Until recently, the prevailing opinion about the human appendix came from research provided by Charles Darwin. That theory suggests at one time the human body had an organ called the cecum that aided in the digestion of food. As man developed into a more sophisticated machine, the cecum evolved into the appendix with virtually no role in a modern world. This all happened over an 80 million year period and was aided by cultural changes like sewer systems and clean water. As we moved from dirt and rocks as appetizers to crab cakes and oysters Rockefeller, that big cast iron gut was no longer needed.
But, now we might see evolution in reverse because of the dishes being peddled out of Washington D.C.
When the president's weekend radio address brought up the Buffett Rule again, I felt a twinge in my stomach. Oh, for goodness sake! You can't be serious about this plan as an economic cure-all when it was debunked by a bipartisan committee just a few days ago. The Rose Garden beat down of oil companies suggests they are an entity against America. "You can stand with the folks behind me and America or you can side with the oil companies." Whoa ... we are talking about American companies that provide American jobs that even qualify for American tax breaks because they create so many domestic, all-American jobs, right?
For the administration this might seem like a win-win, but for everyone else it's a lose-lose. The winning comes from the ability to shake down an industry for its profits while promoting an ideology that hates the profit motivation in the first place. This June, the administration will auction off deepwater leases at $100.00 per acre, increased from $37.50. In a statement from the Bureau of Ocean Energy Management, the hike was justified to "ensure taxpayers received fair market value" while also making sure to "provide leaseholders with additional impetus to invest in leases that they are more likely to develop."
It should be noted when these lease holdings are auctioned in New Orleans there will be 38 million acres up for grabs. That's a lot of money for taxpayers—I wonder if they'll see any of it? In the meantime, a barrel of latte from Starbucks costs $1,236.48, but there is no outrage from the White House. Moreover, oilandgas360.com points out the industry pays the government $86 million a day in taxes, fees, rents and royalties. My goodness how could wind and solar replace that kind of income and still provide the same value—ever? Nonetheless, the browbeating continues.
With net margins of 7.9% versus 11.5% for the Dow (sans oil) and 23.9% for Apple, it's hard to see how oil profits are unfair. But we got an ear full from President Obama last week, and it's not going to stop.
Sunday on Face the Nation, Joe Biden said that Republican Mitt Romney is living in the dark ages of 1956 and that Russia is now a staunch ally of America. I wonder, and I'm not being facetious, if the White House thinks Russians are more American than Republicans and American oil companies. The nation is starved for real economic progress. I think the country is tired of the administration grading itself on the curve using only the worse moments of the economic meltdown as some kind of barometer to prop up policies that aren't even economic in reality. The economy isn't supposed to grow in a higher tax environment and gas must be necessarily higher.
In the same period, the Buffett Rule would collect $47.0 billion our debt load will climb $7.0 trillion. Gosh, that's not even the proverbial drop-in-the-bucket. Yet with first quarter growth of one and a half percent, we should be focused on real economic programs and not on ripping the nation apart over pity jealousies. The administration is telling people that pay zero federal taxes that somehow they are victimized by someone who pays 15% on investment income. That same income was also taxed before it was issued as a dividend. That same income that became the original investment after it was taxed as ordinary income.
I know revenge is a dish best served cold, but while economic hatred might be easy to swallow for those seeking an answer to current personal financial letdowns, it's damn near impossible to digest for an economy.
From a practical point of view, it's nuts not to seek real economic solutions when so much is at stake. Yes, Mr. President, not only do you begrudge those making a million dollars a year but you also begrudge households making more than $250,000 a year because all that money could be poured into the foundation of your utopia. The thing is that making people hate money and success is an expensive proposition. It's already proven you can't take away enough money from everyone in the nation with household incomes north of $250,000 to keep spending and keep up with transfer payments.
Add into the mix of the need to fool poor people into accepting less while solar panels and windmills suck up their crumbs. While all of this is going down, the rest of the world will creep even closer and that will mean higher interest rates and more global transactions done without US dollars. While the administration endeavors to besmirch the profit motive, all the time essentially stealing money for its own agenda, the nation is going to suffer. The profit motive works. Individual accountability and work ethic matters. America is not a mirage; its success is real, and its place in the world is real, but it can be undone.
There is a chance over the next five years that Americans can rewrite biological rules and redeploy the cecum. I feel mine growing already just to digest the crap coming out of Washington. It's all dirt and rocks smothered in mean-spirited gravy for taste.