Normally, I don't bother to read George Will,..........for several reasons. First, there are simply too many articles to be read on a daily basis, and I simply cannot get everyone in as I would like. Second, Not only do I enjoy a writer, who uses logic, but also employs passion and witt as well. Unfortunately, George Will is about as passionate and witty as a Three Toed Sloth.

And Third, Anyone who can sit on the ABC set, Sunday after Sunday, watching the parade of Lefties go through the revolving doors, while less and less viewers watch the charade, and yet NEVER go Postal, has either a serious flaw, or is a zombee.

So it was refreshing to hear about this article, while traveling back to North Carolina today. When I arrived home, I made a point of reading it, and I have not been dissappointed in the least.

Those who have followed my interest in energy, price gouging, and economics, will also enjoy this one as well.

BTY, those Locrians had a great way of preventing the runaway growth of laws and government into their lives. My kind of folks. Perhaps we should consider resurrecting this rule once again, right here in this country. I recommend that we start with the good Senator Dorgan, and use him as a wonderful example.

Enjoy.

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Windfall for the Dimwitted
By George Will

"A Locrian who proposed any new law stood forth in the assembly of the people with a cord round his neck, and if the law was rejected, the innovator was instantly strangled.''

- Edward Gibbon, ``The History of the Decline and Fall of the Roman Empire''


WASHINGTON -- If Congress had the rule of the Locrians, a people in ancient Greece, it would have been fatal to Sen. Byron Dorgan, the North Dakota Democrat. He recently got 34 colleagues, none of them Republicans, to vote for his measure to punish oil companies for earning profits which, relative to revenues, were unimpressive.

Dorgan's measure also would have inflicted collateral damage on everyone who buys petroleum products, and would have injured millions of Americans -- many of them currently inciting Congress to smite the oil companies -- who do not know that they own oil stocks. Herewith an after-action analysis of a battle that has been fought before and will be again.

``None of us know much about what is happening with respect to pricing,'' said Dorgan, disclaiming a competence rarely ascribed to senators. But, quickly recovering from uncharacteristic humility, Dorgan joined Senate colleagues in exhibitionistic indignation about the fact that the five largest oil companies, led by ExxonMobil's $9.9 billion, had combined third-quarter profits of $32.8 billion.

ExxonMobil, which has more than $50 billion of past profits invested in energy development projects, made 9.8 cents per dollar of sales, much less than the 21.2 cents made by a company selling another fluid that lubricates American life -- Coca-Cola. Nevertheless, another Midwestern populist, Sen. Charles Grassley, the increasingly eccentric Iowa Republican who chairs the Finance Committee, admonished the oil companies to contribute 10 percent of their third-quarter profits to augment existing federal subsidies that help some Americans pay their heating bills. Many of those Americans live in the chilly Northeast and vote for liberals who, in Congress, write this narrative:

By blocking much drilling in Alaska and offshore, Congress does nothing to improve the price of oil. Then Congress spends taxpayer dollars to soften the impact of the price, thereby encouraging consumption that raises the price. Then Grassley asks oil executives to join the moral grandstanding by squandering their shareholders' wealth -- diverting it to protect oil consumers from some consequences of their representatives' irrationality.

The Senate, having flirted with this loopy idea of oil companies tithing themselves, then contemplated a worse idea -- Dorgan's ``windfall profits'' tax. A ``windfall profit'' is a technical term denoting a profit made by someone else. Americans do not say there was anything windfall-like about this year's $2.5 trillion increase in the value of their houses.

This year the six largest oil companies will disperse 34 percent of their cash flow -- $31 billion -- in dividends to shareholders. But such flows can be shrunk by ``windfall profit'' taxes. That is explained, with a clarity sufficient even for the dimmest 35 senators, in a study -- ``The Economic Impact of a Windfall Profits Tax for Savers and Shareholders'' -- by Robert J. Shapiro, former undersecretary of commerce in the Clinton administration, and Nam D. Pham, an economist.

Although the real rationale for a windfall profits tax is to allow legislators to strike a histrionic pose, Dorgan's tax, say Shapiro and Pham, would have produced gross revenues -- depending on where the price of oil is in the range between $45 and $60 a barrel -- of $18.5 billion to $104.9 billion over five years. But because the windfall profits tax payments would have reduced corporate income tax payments, the government's net, say Shapiro and Pham, would have been only $8.6 billion to $48.7 billion.

They calculate that 41 percent of oil company stocks are owned by pension plans and individuals' retirement accounts. Hence much of the tax's burden would have fallen on current and future retirees, reducing both the market value of, and dividends paid by, those stocks. The cost to all the oil companies' shareholders, in forgone stock appreciation and dividends, would have ranged -- depending on oil prices and inflation -- from $21.3 billion to $121.8 billion per year.

Furthermore, Shapiro and Pham conclude that the windfall profits tax would have discouraged domestic oil production and increased U.S. dependence on imports from the Persian Gulf. And from Venezuela, thereby funding the left-wing fascism of Hugo Chavez.

Because the average price of a gallon of gasoline has swiftly plunged from the post-Katrina high of $3.07 to $2.15 (compared to $185.60 for a gallon of Starbucks espresso), the recurring populist fever that always follows oil price spikes has broken. It will be back. Too bad the Locrians' rule will not be.

John, I commend you for making it throuh this Will piece. I gave up n him a long time ago. He reads like chemistry textbook. The man needs a personality transplant. But by skimming I guess the gist is if you f*** with the economic absolute of "supply and demand" you create situations much worse then the problem you were trying to solve in the first place. Course thats what the libbys want. So they can be the hero and fix these problems, or at least cast the blame elsewhere.

In my entire life, I have NEVER understood what it is that makes the Left so G-dDamned stupid, when it comes to anything having to do with basic economics. It is almost like "fantasy is reality" in their own little world.

And the Law of Unintended Consequences? What's that? As Will states, the very people that these Certified Jackasses would seek to help are the very people that they would be harming. Is it really stupidity, or is it simply hubris and grandstanding for their monumental ego? I suspect that it is a combination of all the above.

Here is another thing: do the staffers of these colossally dimwitted Jackasses have the intelligence or intestinal fortitude to tell them when they are making such fools of themselves, and WHY they are doing so?

And another thing: does the economically incompetant Bill O'Reilly also have a staff, who are willing to tell him something that he does not wish to hear?

The list of "Useful Idiots" is endless. Only a vastly improved education system will have any hope of helping out future generations. Let's hope that we can survive until that happens.

BTY, are you reading this thread Grizzly? And if you have breezed through it in your usual manner, have you learned anything of significance from it with regards to knowledge, and the intellectual prowess of your jackass Party?

G-D, if ever there was a word that best describes a political party, this is it!

And speaking of Windfall Profits, I will be willing to bet you that this little lady Jackass was one of the 35, who voted along with "Turbin" Durbin, to promote a Windfall Profit's Tax on the Oil Companys.

Read this little article by one of my favorites, James K Glassman, and find out why she should be explaining her Windfall Profit as well.

Can you Spell "Hypocritus Maximus"? Thank G-d for the New Media, and their ability to expose the truth to the public, so these idiots, Jackasses, and hypocrites, and others, can be seen for what they really are.

The Senator From Windfall
By James K. Glassman

Of all the politicians complaining about the profits and practices of America's wicked oil companies, few can top Sen. Maria Cantwell (D-Wash.).

Among her latest ventures is a demand that the oil company executives who testified Nov. 9 be brought back to the Senate, this time under oath. In a letter to the chairmen of the two committees that held the hearings, she claimed that the CEOs "failed to answer the simple questions asked of them. This is unacceptable. If we're going to get to the bottom of high gas prices, we need complete answers that Americans can trust."



Of course, "getting to the bottom" of price rises isn't difficult. Energy exists in a global commodity market. Demand is rising from China and India, as economic growth brings a better life to more than two billion people, and supply has been constrained by OPEC, Hurricanes Katrina and Rita and absurd policies that restrict domestic drilling and the construction and expansion of pipelines and other energy infrastructure.



Cantwell has opposed such supply-boosting policies in the United States, lately blocking measures that would have benefited her own state while increasing tanker traffic in Puget Sound.



Another sure way to reduce supply is to pass laws to stop "price-gouging" in fuel costs -- legislation such as Cantwell herself has introduced -- or to exact special "windfall" taxes on a few large energy companies. Windfall taxes have been tried before, in the early 1980s, and, according to a Congressional Research Service study, they had a predictable effect. The taxes cut production by U.S. energy companies and increased our reliance on foreign oil. So much for "Energy Independence 2020," the Democrats' organization that Cantwell chairs.



Cantwell voted "yes" on Nov. 17 to an amendment (No. 2626) that would have imposed "a temporary windfall profits tax on crude oil." The amendment failed, but the irony lingers because, as it turns out, Maria Cantwell's life story has revolved around her own windfall profits.



Back in 1992, when I was editor of the congressional newspaper Roll Call, a young woman from Indianapolis named Maria Cantwell, who had spent her life working on campaigns (at age 24 she was out helping Jerry Springer run for governor of Ohio) and serving in government, won a U.S. House seat from a Seattle district.



At the time, according to the Associated Press, Cantwell earned $33,789 in the year before she came to Congress, and she had a net worth under $15,000.



The House provided her with a $10,000 raise, but, alas, she was washed away in the Republican tsunami of 1994. She emerged from Congress practically broke, but, luckily, with some nice friends.



One of them, Rob Glaser, a former Microsoft employee, "recruited the out-of-work politician for his new company, Real Networks," according to The Industry Standard.



These were the lovely days when many high-tech firms were handing out stock options like crazy, and Glaser showered them on Maria Cantwell. A few years later, her Real Networks shares were worth, according to a definitive 2001 article in the Seattle Weekly, "roughly $80 million."



She was rich -- so rich that she could run for Senate, in a great Democratic tradition followed that same year by Sens. Mark Dayton (D-Minn.), the department store heir, and Jon Corzine (D-N.J.), former CEO of Goldman Sachs.



She used $9.2 million of her own money in the campaign, according to the Seattle Post-Intelligencer. About $6 million came from stock sales and the rest from loans using her stock as collateral.



Cantwell's Senate seat itself is a windfall profit. Without the lucky timing of her plunge into Real Networks, it's unlikely she would be a member of the world's most exclusive club today.



As fortune would have it, just as Cantwell started her Senate campaign, Real Networks was hitting a new high ($93 a share, adjusted for splits). By February 2001, after she was safely sworn in, the stock had fallen to $8, in which neighborhood it's pretty much been ever since (Friday's close was $8.89).



So, if Cantwell had run first in 2002 instead of 2000, she couldn't have mustered $9 million from her Real Networks stock to put into the campaign.



Maria Cantwell is truly the Senator From Windfall, but I wouldn't want to slap some kind of special tax on her just because she got a bit lucky -- like her colleague, Sen. Judd Gregg (R-N.H.), another backer of windfall profits, who won $853,000 in the Powerball lottery in October.



But let's contrast the windfalls of Cantwell and Gregg with the increased earnings of integrated oil and gas companies in the third quarter of 2005. Those firms use a big chunk of their profits each year to make huge long-term capital investments in the risky business of exploring for energy and producing it. (ExxonMobil's capital expenditures over the past 10 years have roughly equaled its reported earnings.) The price of oil, like that of any other commodity, bounces around, so some months oil companies make more from their upstream operations than others.



Are such profits a windfall? Of course not. They are the result of serious investment and research and development. But Senators like Cantwell and Gregg -- and others who should know better -- continue to try to exact special tribute from the same companies that are trying to boost America's energy supply.



The latest windfall profits tax proposals come in new guises -- a change in LIFO inventory rules and a limit on the foreign tax credit. But the effect would be the same as the WPT disaster of the 1980s: to cut supply and increase dependence on oil produced by non-U.S. companies, many owned by nations like Venezuela and Saudi Arabia.



That would be a windfall loss for the public.

The "Windfall Profits" Smear
By Alex Epstein
FrontPageMagazine.com | December 13, 2005

Politicians and pundits claim that oil companies' recent quarter of higher profits is mostly a "windfall"--which should be "given back" to society via a proposed $20 billion tax. As Representative Dennis Kucinich and others say, they seek "to tax only excess profits, leaving . . . reasonable profits unaffected." Such taxation is justified because the recent low supply and high demand that led to higher profits, explains economist Dean Baker, "is kind of [the oil companies'] good luck. They didn't do anything to earn it."

But America's oil companies have earned every penny of their profits. To characterize any portion of them as an unearned "windfall"--like manna dropped from heaven--is a vicious smear. It is to evade what is truly responsible for their profits this and every quarter: the great value they create and the tremendous thought, effort, and risk-taking that goes into creating it.

Virtually forgotten in the condemnation of oil profits is that the great--and growing--global demand for oil reflects its great value. Producers and consumers have been willing to pay $70 a barrel for oil because it is worth that much to us. Oil is used by us to get quickly from point A to point B by car, train, or jet. It is used by efficient factories overseas to produce the ever-cheaper goods we get at Wal-Mart. In the event of a natural disaster, it allows us to drive to a safer place or to generate power to begin a recovery.

The critics of oil profits take all the benefits of free-flowing oil for granted--with not a word of acknowledgement to those who sell it to them at agreeable prices. They treat oil production as an effortless, risk-less task that requires little more of oil executives than shuffling paper and watching their coffers fill up with mega-profits.

But the continuous mass-production of oil, under all economic conditions, is a tremendous achievement. Oil companies invest billions on new exploration projects. They construct skyscraper-high oil rigs to extract oil from the ocean floor. They develop new technologies like 3-D seismic surveys or new extraction methods to get hundreds of billions of barrels of oil from sand deposits in Canada.

And to profit, they must do all of these things efficiently, while assuming a great amount of risk: the uncertain nature of oil exploration and R&D; the need to deal with unstable foreign governments; the new and shifting government regulations on exploration and refining; the machinations of the OPEC cartel of dictatorships.

Critics emphasize the fact that the oil companies' profits this quarter are partially due to factors that they did not anticipate or control--such as the massive increase in demand from China and India. But every business venture involves factors that its leaders do not (and cannot) anticipate or control--factors that can affect it positively or negatively. These factors are part of the risk that businesses assume. Since they undertake the risk, they deserve any losses or rewards that result. In the 1990s, the oil companies had no right to a bailout when oil unexpectedly fell below $10 a barrel. Likewise, we now have no right to seize their profits when oil unexpectedly rises to over $70 a barrel.

To earn a profit does not mean to be fully responsible for every factor that went into it; it is to take the action necessary to create a product or service--to develop the skills, to invest the time, money, and effort--and to assume the risk that others will value one's product or service, and that one will not be driven out of business by a superior competitor, a new invention, etc.

This principle applies equally to employees as to business owners. Did the many former "nerds" who made hundreds of thousands at Microsoft and elsewhere not deserve their money--should they be forced to "give" it to society (i.e., to other people)--because they had no idea that cultivating programming skills would be so profitable? No--they chose to develop those skills, they staked their livelihoods on them, and their high salaries rightfully belong to them.

Given the value oil companies create and the effort and risk involved, to call their profits a "windfall" is an intellectual crime. A "windfall profits" tax would punish producers for working hard, taking risks, and succeeding. Nothing could be more un-American than that. Let us drop the "windfall" smear, and congratulate the oil industry for a job well-done.

*A General Statement on George Will's Population Theory*

Let us take Exxon/Mobil (at the time of writing this) for example. I can tell you just how many people I know own 100, or even 1000 shares of stock in this outfit (I mean we do wish to make a substantial profit, right?) -- stocks bought straight from the broker. Zero. (Now, concerning 401K or pension plans. In this set up, the funds usually will feed the horses that do work for the farmer, and let the others be eventually pushed out of the corral to feed on wild grasslands. And you do have the option of observing this activity daily and switching around the ones that are unproductive -- or at least I do!)

I must say that I love the way that George Will trys to convince us that the common Joe and Jane is getting beat up on this.

Now for these millions of people that own these shares of stocks. How many live next door to you or your relatives?

Perhaps you will be kind enough to give us the link to this site that shows us Will's General Statement on Population theory? Or is this something you made up to prove what you believe to be an important point here?

"Even more significantly, increasing numbers of Americans are becoming capitalists—people who own a share of productive businesses through stocks or mutual funds. About half of American households qualify as stockholding in some form. That's up from 32 percent in 1989 and only 19 percent in 1983, a remarkable change in just 20 years. That means almost half of Americans directly benefited from the enormous market appreciation between 1982 and 2000 and are prepared to see their wealth increase again when the current stock market slump ends."

Link

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Guess you ain't got the right neighbors Gizzard. Not a suprise though. Losers tend to surround themselves with other losers. Successful people tend to seek out other successful people.

I remember many years ago I made a ton of money one year and decided I needed a CPA's advice. One of his first questios was- "Do you like to spend it or do you like to save it?" It was a no brainer for me. But the fact that he had to ask that question indicates that the people that don't have any investments "like to spend it". So I guess in a sense you're right Gizzard. The economy sucks, America sucks, GWB sucks. And for the losers of this world that have to spend every nickle that tickles their pocket things will always suck.

That part of your article, Nomad, is quite misleading. Just because you QUALIFY for something doesn't necessarily mean that you're participating in a vast amount of stock purchases. I feel that Mr. Boaz is embellishing a rusty car with a new paint job with that one.

It looks like Mr. Boaz forgot to mention debt that families can build up in one year. And I'm not talking about just the debt that is random.
Take someone that fits in that group for instance. What happens when you have the following:

[1]Doctor Bills [2]Prescription Bills [3]Kids need help in College [4]The heating and cooling bills -- depending on the months that you're in at that present moment. [5]Those property taxes that come in twice a year. [6]Insurance premiums -- car; house; health -- if you're now paying for it yourself because you are now retired.

I wonder why Mr. Boaz forgot to mention those elements? Could it be because he used the word QUALIFY ?

Well, I wouldn't say that it sucks as much as I would say that it could be a lot better.

NO WAY!

Now you're on track!

The only thing "rusty" Griz, is what is sitting over your clavicles. The fact is that well over 50%, more like 57% of adult Americans are vested in the stock market, via not only direct investments, but also in pension plans, and 401ks. You need to do a couple of things . first, start going to some logical sites, and two, give up all this "Crap" that you are injesting from those Left Kook sites.

It tends to foul up what limited amout of Hard drive space you have available upstairs. Time for a Defragmentation.

Where the f*** in the constitution does it say the government is responsible for people earning a living????? Yeah, it cost money to live. People get into "debt" because they can't manage the money they earn or they make stupid life decisions counting on the taxpayers will bail them out. If you need more money to survive work 2 or 3 jobs. Lord knows I've been there a time or two. Maybe they should teach money management in grade school instead of teaching kids how to put a rubber on a dildoe.
You're gonna have a splendid mediocre life at best Gizzard with your attitude. Fool.

The constitution is a living document where Leftists can add positive rights according to them.

Now, lets turn this around: The Founding Fathers never expected to dea with Islamic Terror Cells and therefore we need to do something to increase our security and policing eg. Patriot Act.

Let me know your thoughts.

The patriot act wouldn't be needed if we kept tabs on who the hell is entering this country. First thing we need to do is expel every illegal border crosser and expel all those that have over stayed their visas. Once that's done triple check the background of anyone the wants to enter the US. Of course there's a better chance of Osmammy praying to Jesus before that happens. So I guess the patriot act is the next best thing. Only I would include monitoring all Mosques as well.