Rising Gas Prices

As the prices at the pump continue to rise, the people seem willing only to point their fingers at those greedy oil companies, rather than the government that has created the problem and then exacerbated it with outrageously high taxes on the product. How can Exxon Mobil justify such high gas prices, all the while paying CEO Lee Raymond a $400 million retirement package? Tom Doggett of Reuters called this action a "shamefull display of greed." But is it shameful for a successful and profitable company operating in a quasi-free market to reward its’ CEO for a job well done? Most people do not realize that the profits collected on a gallon of gasoline are actually lower than the tax collected by the government on that same gallon of gasoline. And now the politicians are playing on the ignorance of the American people by calling for a “windfall profit tax” on the oil companies to off set these rising gas prices. It is too bad that corporations do not pay taxes; they pass them on to consumers via higher prices. So how does this help the situation?

The focus of anger towards the oil companies at the problem of rising gas prices has been wholeheartedly misdirected by the people. When reporters like Doggett along with many other members of the media, and both Republican and Democrat politicians speak out against the oil companies as the root of the problem they fan the flames of an anti-capitalist, anti-free market mentality. They are doing the U.S. a great disservice with their rhetoric.

People should realize that it has been the government’s environmental policies that have created this problem, not the oil companies. Mandates set forth that have not allowed a new refinery to be built in the last thirty years have stifled competition in this industry. Regulations that require so many different blends of gasoline depending on the region the gas is sold in also contribute to higher costs associated with producing and distributing the product. Since only certain blends can be sold in certain areas, shortages are created – thus we pay higher prices.

Environmentalists have blocked oil drilling in Alaska for many years now. Floridians do not want U.S. oil companies to be able to drill for oil of the coast of Florida because they are afraid there might be an oil spill of some kind so close to their homes. Many people are probably unaware of the fact that Fidel Castro has signed agreements with Spain, Canada, and China to explore offshore drilling northeast and northwest of Havana just about 50 miles from Key West. I wonder how the Floridians feel now. They have blocked U.S. companies from exploration of this area due to fears of oil spills, but U.S. oil companies are much better equipped to safely drill for oil than China and Spain.

Now I support protecting our environment, but there has to be a way to do it without creating virtual monopolies and oil shortages as unintended consequences. World wide oil demand has increased to a point that these reckless environmental policies are going to create a gasoline price disaster. Something must be done, or better yet undone, to allow for more competition, and easier production and distribution of gasoline.

But perhaps the vilest aspect of this whole debate lies in the hidden truth about the secret taxes paid on a gallon of gasoline. I say secret because this is the one product consumers purchase that they are largely unaware of the tax rate they are paying. Why is this so? The federal government takes 18.4 cents of every gallon of gas sold and the states take an average of 27.5 cents per gallon. This is taken from consumers at the pump before they even realize that it is gone much like the federal withholding tax from their paychecks. It just so happens that the average profit made on a gallon of gasoline by the companies that produce the gas is only about 8 cents per gallon. And then these same companies pay taxes on those profits.

It is time for the American people to wake up and understand what is really going on here. We need to hold our government accountable for its’ unjust actions that have put us in this position, not the oil companies who are only responding to market forces and unjust government policies.

Martha Stewart

I know this is old news, but I was assigned a paper on this topic so I decided to put my preliminary thoughts here.

I was thinking about the Martha Stewart conviction tonight as a result of an assignment in my Business Law II class. The assignment requires the reading of several newspaper articles about the development and analysis of the trial, followed by several articles on business ethics. After having read the articles I am supposed to write my own analysis on business ethics as it relates to the Stewart case. The Prof. said that students may cite other articles if necessary. So I decided that perhaps I should cite one article I remember from Reason Magazine a year or so ago titled “Why Martha Stewart Should Go to Heaven and the SEC Should Go to Hell.” I think the title of that article alone might be enough to receive a grade of F on the assignment.

Before I even went back to reread that article from Reason for more information, I have written down my general thoughts on this case from over a year ago. I will use this assignment as an opportunity to argue that the government was the guiltiest party of ethics violations in prosecuting Stewart for allegedly lying about the reasons she dumped her stock in Imclone.

In the government’s never ending quest to punish people for crimes in which there is no victim, it created hundreds if not thousands of victims by calling out the dogs on Martha Stewart. How many stock holders of Martha Stewart Living Omnimedia as well as stockholders of K-Mart lost large percentages of their investments when those stocks tanked after news of the government’s prosecution and subsequent conviction of Stewart broke? A verdict based on the government’s contention that Stewart lied to federal agents about her reasons for selling her stock in Imclone.

Which action was the greater evil?

V For Vendetta

I finally saw V For Vendetta last night. It was one of the best works of anti-state expressions Hollywood has produced in quite some time.

The hero V was not only a bad ass knife thrower and combat expert, but he was also quite the intellectual. One of my favorite lines from the movie came when V, played by Hugo Weaving, was explaining to Evey, played by Natalie Portman, the reasons for his mission to take the current government down. He spoke to her in terms of Newton's Third Law - for every action, there is an equal and opposite reaction. This was in reference to the physical and emotional scars the state had left on him and many others. He was merely the eventuality of such a tyrannical state that would rise up to lead a revolution.

I also enjoyed the references to “America’s war”, and the destruction that it had caused so many other people of the world. Of-course this movie being set some twenty years in the future, America had erupted into some kind of civil war. There was some mention of the war in Iraq, and the subsequent wars in several other Mid-Eastern countries that happened later on.

The opening scene takes place on the streets of Britain, and depicts Evey, being harassed by state thugs for being out after curfew. It is at this point that the audience is introduced to the hero V, who saves day. I know this movie was based on a graphic novel written in the 1980’s, but the opening scene really reminded me of the opening scene in Vin Suprynowicz’s novel, The Black Arrow. Now I know where Vin got his inspiration for his great tale of resistance.

I highly recommend readers check out The Black Arrow, as it is a similar tale of a revolution in the USA.