If you didn't see Frank Rich's op-ed in the New York Times on McCain's budget talk, you should. It's the Economic Stupidity, Stupid calls it the way Frank sees it, which is refreshingly honest these days.
Economic stupidity is a trait we can't afford as a nation any longer. We've indulged the fat-cat CEOs and the anything-goes-that-a-lobbyist-wants approach in Congress far too long. Case in point: Congress can't bring itself to enact a windfall profits tax, but while gas prices are soaring, Big Oil industry has hit it big and their executives have soaring pay while their shareholders are getting a lot of the profits in share buybacks (i.e., those windfall profits aren't being reinvested in getting more energy).
The top five BigOil firms had $120 billion in PROFITS in 2007. See Analysts split over windfall profits tax, CNN.com. Democrats in Congress have toyed with a windfall profits tax, but BIG OIL is fighting any such idea with their usual claim that they need all that moolah to "invest".
If our profits are taxed, that means we'll have less capital to invest in new production" and it could raise gas prices, John Hofmeister, president of Shell U.S., recently told CNNMoney.com. Oil companies have been investing more in new production lately, but that argument is a little hard to swallow given the disparity between the huge amounts of money the big firms have been returning to shareholders versus the meager new oil discoveries. Id.
Shareholder got $60 billion through share buybacks (and remember those are taxed very low--at the 15% rate compared to ordinary workers' salaries). So those who own the energy companies are doing just fine, thank you.
What about those who manage Big Oil? Just look at Houston (pointed out by Brains and Egss' Perry Dorrel): ConocoPhillip's CEO Mulva enjoyed a whopping $50 million, and the ten top-paid executives in the Houston area are all in energy companies. See this in the Houston Chonicle online, House Executives Pay Packages Swell by over 30%, July 19, 2008.
I'm not sure a windfall profits tax is the right move, but I'd sure like to see some in-depth discussion of it within the media and in Congress, including a willingness at least to eliminate the ridiculous subsidies to Big Oil that are built into our tax system. There is something unsavory about the kinds of profits that Big Oil is making, the kinds of money that the CEOs are taking home, the profits of the shareholders, when workers are not doing well and the gas prices have hit the ceiling. We seem to have lost all sense of an economy that we are all in together, as we move more and more towards a have and have-not economy, in which the haves take home $50 million and yet talk about understanding ordinary Americans because they didn't grow up rich and in which the have-nots suffer from the results of a focus on growth but not opportunity, wealth but not shared well-being.
Recent Comments