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."