Friday, April 28, 2006

GOP on Oil: Shameless, stupid, unprincipled

Back when I worked in politics for the National Right to Work Committee, we'd have new hires who were usually new to D.C., idealistic, full of fire, but often not that familiar with the messier reality of politics. "Here in Washington, you see politicians in their natural habitat -- it's not pretty," I'd tell them. We'd have bull sessions, either in the office, or over beers after work, and I made sure I set them straight about the true nature of partisan politics.

I'd say something like this:

"You guys have heard the one about the 'Stupid Party and the Evil Party'?"*

After they'd nod, I'd say,

"Well, here's how it really is: there are two parties in Washington: one with principles, and one without. And, unfortunately, gentlemen, we conservatives are allied with the party without principles!"

At that, someone would protest this description, particularly suggesting the Democratic Party has principles. But I would continue: "They have bad principles--but they have principles! And be very clear--the Democrats, like it or not, do a far better job sticking to their principles, than the GOP."

The embarrassingly pathetic conduct of the GOP, the last few days, on the subject of Big Oil and gas prices, etc., confirms that. Indeed, if there was one principle to which the GOP remained somewhat faithful, it was that it is the party of business; indeed, Big Business. But, as we can see, sometimes even that principle gets thrown to the wolves.

Oh, where to begin?

First, the whole thing about "record profits." Compared to what? Lots of big industries are making lots of money. Citing dollar figures makes me very suspicious. Are these figures adjusted for inflation? How do they rate as a percentage of sales? Etc. Just saying, breathlessly, "Chevron earned umptiump billion dollars last year, more than ever!" doesn't mean much. They sell a lot of oil and gasoline, and related products. The price is at its highest in nominal dollars (I don't know what they are in inflation-adjusted dollars, but it's obvious that if you adjust for inflation, the current prices are not record prices; another evidence this is flapdoodle).

Second, Big Oil doesn't set the price of oil and gasoline. The marketplace does. And the problem is very simple: supply and demand. The economies of two huge countries, India and Red China -- representing between them about 1/3 of the world's population, are growing by leaps and bounds. That happens to be very good news for the people there, and the world. But it means they are gulping down oil, cutting into the supply we used to count on. There's the demand side.

On the supply side, the hurricanes had their effect last year, other troubles in Nigeria, Iraq and elsewhere have their effect; meanwhile, for good or ill, our country chooses not to drill in places where probably have oil, or know for sure that we do: in the Gulf of Mexico, off the Pacific Coast, on the north coast of Alaska. Apparently, we haven't even managed to increase our refinery capacity in recent years.

Well, what do you think happens when demand grows but supply doesn't keep up? You in the back? "Uh, prices go up?" Right! You go to the head of the class!

But, but, the oil companies are making lots of money! Yes, they are. Do you really think it would be better if they weren't?

By the way, who do you think gets all that money?

Yes, I know, one of the high muckymucks got a lot of press for a platinum-plated, diamond-encrusted "golden parachute": a $400 million dollar retirement package. OK; Big Oil ain't winning the PR Award anytime soon.

But I ask again: where do you think all the profits end up?

After taxes, it either goes to the owners of the companies -- the shareholders, people like you and me, and pension and mutual fund holders -- or back into the business, or invested somewhere else.

I don't care how much they get; I care more about where it goes. I hope a lot goes into exploration, new refining capacity and research. But if it doesn't, the only reason is because those are promising. And for that, you can blame government. Right or wrong, government limits options for exploration and new refining capacity.

Now, as far as research goes? Well, the federal government has been pouring tons of greenbacks into "alternative energy" projects since President Carter's days. Lots and lots of money. The hard reality is that it hasn't really paid off. The idea that Big Oil doesn't want these other things to work is truly silly. Capitalists love making money; they aren't fussy about how.

Meanwhile, the shameless Stupid-and-Unprincipled Party promises to send out $100 checks -- to everyone!, and ride around in hydrogen cars for show (they drive around in gas-hogs for real). It's all humbug.

* I don't know who originated this description of our two-party system, but I heard it from Morton Blackwell, and if memory serves, it goes something like this: "There are two parties in this country, the Stupid Party and the Evil Party: the Republicans are the Stupid Party, the Democrats the Evil Party. Now, every once in a while, they get together and come up with something that's both stupid and evil: and that's called bipartisanship."

18 comments:

Jim said...

I thought the smart boys in Washington set the price on everything. You mean there is a market place where people can bid for goods and services? Who knew?
< /sarcasm>

In truth the biggest cause of this latest spike in oil is actually a result of Washington's meddling.

How the Energy Bill Boosted Prices at the Pump

Jackie said...

Dear Fr.,

There is nothing as extreme as an ex-something - an ex-smoker, an ex-overeater, an ex-nonexerciser or an ex- political groupie or political employee! :)

I'm not saying, however, that I don't agree. I agree that government is TOOOOOO big, taxes are TOOOOOO high (because government is too big) and that this has helped create the entitlement/victim mentality of many Americans. And this is just another example of it.

I'm glad you changed careers.

Father Martin Fox said...

Jackie:

Thanks.

It occurs to me I might send the wrong message, however, so let me be clear.

1. I believe working in politics is a noble thing to do, if done the right way.

I used to describe myself, politically, as a "cynical idealist." My point, in my conversations with the "young turks" I described, wasn't to dim their idealism; on the contrary! I wanted to sharpen it, with wisdom and perception, and focus it, to do the most good.

All too often, I've seen folks with good zeal either become too invested in partisan politics, and/or become so disillusioned that they gave up on the ideals that got them involved.

2. I'm proud of everything I did, working in politics.

Field Marshall Dodge said...

"After taxes, it either goes to the owners of the companies -- the shareholders, people like you and me, and pension and mutual fund holders -- or back into the business, or invested somewhere else."

You know that it goes into lining the pockets of the company's officers and also to paying off congressmen and people in the Bush administration.

You're really high on capitalism and profit taking. Christ was for the poor; why aren't you?

Mark Anthony said...

If market forces are the cause of the rise in gasoline prices, then some combination of the following must have occurred to a significant degree from last Fall to this Spring:

1) decrease in supply

2) increase in demand

3) decrease in refining capacity

4) decrease in delivery capacity

None of these conditions exist. In fact, the mild winter reduced the expected demand for heating oil. Oil production, refining and delivery remains, if too little, consistent with recent numbers.

We hear that oil prices rise on fears of an Iranian conflict, more hurricanes, etc. However, when conditions moderate (a mild winter, e.g.), there is no comparable reduction in prices. It is a matter of "Heads I win, Tails you lose."

If the GOP is pandering to the masses now, it is only because of their shameless pandering for years to Big Oil. When Bush, Cheney and Co. kick open the barn door for the pigs, calling "Free Slop!", they can hardly feign disgust at the outcome.

Market forces are real, but are easily overwhelmed by government policy, greed and cronyism. The present efforts to calm the public may be foolish, but the policies of the Oil Boys in the White House are the original sin.

Father Martin Fox said...

Field Marshall:

Thanks for the laugh caused by your ad hominem.

I "favor" market economics insofar as it appears to be the most rational, and humanistic, economic way of operating -- something our late holy father observed in Centesimus Annus. Having said that, I agree with him that market economics aren't the solution to all our problems, and Western democracies with their (relatively) free economies have their own problems.

That said, given the choice, yep, I'm for free enterprise. The problem of Original Sin remains.

And, yes, I'm for profits; profits aren't immoral; it's how you get them and what you do with them that has a moral quality.

If you can tell me where Our Lord was against free enterprise and profits, please let me know. Also, let me know how not having profits helps the poor -- I missed that one.

Dominic said...

To use the term "stupid" is unbecoming of a Roman Catholic Priest. That derogatory term is something I absolutely don't tolerate at the Catholic school where I work. Students who use that term are dealt with swiftly. Again, that term is uncalled for.

Father Martin Fox said...

Main Entry: 1stu·pid
Pronunciation: 'stü-p&d, 'styü-
Function: adjective
Etymology: Middle French stupide, from Latin stupidus, from stupEre to be numb, be astonished -- more at TYPE
1 a : slow of mind : OBTUSE b : given to unintelligent decisions or acts : acting in an unintelligent or careless manner c : lacking intelligence or reason : BRUTISH
2 : dulled in feeling or sensation : TORPID [still stupid from the sedative]
3 : marked by or resulting from unreasoned thinking or acting : SENSELESS
4 a : lacking interest or point b : VEXATIOUS, EXASPERATING [this stupid flashlight won't work]
- stu·pid·ly adverb
- stu·pid·ness noun
synonyms STUPID, DULL, DENSE, CRASS, DUMB mean lacking in power to absorb ideas or impressions. STUPID implies a slow-witted or dazed state of mind that may be either congenital or temporary [stupid students just keeping the seats warm] [stupid with drink]. DULL suggests a slow or sluggish mind such as results from disease, depression, or shock [monotonous work that leaves the mind dull]. DENSE implies a thickheaded imperviousness to ideas [too dense to take a hint]. CRASS suggests a grossness of mind precluding discrimination or delicacy [a crass, materialistic people]. DUMB applies to an exasperating obtuseness or lack of comprehension [too dumb to figure out what's going on].

Dominic, I agree with your point regarding calling another person "stupid," certainly in school, but also out of it.

However, I think it's a bit extreme to say that the word must be excised from other people's vocabulary, even when describing the behavior of an organization.

Chucko said...

Great post Fr. Fox! I've worked in politics (on the edges mostly) for about 15 years now... and recent activities by the GOP really have disillusioned me to continuing that practice. Michael Savage remarked the other day that it seems like we now have a 3 party system in Washington DC... the Democrats, the Republicans, and the Conservatives.

I find it amusing that some would attack you for supporting business and using certain words because you are a Catholic Priest. That they would do this instead of coming back with facts/figures says a lot about their position. I too support regulated capitalism... any society based on a non-competitive system is destined to fail, but a completely unrestricted system simply leaves too much to greed.

As for FMD's assertion that you are against the poor, I offer the following Chinese proverb:

“Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime”—Author unknown

Our government gives away WAY to many fish.

Andy K. said...

Dear Fr. Fox,

I don't know who said this about American politics:

"America has two political parties; that's one better than communism."

Father Martin Fox said...

Andy:

A good point.

I don't retract any of my criticisms of our political system, and I only stop whaling on the GOP because like a man with sledgehammer, I get winded once in a while, but . . .

The fact remains, we have an exemplary system. It works well. Having worked in Washington, and known a lot of folks in state and local politics, contrary to what many think, I believe they are mostly honest people, in the sense that they don't steal, they don't use thuggery, etc. A lot of what I rail against is "legalized theft" -- using tax money to create political constituencies. Alas, that has been going on since the time of the Romans!

I get so frustrated because of how much more could be accomplished. And because the GOP gained power, in 1994, on a conservative tide, most of which has been forgotten or betrayed.

Whether the GOP will lose power, in Congress, this year, I know not; but its done a lot to deserve it.

Father Martin Fox said...

Chuck:

I'm sorry you are disillusioned to the extent you don't want to stay involved -- if that is what you meant by your comments.

Stay involved! But work on issue-politics, rather than partisan-politics. You won't feel the rush of victory so often, but you can keep your soul intact a lot more easily.

Jim said...

Mark Anthony said:

If market forces are the cause of the rise in gasoline prices, then some combination of the following must have occurred to a significant degree from last Fall to this Spring:

1) decrease in supply

2) increase in demand

3) decrease in refining capacity

4) decrease in delivery capacity

None of these conditions exist.

He should go back and read my earlier comment. 1,3 & 4 are certainly true and 2 is ALWAYS true.

joeh said...

We get a lot of stupid and evil out of Washington and we have little we can do to stop it. How often do we have to go and vote because we are voting for the candidate we think will screw things up least.
For me, there is only a one party system and that party is the one that is against abortion. In Pennsylvannia, the democrats are running a prolife candidate against Rick Santorum. If he wins, and a few more Democrats win, we turn over the judicial committee to Leahy and Kennedy, two pro choice Catholics who will work to insure that abortion on demand remains the law of the land. I cannot stand many of the issues that DeWine represents, but will vote for him based on this one issue. The abortion issue brings many of the voters to the polls today on both sides. All other issues pale in comparison.

Field Marshall Dodge said...

If you can tell me where Our Lord was against free enterprise and profits, please let me know.

I seriously just poured through four books of the New Testament looking for an answer to that, and I can't find one. But after I got done, I realized that The Lord was constantly contradicting himself if you're supposed to give all the gospels equal weight.

"You will always have the poor, but you will not always have me"? What the heck is that about? I think I need to reconsider my interest in Liberation Theology. As I write this, I'm pretty sure that Christ wasn't FOR anything that he didn't later implicitly retract.

Also, let me know how not having profits helps the poor -- I missed that one.

Profit-taking gives money to the rich. Profit is made through the labor of poor people. If you're Arthur Laffer, you think the poor people get back what they deserve. If you know any poor people, or maybe took an oath to promote Our Lord's compassion or something, you see that poor people suffer. And that the disparity of wealth distribution in this country rivals the roman times that the clergy hate so much. Profit is wealth that is stolen from the sweat of the world's poor.

Father Martin Fox said...

"Profit is wealth that is stolen from the sweat of the world's poor."

I don't agree with your theory of economics, and I see no reason why I should. No offense, but the only school of economics to which I could attribute that sentiment is Karl Marx; I do not mean that as an insult. Feel free to tell me if you are drawing from some other theory of economics.

And, if you're not -- if you're simply speaking from your gut, that's okay; but then, why should I follow your gut instead of mine?

Field Marshall Dodge said...

It's certainly a foundation of Marx's Capital, but the concept (except with a neutral or positive weight) doesn't originate with Marx. Even Adam Smith in The Wealth of Nations asserts that the worth of goods is related to the effort required to produce them.

So my phrasing shows a bias, but I don't think that the fundamental concept is controversial-- even supply side economists agree that maximum profit lies not with the people who produce goods, but those who sell them to the consumer. They claim it's good ("rising tides lift all boats," etc.), Marxists think it's unjust. Until this morning, I felt that The Lord thought it was unjust, too, and that's why he was aginst usury and the like. Now I'm not sure.

Anna said...

Field Marshall,

A question? How can a company that is not making a profit stay in business? If the stuff they buy to make their products costs more than they can sell it for, they operate in the red, and that can't last very long.

Their workers would then lose their jobs, and need help, at least temporarily.

That said, I am against the types of profits, and the amounts of money that a number of CEO's are making. The funds should be used to 1) raise salaries for their employees, and/or 2) be reinvested in their company for new equipment, new research into product development.