterate dupes believing that oil companies should be "punished" for high gas prices. Unfortunately, the Obamessiah, in all of his omniscience, can’t muster up a concise definition of what constitutes a "windfall":
"What is a "windfall" profit anyway? How does it differ from your everyday, run of the mill profit? Is it some absolute number, a matter of return on equity or sales — or does it merely depend on who earns it?
Enquiring entrepreneurs want to know. Unfortunately, Mr. Obama’s "emergency" plan, announced on Friday, doesn’t offer any clarity. To pay for "stimulus" checks of $1,000 for families and $500 for individuals, the Senator says government would take "a reasonable share" of oil company profits
Mr. Obama didn’t bother to define "reasonable," and neither did Dick Durbin, the second-ranking Senate Democrat, when he recently declared that "The oil companies need to know that there is a limit on how much profit they can take in this economy." Really? This extraordinary redefinition of free-market success could use some parsing."
Of course, Obama never bothers to reveal this inconvenient little tidbit:
"Yet if its profits are at record highs, its tax bills are already at record highs too. Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion. That sounds like a government windfall to us, but perhaps we’re missing some Obama-Durbin business subtlety."
This silly election-season demagoguery makes Obama look like a run of the mill populist – ignoring economic realities to appeal to the lowest common denominator in order to win a few votes. Does that represent ‘change’ or business as usual?
The WSJ article concludes nicely:
"The point is that what constitutes an abnormal profit is entirely arbitrary. It is in the eye of the political beholder, who is usually looking to soak some unpopular business. In other words, a windfall is nothing more than a profit earned by a business that some politician dislikes. And a tax on that profit is merely a form of politically motivated expropriation.
It’s what politicians do in Venezuela, not in a free country."