Friday, April 04, 2008

"Soy un perdador. I'm a loser, baby..."

I hate Glenn Beck. I hate him so much. I hate him for the same reason I hate most pundits: they spew ideas that rile people up just so they can keep a job. Mr. Beck is just the latest incarnation of Rush Limbaugh and he doesn't provide any new ideas or real insight. Here's the example that got me so riled up.

Today on, Mr. Beck authored the following comment:
Yes, times are tough for many. Sure, oil companies make a lot of cash. But, for that money, they get us to work, get ambulances to the hospital, keep our homes warm, and employ thousands of our friends and neighbors while financing their retirement, paying their health care, and providing energy to millions. Because of capitalism, they have the incentive to do that. I've yet to see what our government does for us with their rather large chunk of each gallon of gas we buy, and I've yet to see them offer to return it or suggest a gas-tax-windfall-tax-tax.
1. Sure, but your argument is still bogus.

Mr. Beck falls into one of the common rhetorical traps: use the word 'sure' and people will dismiss the negative statement that is to follow. A more correct rendering of the offending sentence would be:
Oil companies make a lot of cash.
Yes they do, Mr. Beck. Mr. Beck here is making the argument that it's okay that oil companies make huge profits because they are providing the country with an essential service. I disagree. I feel that it is precisely because they provide and essential service that their profits should be regulated. They have the ability to hold the country hostage and demand more profits. Because they essentially have a monopoly, the only thing standing between them and milking Americans for every penny they can get is governmental regulation.

2. Tax and spend, baby!

Beck's second argument is that the government makes a huge amount of money with gas taxes and doesn't do anything with it. With some due respect, Mr. Beck, you are wrong. Gas taxes are reinvested by the state (including Feds) in roads, mass transit, and other transportation projects. I think that Mr. Beck should also note that while gas prices have gone up, the tax has remained relatively constant. Gas taxes are a fixed dollar amount per gallon rather than a percentage of the total cost. When gas prices go up, the government still gets the same amount of money - oil companies get the rest. Check your facts, jerk!

If Mr. Beck wants to start making real arguments instead of mere pandering, he's welcome to visit this website which provides some rather intelligent (and almost persuasive) arguments as to why the system is the way it is and why it should stay that way. There is an interesting article on the history of the gas tax. They also argue that oil companies are not mere profit machines. I disagree, but I'll save that for another day.


Kirsten said...

You know what's funny - I could have poked holes in his statement when I was a mere high school student. Perhaps he needs to work on his "continuing education" especially in the field of economics.

Daniel said...

Yeah, he's a dork. But it's the same with Hannity, Limbaugh or any of those morons. And it's not just right wing pundits either, many left wingers are also stupid. I guess it's unfair to expect all pundits to be as smart and witty as Stephen Colbert. Sigh.

Mormegil said...

Yes, let's regulate industry. It's worked before and will work again. Let stifle capitalism and ensure fairness for all.

Dan what other industries would you consider 'essential'? Must you use oil or do you have alternatives?

Daniel said...

Oil is essential. Until alternate fuels are more developed, oil reigns supreme as the only way to travel. Shut down oil and you shut down the world.

Mormegil said...

Certainly there are other essential industires banking? Without banks the world would shut down, perhaps we should more stringently regulate them because they should be very limited on their profits.

Think of it this way Daniel, if we simply allowed 'big nasty oil' to operate in a capitalist manner they would be drilling for new oil and new supply would mean lower prices; you must remember it is a competative market out there and competition is good for the consumer. Chevron could say "well we are the oil giants and we will charge however much we want on oil" Well another company will come along and have much lower prices...everybody buys oil from there. Obviously I've simplified this all a bit but the point remains; we are not 'held hostage' by companies even supposed monopolies. I would dare say a computer is a near essential (I know it's not a great comparision but it will suffice) Take Microsoft, they are the giant of the computer world. They have been accused of being a monopoly more than once. But the fact is, do you have to buy their product? No you do not, you can abstain (I know, nobody cares to abstain from any indulgence and we must have all) but you can do it.

If big oil did as you said and made everything so high that we could function, what benefit would it be to them? The economy would collapse and nobody would be pumping in money to their coffers.

ImAGrassHopper said...

Somebody made the puter you are on because of potential PROFITS. Same for the makeup you wear, food you eat, car you drive, the pot you smoke, your Birkenstocks. Do you even know the meaning of "monopoly"? Without capitalism you would be eating grubs and fishing with a rock. Without it your world will crumble. I love the nievete of the young liberals.

Daniel said...

Thank you for your comment, Mr. Grasshopper and welcome to my haven for baseless pro-communist rantings.

I thought I'd take a break from my usual schedule of getting high and putting on women's makeup while I engage in homosexual activity to respond to your insightful message.

If you read my post carefully, you will notice that I don't expect oil companies to get rid of profits altogether; rather, like public utilities, I believe that their profits should be regulated. They provide an essential service that this country cannot live without. As such, they are in a unique position to withhold their product and force costs to go up without any repercussions. While the handful of oil companies that control the market may not be a monopoly for antitrust purposes, they maintain a de facto monopoly because there are no viable alternatives to oil consumption available at this time.

Nevertheless, my naivete certainly prohibits me from seeing this issue clearly, so I appreciate you bringing this to my attention. I will certainly try to be more capitalistic in the future and trust that Smith's "invisible hand" will keep our highly integrated global economy from crashing down or being run by a handful of powerful entities.

Mormegil said...

"While the handful of oil companies that control the market may not be a monopoly for antitrust purposes, they maintain a de facto monopoly because there are no viable alternatives to oil consumption available at this time."

Daniel, so it is the oil companies fault that there are no alternatives to oil at this time, therefore they should be regulated.

Daniel said...

Absolutely. I only have anecdotal evidence that they have been keeping alternatives out of the marketplace, so I won't speculate on that. The real crux of my argument is that they absolutely do have a monopoly, its sources notwithstanding. As such, they should be treated like a public utility, which can still make a profit, but their profit should be regulated. It won't work exactly like it does for public utilities because the source of their product is mostly foreign and we can't change how much OPEC charges for a barrel of oil. But we can keep them from making record profits at a time when gas prices are at a record high.

Mormegil said...

I don't understand why unregulated profits are so evil and maligned by some who are in the very business of making unregulated profits themselves.

I say unregulated and what I mean is unregulated by the government. Regulation is self-occuring in a truly free market.

'Evil Big Oil' is not really it's own man for the most part as you pointed out. OPEC is there, how can you or the powerful Obama, hope to tell OPEC what they can and can't charge us. Perhaps if we had a larger amount of oil production than we could influence them but currently they just would laugh. Of course, we can't drill for more oil because...well because that would make sense. We talk about energy independence but what has anybody actually done about it?

My point is that US 'Big Oil' is not the 'Evil Big Oil' that you and your hippie buddies want to make it out to be. I think the real bad guy is OPEC who is by definition an oligopoly, if not an actual monopoly. And your 'record profits' should not be taken out of context either. Is it a record dollar amount or is it a record percentage?

Daniel said...

I didn't say that unregulated profits are bad per se. People can make as much money as they want, provided they're not doing it in a non-competitive way. A monopoly is by definition non-competitive, that's why they're either illegal (anti-trust) or highly regulated (public utilities).

I do like your point about how OPEC is also an oligopoly. But the fact that OPEC is guilty of the same crime doesn't diminish the injustice of domestic Big Oil's stranglehold on this essential resource.

And as to the record profits argument, it doesn't matter if it's record dollars or percentage, it's still awfully darn high for a period where Americans were spending obscene amounts of money for gas.

Mormegil said...

Daniel, it does matter if it's a percentage or dollar amount. One trues it up the other is subjective. Let's say I make a modest 5% profit a year, not a big deal right. Well in the past I've been making 8%. Now if we were to look at dollars I could easily have made double or triple what I made in previous years yet had a lower percentage. I could have expanded, or opened a new service or whatever but the percentage is important to consider as it provides more objectivity to the matter.

Jared Crookston said...

Not as deep as the previous comments, but maybe applicable.