Posted by
Andrews on Wednesday, May 07, 2008 11:48:15 PM
I am surprised it has taken me this long to get around tot he subject of windfall profits, but apparently it has.
When I hear politicians talk about the oil companies it seems they inhabit some other world than I do. They describe the oil companies as if they were being run by some sort of evil super villain form a James Bond film. They are somehow plotting to garner "windfall profits" and taking "unfair advantage" of consumers.
For the moment, let us ignore that in terms of profits per gallon, Starbuck's makes thousands of times what the oil companies do. Let us also ignore the fact that the reason oil companies earn profits is that that are providing an essential service to consumers. And let us ignore that their "obscene" profits are nowhere near the best in the market, that, over the long term, oil companies fall a bit below average in terms of earnings. And let us ignore that those who want to seize "windfall profits" certainly aren't handing back those earning when companies have losing years.
Even ignoring all of that, there is still something very disturbing about the picture politicians paint. They forget who owns a company.
Of course, it is easy to see why. When they are denouncing CEOs and running down the corporations they want to tax out of existence, politicians act as if CEOs and boards of directors actually own companies. They pretend that somehow these "windfall profits" go directly to these people.
I have already written about how absurd it is to complain about CEO salaries, so I will leave that alone for now, but I do have to say that their understanding of corporate ownership is absolutely incorrect.
When the government wants to seize "windfall profits", out of whose pockets does that money come? The CEO? The board members? Hardly. It comes out of the payments made on stocks. It comes out of dividends. It comes out of money that would go to pensioners, people with 401k's or 403b's.These "windfall profits", which the government finds so abhorrent, would normally go to average Americans who were sensible enough to invest their money. But now, because of rhetorical flourishes and the cultivation of envy, that money will go into the government coffers instead of going to those who try to plan for their future.
Remember that when they say we need social security because people won't plan for retirement. The problem isn't lack of planning, we suffer because, no matter how sound our planning, some politician is likely to come along and seize our money. Thanks to their ability to chum the populist waters, they can thwart our plans, leaving us to rely on the dole for the elderly they call social security "insurance".