Barack Obama says Democrats and Republicans need to compromise. In that vein he now supports a bipartisan effort that would lift the ban on drilling for domestic oil that has been in place since 1982.
TITUSVILLE, Fla., Aug. 2 -- Sen. Barack Obama on Saturday said a shift in his stance on offshore oil drilling is a necessary compromise with Republicans to gain their support for his broader goals of energy independence.
On Friday, Obama indicated a willingness to support an effort by five Democratic senators and five Republicans to break Congress's energy impasse with legislation that would allow expanded offshore oil exploration and embrace ambitious energy efficiency and efforts to develop alternative fuels.
Obama supports the the bipartisan effort because it attempts to maintain some kind of a ban on drilling while at the same time mandating conservation measures. And to further compromise the compromise, Obama also proposes a windfall profits tax, which leads the Wall Street Journal to wonder what is a windfall profit, and how does it differ a normal profit?
Is it some absolute number, a matter of return on equity or sales -- or does it merely depend on who earns it?
Enquiring entrepreneurs want to know. Unfortunately, Mr. Obama's "emergency" plan, announced on Friday, doesn't offer any clarity. To pay for "stimulus" checks of $1,000 for families and $500 for individuals, the Senator says government would take "a reasonable share" of oil company profits.
Mr. Obama didn't bother to define "reasonable," and neither did Dick Durbin, the second-ranking Senate Democrat, when he recently declared that "The oil companies need to know that there is a limit on how much profit they can take in this economy." Really? This extraordinary redefinition of free-market success could use some parsing.
Take Exxon Mobil, which on Thursday reported the highest quarterly profit ever and is the main target of any "windfall" tax surcharge. Yet if its profits are at record highs, its tax bills are already at record highs too. Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion. That sounds like a government windfall to us, but perhaps we're missing some Obama-Durbin business subtlety.
Steve Mufson blogging at the Washington Post weighed in on windfall profits the other day with a column that began this way.
I'm often asked this question: How did Big Oil conspire to get its big profits? The idea that a company like Exxon Mobil could earn $11.7 billion in a single quarter boggles the mind, even if you know what a far-flung empire it is.
Isn't that a stunning question. Undoubtedly composed by a liberal. It's a question that doesn't even bother to wonder if there is such a conspiracy. I suppose we should all be thankful that even though he works at the Washington Post, Mr. Mufson was able to get it right. There is no conspiracy. Unfortunately for us, a great many Americans are easily persuaded that there is one. That means a great many Americans would be receptive to a windfall profits tax.
But as most us know, to discourage an activity, you tax it. For all their talk of energy independence the Democrats are against it. They say our salvation will be found in a combination of solar and wind. Well, here's the formula: Solar + Wind + Democrat = hot air.
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