Wednesday, August 29, 2012

Curmudgeon offers bipartisan election advice that neither party will take

I would proudly vote for the first candidate who promises to break up the banks (no more "too big to fail" nonsense). The risk of failure is supposed to be something that a capitalist accepts in exchange for the possibility of great reward. Our billionaire bankers are capitalists... aren't they? Shouldn't they be?

I would proudly vote for the first candidate to promise to vigorously investigate and prosecute banks and bankers for mortgage fraud, fee gouging and market manipulation. (You'd have thought the Obama administration would have made this a priority -- but, so far, nothing.)

I would proudly vote for the first candidate who admits that President of the United States has only limited influence on, and no control over, the American economy. I'll even donate a few lines for the speech:
Look, Stalin thought he could totally control the old Soviet economy. Stalin really tried. Every year a new five year plan. How well did that work out?

Tax laws are passed by Congress and must originate in the House of Representatives. That's Article I, Section 7 of the Constitution for those of you who never actually read the Constitution in your high school civics class. Or in law school. The President can propose tax policies and if he or she can get those tax policies enacted into law, these can have an influence on the economy, for good or ill. But influence is not control.

And the President can set spending priorities which may have an influence on the economy -- again, if Congress cooperates. Buying roads and bridges and rockets and planes and guns probably stimulates the overall economy a lot more than income transfers -- but it's political heresy to say so.

And gasoline prices? The President can release oil from the strategic reserves which should, in theory, suppress prices for a brief period. But, with that limited, temporary exception, the President has no control over gas prices. Even when they go down.  Unless there is illegal manipulation of gas prices; then the President can turn loose the Department of Justice.
Of course I don't know if a candidate reading such a speech would even be allowed to finish it. If the candidate wasn't stoned off the stage by his or her one-time supporters, the candidate's family would probably rush the stage and cart him or her off to a sanitarium.

But, speaking of gasoline prices, I would proudly vote for the candidate who promises to vigorously investigate and prosecute illegal manipulation of gasoline prices. Some mullah in Iran gets cranky and gasoline already in the pipeline goes up in price? Gasoline prices rose a nickel a gallon across the nation yesterday. Because it's raining in New Orleans? Really? Are we supposed be stupid enough to believe that?

We subsidize oil and gas production -- which might be defensible if these were marginal businesses and not making billions and billions every quarter. You want to encourage domestic production and end subsidies? Tax imports. But, of course, that would set off howls from consumers and environmentalists alike. But we are addicted to oil in this country and we need to get into rehab. Screaming will be involved. I would proudly vote for a candidate who promises Manhattan Project-type priority funding for an alternative energy program that actually works. Whatever happened to fusion research anyway? Wasn't the 21st Century supposed to be about fusion? (And jetpacks, of course.)

But forget about jetpacks for a minute (if you can). I would proudly vote for the candidate who comes out for a complete ban on political robocalling.


David Christian Newton said...

Well over half of all oil used in the United States comes from the United States. The largest foreign providers are Canada, Mexico, and Venezuela. The four countries named provide between 90 and 100 percent of the oil processed in the United States, and that situation has existed for a long while...forty years or so.
The main reason for the increase in price at this time is that the world market price for oil as priced in dollars has shot up because the dollar has weakened considerably during the last two years. Obama's deficits and the Fed's policy of QE, with complicity by Geitner have caused this "secret devaluation".
The oil companies small, medium, and large all together paid 100,000,000,000 (one hundred billion dollars) in local, State, and central government taxes last year. General Electric paid no taxes to the central government last year.
The oil industry receives no subsidies. It only is allowed to deduct normal GAAP tax accounting procedures that relate to the costs involved in the production of their product.
Instability in one place of the other can also affect market prices, like a freeze in South Texas causing an increase in prices for Red Grapefruit does.

Just some thoughts.Thanks for your patience.
El Gringo Viejo

The Curmudgeon said...

This one is so politicized, it is impossible to determine the truth without spending a looong time in the library. There are a great many Internet sources which support your assertion, many of them seemingly credible. There are also a great many Internet sources that insist that subsidies are ongoing.

As for GE, I've seen this claim as well. I operate my business as a corporation. In a good year I can zero out my corporate tax liability by paying myself at the end of the year. (Last year, I earned so little that I wound up paying a corporate tax. My son the accountant looked at my corporate return -- which he did not prepare -- and pronounced it correct. He tried to explain why this could be so. I didn't understand -- but that's another story.) The point is that the income to me personally is taxed -- money honestly earned does not escape the Tax Man even if I "evade" a corporate tax.

Therefore, just because a corporation pays no corporate tax does not mean that the income being earned is not taxed... somewhere. I would like to see further, objective inquiry into this GE-paid-no-tax assertion but I begin to doubt if any such exists.

As for oil prices -- the per barrel amounts do not seem to have fluctuated as wildly as the pump prices. This "fuels" my suspicion that market manipulation has as much to do with gasoline prices as supply and demand.