Sophistry is used by Obama, the Democrats and even some Republicans to vilify very successful companies dealing with crucial commodities – like gas. Opponents and demagogues portray the $10.65 billion profit of Exxon Mobile as obscene and rapacious – and demand that punitive actions such as windfall profits taxes be imposed in order to “recoup” what shouldn’t be theirs.
This is an essential component of the Democratic Party’s ideology - punishing those individuals and companies that are successful and ironically, pay inordinate amounts of taxes to begin with.
In contrast, what has Government Motors (GM), a government and union favorite and perennial loser, done for us lately?
How about cost the American taxpayer tens of billions of dollars that we will never see again. A failed company on life support (thanks to Federal government) that should have been allowed to fail and close or markedly downsize that is persistently sucking out rather than contributing tax dollars.
The editorial below places this deception into proper perspective. We will add one more element. Though not entirely linear, if Exxon Mobil had produced only one fifth the amount of oil that it actually did, its profit would have been only be around $2 billion – not so excessive sounding. However, this would have also translated into a higher cost of a gallon of gas (due to supply and demand issues) and its tax “contribution” to our government would have been billions of dollars lower.
Seen And Obscene
Investor’s Business Daily 04/28/2011
Earnings: A few oil firms post what some call outrageous profits. How long before the uninformed and envious demand these companies pay a windfall profits tax?
Exxon Mobil, the largest oil company in the U.S., reported Thursday a first-quarter profit of $10.65 billion, or $2.14 a share, up 61% from a strong year-earlier period. Royal Dutch Shell came in at $8.78 billion, or $1.76 a share, up 68%. And on Friday, Chevron is expected to post a 27% increase in earnings to $5.69 billion, or $3 a share.
Speaking for the anti-capitalist, anti-corporate wing of his party (it's a big wing), Rep. Maurice Hinchey, D-N.Y., called Exxon's profits "obscene" and claimed that "Big Oil" is "robbing" the middle class.
Two days earlier, ABC's Jonathan Karl displayed the bias widely found in his profession when he, too, asked if there is something "obscene" about high oil and gas profits "when Americans are struggling just to fill up the tank."
While billions in profits might seem a little much, let's take a look at the context.
Exxon earned $10.65 billion on $114 billion in revenue. Shell's $8.78 billion profit came on $114.84 billion in revenue. Chevron's expected top line of $66.62 billion will likely yield a bottom line of $5.69 billion. These are not outsize margins — roughly 9% after taxes in the case of Exxon, less than 5% for Shell and 8.5% for Chevron.
In comparison, Apple made $6 billion on revenue of $24.7 billion, a profit margin of almost 25% in the first quarter. Google's profit margin for the same period was nearly 27%. Too high-tech for you? McDonald's makes 20 cents on the dollar. Where is the outrage over their profits? Aren't they committing robbery too?
Also lost in the rush to demonize oil companies is historical context. What some would say are large profits simply aren't inevitable. The oil industry has gone through periods of low profits before and will again.
Further, there's a (probably willful) misreading on the left and in the media of oil company profits. They aren't squandered by rich executives but paid to investors — some of them Democrats — and plowed back into producing more energy. If profits are taxed more, investors are hurt, as are consumers who pay higher prices due to energy scarcity caused by curtailed development.
"Obscene" profits? A need for punitive taxes on oil companies? The facts show the Democrats and the media (but we repeat ourselves) are wrong on both counts.
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Given the intransigence and ideological rigidity of the Democrats, Republicans may be forced to decide between the two calamitous scenarios as regards the US debt. The first would be to give in to the Democrats who oppose even the most minimal spending reduction, raise the debt ceiling and allow the debt to continue to skyrocket to the point of insolvency.
The second option would be to shut down the government until appropriate and effective spending reductions are agreed upon and can be instituted. Any such agreement may take quite a while to reach and, of course, would result in the U.S. defaulting on its obligations which will have quite severe consequences.
Though the Democrats will be the offending and irresponsible party in either of these financial meltdown scenarios, the Republicans will be blamed instead by the news media.
Government: US Default Could Be Doomsday Option For Economy
Scott Baker April 23, 2011
WASHINGTON (AP) — The United States has never defaulted on its debt and Democrats and Republicans say they don’t want it to happen now. But with partisan acrimony running at fever pitch, and Democrats and Republicans so far apart on how to tame the deficit, the unthinkable is suddenly being pondered.
The government now borrows about 42 cents of every dollar it spends. Imagine that one day soon, the borrowing slams up against the current debt limit ceiling of $14.3 trillion and Congress fails to raise it. The damage would ripple across the entire economy, eventually affecting nearly every American, and rocking global markets in the process.
A default would come if the government actually failed to fulfill a financial obligation, including repaying a loan or interest on that loan. The government borrows mostly by selling bonds to individuals and governments, with a promise to pay back the amount of the bond in a certain time period and agreeing to pay regular interest on that bond in the meantime.
Among the first directly affected would likely be money-market funds holding government securities, banks that buy bonds directly from the Federal Reserve and resell them to consumers, including pension and mutual funds; and the foreign investor community, which holds nearly half of all Treasury securities.
If the U.S. starts missing interest or principal payments, borrowers would demand higher and higher rates on new bonds, as they did with Greece, Portugal and other heavily indebted nations. Who wants to keep loaning money to a deadbeat nation that can’t pay its bills?
At some point, the government would have to slash spending in other areas to make room for any further sales of Treasury bills and bonds. That could squeeze payments to federal contractors, and eventually even affect Social Security and other government benefit payments, as well as federal workers’ paychecks.
A default would likely trigger another financial panic like the one in 2008 and plunge an economy still reeling from high joblessness and a battered housing market back into recession. Federal Reserve Chairman Ben Bernanke calls failure to raise the debt limit “a recovery-ending event.” U.S. stock markets would likely tank — devastating roughly half of U.S. households that own stocks, either individually or through 401(k) type retirement programs.
Eventually, the cost of most credit would rise — from business and consumer loans to home mortgages, auto financing and credit cards.
Continued stalemate could also further depress the value of the dollar and challenge the greenback‘s status as the world’s prime “reserve currency.”
China and other countries that now hold about 50 percent of all U.S. Treasury securities could start dumping them, further pushing up interest rates and swelling the national debt. It would be a vicious cycle of higher and higher interest rates and more and more debt.
The U.S. has long been the global standard for financial stability and creditworthiness, with Treasury securities seen as a fail-safe investment. But after the near-shutdown of the U.S. government and a new credit-rating report this week questioning the country’s fiscal health, Treasury bills and bonds are losing luster.
If there is a debt limit deadlock, the government by this summer could find itself legally unable to borrow more money to pay its bills, beginning with interest on its debt and gradually extending to day-to-day federal operations. At some point, the government would have to decide which bills to pay and which to put aside.
The debt ceiling will be hit on or around May 16, the Treasury Department says. Unlike the threatened government shutdown, the impact would start slowly, but then build mightily until the damage would be so dire that few political leaders or economists even want to contemplate it. The day of reckoning could likely be delayed at least until early July with creative bookkeeping.
When the House first rejected the Bush administration’s $600-billion bank bailout in September 2008, the Dow Jones industrials went into a dizzying 778-point tailspin. A whiff of a possible similar stock market collapse came on Monday with a sharp selloff on Wall Street when the Standard & Poors lowered its outlook on U.S. debt to “negative” from “stable,” possibly a first step toward a possible downgrade of America’s coveted AAA credit rating.
“We haven’t downgraded it. We just said, if nothing happens, we may have to,” said S&P chief economist David Wyss. He said a government default remains uncharted territory, “which is one reason why it’s not a good idea to hit the debt ceiling.”
“There’s reason to worry,” said Wyss. “But my best guess is that we sort of muddle through this. Cuts will be made, they’ll be too little too late, but at least they will be enough to maintain a triple-A rating.”
“It’s another game of chicken. And this time there are Mack trucks going at each other, not bumper cars. This is a biggie,” said American University political scientist James Thurber. But he predicted that, as in the past, “there will be an accommodation. They will avoid a crash.”
Investment bank J.P. Morgan Chase recently concluded that any delay in making an interest or principal payments by the Treasury “even for a very short period of time” would have large “long-term adverse consequences for Treasury finances and the U.S. economy.” The analysis is being circulated on Capitol Hill by supporters of raising the debt limit.
“If anyone wants to push that button, which I think would be catastrophic and unpredictable, I think they’re crazy,” JP Morgan CEO Jaime Dimon said recently of those seeking to block raising the debt limit.
House Speaker John Boehner and most other GOP leaders agree on the need to raise the debt limit — and don’t want to be held responsible for a new financial meltdown. Still, they want Obama to make more concessions on spending cuts than he has done thus far. That isn’t sitting well with liberal Democrats, who think Obama has already given too much ground.
One reason the two parties can’t find common ground: they can‘t even agree on what’s causing high deficits. Democrats mostly blame it on policies of George W. Bush: two wars, tax cuts that continue to benefit the wealthy and an expensive prescription drug program. Republicans see government spending as the culprit, particularly on Obama’s watch.
In fact, the main reason is the deep recession, which slashed tax revenues and led to hundreds of billions of dollars in recession-fighting spending by both Bush and Obama. The debt was $9 trillion in late 2007 before the start of the Great Recession, and it’s just a sliver under the $14.3 trillion limit today.
Even though GOP leaders say they want to avoid more economic chaos, there is a large crop of tea-party aligned Republicans threatening to refuse to raise the cap under almost any circumstance. Polls suggest a large percentage of Americans oppose raising the debt limit.
The debt limit has been raised ten times over the past decade. Obama voted against Bush’s debt-limit increase in 2006 as a senator, accusing Bush of “a leadership failure.“ Obama recently apologized for ”making what is a political vote as opposed to doing what was important for the country.”
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In the following call to arms, conservative Lloyd Marcus exhorts all of us to vociferously oppose Obama, Progressives and their anti-American, anti-freedom and big government agenda. Being politically correct or silent will not allow us to obtain our goals. We must be fearless and relentless in our attempts to oust Obama and the Democrats in Congress (and elsewhere).
Tea Party David Vs. Two-Headed Goliath
Lloyd Marcus April 23, 2011
On the O'Reilly Factor TV show, Dennis Miller was asked his thoughts regarding the media's response to Obama's numerous flip flops. Miller said the media will report whatever Obama does in a positive light.
We patriots are well aware of the liberal media's love affair with Obama. And yet, for some reason, the reality of Miller's comment hit me hard right between the eyes. I thought, "Oh my gosh. This is not funny. Our country is in serious trouble."
Not only must we defeat the Obama administration, we must take on and defeat the liberal mainstream media as well; take on the two powerful well-funded entities committed to the fundamental transformation of America. Lord, help us!
Patriots, we can, will and must defeat this two headed evil Goliath. Despite the left's shock and awe public relations slanderous attacks on the tea party and our candidates, we took the House of Representatives. Thus proving, they can be beaten!
I am so sick of advisors cautioning us conservatives to walk on eggshells when dealing with the liberal media. It has even been suggested that we stop using the term "tea party" due to the negative image created by the media.
Patriots, even if we change our name to the "Happy Go Lucky Nice People Movement," we will still be targeted for destruction by the media. What part of they hate us and want us to fail do our advisors not understand? The liberal media is going to put a negative spin on whatever we say.
Now, am I advocating saying stupid provocative things? Of course not. I am advocating fearlessly and aggressively attacking Obama's horrific record. Call out the liberal media on their biased reporting. Stop allowing the Democrats and their media minions to set the rules of engagement. Patriots, the stakes are far too high to wimp out foolishly seeking approval from those actively pursuing our total destruction.
Again, I say, what do we have to lose by confronting the democrats and the liberal media? They are going to trash us regardless.
Yes, they will call you a racist. I say this in love: "Get over it." Throughout U.S. history many have suffered far greater and paid the ultimate sacrifice. Why? Because America is worth it.
Tons of articles have been written calling me a stupid self loathing n****r, an Uncle Tom, a tea party minstrel, a traitor, a sellout, and a clown. It all rolls off my back. I know I am on the right side. So, why should I care what evil stupid people say or think of me? But most of all, my strength and peace comes through knowing God is with us and America is worth it.
Like little David in the Bible, we must boldly confront the two headed Goliath, Obama administration/liberal media.
Why do you think Trump and Palin are doing so well in the polls? Both are boldly and unapologetically takin' it to Obama and are not kowtowing to the liberal media. Patriots are frustrated with Republicans pandering and trying to "play nice" with a Democratic Party and liberal media who are relentlessly and viciously attempting to kill us politically. The Democrats and the liberal media take no prisoners.
Rush Limbaugh says the Democrats and liberal media will tell you who they fear most by the intensity of their attacks. Who have been numbers one, two, and three on the Democrats' and liberal media's list? Answer: Donald Trump, Sarah Palin, and the Tea Party. Brothers and sisters, we can beat them!
How do we defeat them? In addition to ceasing to fear Obama and his liberal media co-conspirators, we must continue doing what we have been doing. Patriots must continue following their passion and using their gifts and talents wherever needed in our extraordinary divinely inspired Tea Party Movement.
We are blessed with great minds on our side; patriots are writing books, organizing and conceiving various strategies to take back our country.
While some lament that we lack a central leadership organization or charismatic leader, I am grateful for all of our numerous patriot groups and committed individuals. Each is driven to politically defeat Obama in its own way. Their spirit is the tea party.
Just as God's grace guided David's stone to topple Goliath, our stone of truth, honor, and freedom will hit its mark and bring down the two headed evil Goliath of the liberal media and the Obama regime in 2012.
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Many of the elected Left are seeking to make elections and elected officials somewhat unimportant in many ways. That is, they are continually seeking to impose greater restrictions on the American public not necessarily just through laws passed by Congress but also by seemingly infinite rules and regulations promulgated by unelected bureaucrats.
To evolve our country into a socialistic one with a large central government that has virtually total control over most of the activities of its citizenry. The population will be neutered with an ever increasing number becoming docile and agreeable dependents of the State. This further facilitates implementation of their far left ideological agenda.
These same politicians, who are acting like an elitist class akin to the politburo of former Soviet Union, will be rewarded with privilege, power and wealth. We have to look no further than Obama, Nancy Pelosi, Charles Rangel, Charlie Schumer and Barney Frank to see what is transpiring.
We must vociferously and staunchly oppose all these individuals and their policies and do whatever it takes to abrogate their actions and remove them from office.
Our Unelected Rulers
Investor’s Business Daily 04/15/2011
Administrative State: Former House speaker Nancy Pelosi says "elections shouldn't matter as much as they do." Maybe they don't even matter as much as she thinks they do. It seems that bureaucrats are making our laws.
Speaking last week at Tufts University, Pelosi suggested that until recently there was little difference between her party and the Republicans because of "shared values." In her mind, these shared values had rendered elections meaningless in the pre-Tea Party era. But now she fears a true grass-roots uprising has forced a bright line between the parties.
What she and most of the country are missing, though, is the impact of the administrative state. America has become a nation where unelected regulators make law. We should be alarmed.
Recently we learned from U.S. News & World Report that "just six pages" of the 907-page Patient Protection and Affordable Care Act have been turned "into 429 pages of new regulations." That is one page for "every page of (President) Obama's campaign book, 'The Audacity of Hope' — plus another 45 pages."
A few months earlier, the New York Times reported that federal rule makers "suddenly find themselves at the center of power as they scramble to work out details of hundreds of sweeping financial and health care regulations that will ultimately affect most Americans."
According to the Times, "More than 200 health regulators working on complicated insurance rules have taken over three floors of a suburban office building" in Bethesda, Md., "paying almost double the market rate for the space in their rush to get started."
Paul Dennett, senior vice president of the American Benefits Council, a trade group for large employers, is quoted as saying: "There has never been a period like what we are going through now, in terms of the sheer volume and complexity of rule-making."
Issues to be settled by regulators, not elected officials, the Times said, include:
• How much credit-card companies can charge shopkeepers for administrative fees when cards are swiped for purchases.
• Which types of financial companies are so "systemically important" to the economy that they should be subject to greater federal oversight.
• What services must be covered by all insurers as part of the "essential health benefits" package and at what point would premium increases be considered so "unreasonable" that regulators could step in.
This is not a sudden bump in rule making. Regulators have been busy for decades, particularly during Obama's first year in office — which wasn't even a full year. In 2009, the administration published a record-breaking 163,333 pages of rules that affect our daily lives, from the energy we use to the financial decisions we make to the health care we get.
If all this seems inconsistent with the Declaration of Independence's guarantee of life, liberty and the pursuit of happiness without state interference, there's good reason. As Heritage Foundation senior fellow Robert Moffat has written, Americans rightly "feel that they are increasingly being governed by administrators, not legislators. ... The rule of law is being supplanted" by rules and regulations.
The administrative state's disciples believe an army of experts is needed to organize society because they hold special knowledge. In his 1887 essay "Socialism and Democracy," Woodrow Wilson gave fuel to a radical agenda that gnaws at us yet today when he wrote that "men as communities are supreme over men as individuals."
The rise of the administrative state is oxygen for a political left that relishes control of civil society because its members believe they're too smart not to be obeyed. It has a chokehold not only on individual rights, but on the economy as well.
The Phoenix Center in Washington has found that on average, "eliminating the job of a single regulator grows the American economy by $6.2 million and nearly 100 private sector jobs annually."
This would strike most as evidence that the administrative state is counterproductive. Yet there's an absence of a strong effort to reverse it. This isn't inspiring. Elections should mean something, and deconstruction of the body of unelected rule makers would give even more meaning to the pivotal 2012 races.
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Rep. Paul Ryan (R.-WI), Chairman of the House Budget Committee, has proposed massive, desperately need federal government spending cuts as well as tax rate reductions in his “Road to Prosperity”. Troves of empirical data support this approach – benefiting all except the demagogic Liberal politicians.
The vast majority of the Democrats still irrationally support continued unrestrained federal spending and high and increasing taxes, tax rates and fees. They never can have enough of other people’s money to spend. A larger, more controlling and intrusive government that knows best is their ideology. Control the masses, engender their dependency and buy votes by wealth transfer from those who work, particularly the higher wage earners.
Cal Vs. Krug
Investor’s Business Daily 04/11/2011
Taxes And Spending: House Budget Committee Chairman Paul Ryan's bold entitlement reform plan goes beyond taming spending. It recognizes that the history of cutting taxes vindicates Calvin Coolidge, not Paul Krugman.
Rep. Ryan has emerged as someone the country has been waiting for: a fearless, energetic politician with the guts to propose a detailed reform of the out-of-control, until-now-untouchable federal mandatory spending programs. Medicare, Medicaid and Social Security, with their annual automatic spending increases, now make up roughly 60% of outlays.
Some might find irony in Ryan ending up as spending hawk-in-chief, since back in the 1990s he was an aide to supply-side icons like Jack Kemp and Bob Kasten. Both were accused of caring too little about spending cuts as they fought for tax cuts to grow the economy and create millions of private jobs.
Today, after years of unchecked Democratic control of Congress and the White House, the problem of untamed government spending has become a runaway locomotive hurtling us toward a fiscal cliff.
The American public has reacted, spawning the populist Tea Party movement. And in this new environment, tax-cutting politicians are also spending-cutters.
But Ryan still recognizes, as did Kemp and Kasten, that low tax rates are key to restoring the greatness and vibrancy of the U.S. economy.
So when the New York Times' spending-addict columnist Paul Krugman launched his error-riddled attack on Ryan's plan last week, his first volley targeted not spending but Ryan's tax cuts. Ryan would bring both the individual top tax rate and the soon-to-be-highest-in-the-world U.S. corporate tax rate down to 25%.
According to Krugman, "Republicans have once again gone all in for voodoo economics — the claim, refuted by experience, that tax cuts pay for themselves" because they "would set off a gigantic boom."
It's so many years after Ronald Reagan's tax cuts produced the longest peacetime economic expansion in history — extending past the brief George H.W. Bush recession to the Internet revolution of the 1990s. One might have hoped that the losers of the tax-cut debate would, by now, have gone the way of the Berlin Wall.
But then, had history been heeded, the Krugmans actually would have been laughed off the political stage long before Reagan. John F. Kennedy knew when he bucked fiscal liberals in his party and pushed hard for cutting tax rates — including those on high incomes — that President Calvin Coolidge had proved tax cuts do exactly what Krugman says they don't: produce new jobs and fill government coffers with new revenues.
As Veronique de Rugy, senior research fellow at George Mason University's Mercatus Center, pointed out in a paper for the Cato Institute, "detailed Internal Revenue Service data show that the across-the-board rate cuts of the early 1920s — including large cuts at the top end — resulted in greater tax payments and a larger tax share paid by those with high incomes."
De Rugy found that as "the marginal tax rate on those high-income earners was cut sharply from 60% or more (to a maximum of 73%) to just 25%, taxes paid by that group soared from roughly $300 million to $700 million per year." From 1922 to 1929, real GNP grew 4.7% a year and unemployment fell from 6.7% to 3.2%.
What Krugman mocks as "trickle-down" was actually a tsunami of prosperity that expanded by 84% those making between $10,000 and $100,000 annually.
Taxes and spending can't be divorced. The Krugman way of big spending and high tax rates condemns future generations to never-ending government dependency.
Ryan's way not only reforms and saves entitlements. It saves us from the left's goal of a Europeanized American economy.
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