President Biden is unerring in his ability to do the wrong thing at precisely the wrong time. In a way it is uncanny.
Just when you thought he couldn’t screw things up any more, he finds a way.
The latest edition of “Joe Biden: Bad Ideas” came yesterday when Biden stepped up his attacks on Big Oil and suggested that unless they lower prices he would push to implement a Windfall Profits Tax on the companies, essentially seizing their profits as a punishment for making money. Such taxes are notoriously idiotic, and even the dimwits in the White House must know that.
It seems like Biden is trying to ruin the economy, and we have hit the point where we have to actually consider that to be a possibility. Everything he has done to the economy has made things worse, and after a while you have to consider whether it is intentional. Glenn Reynolds argues that it is intentional. I agree.
It’s time for oil companies to stop the war profiteering, meet their responsibilities to this country, and give the American people a break at the pump. pic.twitter.com/lpwf0qBtZW
— President Biden (@POTUS) November 1, 2022
Windfall profits taxes are a horrible idea for a ton of reasons. They distort the economy, undermine investment, and are justified for purely punitive reasons. They can’t reduce prices for obvious reasons: taxing companies merely transfers profits from the company to the government. It’s not some magical transfer of wealth from companies to consumers; it’s a transfer of wealth from companies to the government.
Not to mention that Exxon and the other oil giants aren’t hoarding profits–that money goes into the retirement and investments accounts of its shareholders. Taking money from Exxon is actually just taking money from future investments in oil production and from the retirement accounts that we all count on.
Larry Summers–who warned early on that Biden’s policies would lead to raging inflation–questions the logic of Biden’s threats.
If it is a fairness argument, I don’t quite follow the logic since even with the windfalls Exxon has underperformed the overall market over the last 5 years.
— Lawrence H. Summers (@LHSummers) November 1, 2022
Summers, though, makes a fundamental error in that first tweet: he assumes that Biden & Co. actually want more investment in energy production, while the opposite is the case. Increasing investment in oil and gas production makes sense from an economic perspective, but Biden’s cohort are utterly unconcerned about the economy except with regard to how it impacts their political prospects.
That’s why they are pursuing policies that simultaneously deplete our Strategic Petroleum Reserve–to temporarily reduce gas prices to moderate losses in the midterms–while simultaneously strangling investment in oil and gas production, and refinery production as well. They want prices to rise because they want to destroy the oil and gas industry. They haven’t even made a secret of it. Here’s a bunch of Democrats–including Energy Secretary Granholm–singing about keeping oil in the ground:
During the campaign Biden said that oil companies not only would lose the ability to expand drilling for oil and gas, but their ability to drill at all would end if he got elected. That’s a tall order, of course, but we keep on assuming that was hyperbole. What if it isn’t?
Lots of other people are out there arguing–rightly–that windfall profits taxes don’t work to lower prices or increase supply. But few seem to consider the fact that this may indeed be the point. With a windfall profits tax the government seizes a bunch of money–and no Democrat could say no to seizing money–and also accelerates the demise of the oil industry.
For a Biden Administration that is a win-win.
The losers? Every one of us.