“Today, members of Congress have a simple choice to make..”
President Obama was speaking in the White House Rose Garden this past Thursday. Our nation’s energy problems –problems that, as he stated last month, have plagued our country for over thirty years – could now be addressed with one simple juxtaposition and one obvious choice for those who serve in the House and Senate.
“They can stand with big oil, or they can stand with the American people” our President claimed, as he went on to explain his plan to end what he calls “tax breaks” for oil companies. “Right now, the biggest oil companies are raking in record profits,” he continued, “profits that go up every time folks pull up into a gas station…”
President Obama’s remarks about oil companies amount to nothing new – neither in terms of rhetoric, nor in terms of ideas – and they are easy to ignore. Yet they are worthy of our attention, because our President is responding to a crisis with campaign rhetoric that he used years ago, and with ideas that even congressional Democrats have determined to be untenable. Equally as problematic is the fact that the President’s claims get repeated over and over throughout much of the American media, without any fact-checking, contextualizing, or questioning.
So let’s start by questioning President Obama’s logic. He characterized his proposed solution to rising gasoline prices as a “simple choice to make” on March 29th. Yet, on February 23rd of this year, the President belittled the calls from Republican presidential candidates to expand oil exploration and development here in the United States. “That’s not a plan, especially since we’re already drilling” the President told an audience in Miami, Florida on that day. “It’s not a strategy to solve our energy challenge, “ he claimed, as he continued with his disparaging remarks, “…there are no quick fixes.”
So on February 2rd there were “no quick fixes,” yet on March 29th Congress had “a simple choice to make.” Expanding the use of American oil resources is bad, but raising taxes is good. This is apparently the underlying premise of the Obama Administration’s “energy policy.”
Our President’s rhetoric about the oil industry over the past few weeks is essentially a repeat of several of his past performances. During the 2008 oil price spike, in August of that year, then-Senator Obama stood in front of a stadium full of fans in Detroit and said many of the same vilifying things:
“…First, of all..” Mr. Obama began, “You’ve got oil companies making record profits…no… no companies in history have made the kind of profits the oil companies are makin’ right now…They..they…….one company, Exxon Mobil, made eleven billion dollars…billion, with a “b” ….last quarter….they made eleven billion dollars the quarter before that…makin’ money hand-over-fist…makin’ out like bandits…”
The spite and indignation over profitable American companies got the election year crowd fired-up. Yet candidate Obama’s proposed “solution” to the dilemma in August of 2008 was the same then, as it is now: raise taxes on oil companies. His rhetoric fails both in terms of basic economics, and in terms of sound energy policy. But this, apparently, is what President Obama knows, and he will not be deterred.
Beyond the folly of the President’s “tax our way to more energy” strategy, there is the disingenuousness – and the inaccuracy – of the President’s repeated claims of ‘tax subsidies” and “tax breaks” for oil companies. Despite the obvious political strategy of creating a evil demon from which he is attempting to rescue us, President Obama’s loosely worded claims about the oil industry and taxation rates are not only false, but it is harmful.
For the record, when President Obama decries “government subsidies” for the oil industry, what he is actually conveying is his opinion that the oil industry is not taxed at a sufficiently high rate. This is to say that oil companies are being “allowed” to keep more of their own money than President Obama thinks is fair, and he chooses to label this matter of “keeping to much of your money” as a subsidy.
Keeping one’s own money – whether we are speaking of a private individual or an organization – is NOT the same as being paid a “subsidy.” And oil companies are already taxed at a marginal rate of approximately 41%, as compared to an approximate rate of 26% among the other companies on the S&P 500. Yet journalists repeat the President’s claims about “oil subsidies” as though they were factual – which leads us further and further away from sound energy policies.
Anger, vilification, demonization, and misinformation. This is not the essence of leadership, and it does not unite our country. Indeed, it leads to further division – and more energy chaos.
Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.