Democrat bill would set up a “Reasonable Profits Board” to regulate oil profits
It might sound like something you would read about in Atlas Shrugged–the Anti-Dog eat Dog Bill or the Equalization of Opportunity Bill–but sadly this idea of creating a “Reasonable Profits Board” to gain greater control on oil industry profits is being introduced by six Democrats in the House. In case you were wondering, the six Democrats are; Dennis Kucinich, John Conyers Jr., Bob Filner, Marcia Fudge, Jim Langevin, and Lynn Woolsey.
The bill would create this board which would be charged with implementing a “windfall profit” tax on the oil companies, up to 100%, after they reach what this unelected board (the three members would be chosen by the president) decided was a reasonable profit. However the bill doesn’t define what a reasonable profit is, that would be left up to the three member panel. And the money will then be spread around by the government and used to invest in alternative energy.
What could possibly go wrong with this plan? Think Solyndra, SunPower, LightSquared, Fisker, Beacon Power, BrightSource, Solazyme, and Tesla–all companies involved in the Solargate scandal and all companies with ties to Democrat donors which happened to receive billions of dollars in stimulus money. I think we can reasonable expect the same in this instance.
Remember Barack Obama once said that at “some point you’ve made enough money” and now Democrats are moving to set up a board which would tell oil companies when they made enough money and who doesn’t think that this idea will spread into other industries over time until we get to the point where an unelected panel is deciding not only how much money they can make but also how much product a company can produce, what they can produce, and how much they can charge for that product?
What type of person do you think Barack Obama would place on this board? I think I know who his first nominee will be:
America's Watchtower 
I find government profits reaped at gunpoint from the People to be wholly unreasonable.
These Congressional inquisition-style hearings, where these elitist, gasbag, peacock elected officials get to sit up high and browbeat citizens and berate them is wholly un-American. It reminds me of the Stalinist show trials of old. Seeing these pigs in Congress mouth off to citizens is not too unlike how the Operation Valkyrie conspirators were tried in Nazi Germany.
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Amen brother!
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This of course is a foil that would ion the unlikely event of being implemented, most likely morph into a further control of profits of all businesses engaged in free market enterprise.
The solution to runaway oil profits are the American people. As long as the bureaucrats and and their masters keep us from exploiting our own energy resources we will be held hostage to the greedy manipulation by the oil companies who profit from the price squeeze.
I would further add that quite possibly the oil companies are actually satisfied and further complicit, for the moment, in this whole affair. The idea that such a control of profits would ever happen is laughable and nothing more than a holding distraction for an economically battered public.
A stretch? I don’t think so. The oil companies are raking in, along with their desert dwelling allies, untold profits that to the critical mind, point to the idea of that complicity.
Barack Obama, his merry band of socialist progressives and a corrupt Congress are all, I believe, in some way part of the scheme. A conspiracy – why not?
Politicians from both parties are funded, ie bought and paid for, by Wall Street bankers and the oil industry who among others, fund the K Street lobbyists in D.C., those predators that roam the halls of government like an out of control herpes outbreak.
Unfortunately the American people have had it pounded into their skulls that conspiracies are nothing more than fancy-full paranoia on the part of those who are always questioning the motives of the power elite.
However, history has shown us time and time again that conspiracies are part of the fabric of those in power. Just my opinion of course….WM
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It is unlikely that this legislation goes anywhere, but it does offer us an inside as to the mindset of the Democrat party and I do not think it is a stretch to think that if this was passed that it would be extended into other companies and their profits to the point where the government controlled product and production and for that it must be stopped at all costs.
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This is very troubling, Steve. One thing to consider, government control begets more government control. If this becomes law, where will it lead and where will it stop?
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Exactly Larry, if the government is allowed this control of the oil companies there is no doubt that it will not end there, and will in fact be extended into other companies.
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Do you know how many stupid ideas are embodied in proposed legislation every year? Why, just last week, there was a bipartisan effort to give the government the authority to shut down a website it anyone entered a complaint that it was violating copyright. No due process, and not even any requirement that the complaint be accurate. If we were to analyze every piece of proposed legislation for its stupidity, productivity in this country would come to a screeching halt.
Fortunately for us, the majority of such legislation never makes it out of committee.
Anyway, there are two things that come to mind. First is the obvious – the Constitution doesn’t define our economic model, and it’s possible for us to become socialist, communist or capitalist without amending it. (We have a capitalist model that’s moderately regulated.) Bills like this, if passed, would definitely push us a little more to the left.
On the other hand, let’s keep in mind that some of the largest and most powerful companies in this country have operated under “reasonable profits” regulations for decades now, and have prospered, returning reliable returns to their investors. Utilities are routinely regulated at the state level in this country for the public good, protecting them from some of the extremes of the free market by guaranteeing their profits while protecting the public from rapacious price-gouging and, yes, the desire to make windfall profits. They are generally considered solid investments and make up a good portion of many retirement plans.
I have long advocated the regulation of energy companies as public utilities. This legislation’s flaw is that it attempts to impose some of the regulation of public utilities without any of the benefits.
Here’s to great day – take good care and may God bless us all!
TGY
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You are talking about SOPA and PIPA and while I didn’t get a chance to write about those bills before they were killed they are dangerous pieces of legislation which would have opened the door into government regulation of the internet. Bloggers using copyrighted material–such as this blog–who use quotes from other articles could have been targeted even if we provided the original link to the source material. This was an attempt to get a foot in the door of internet regulation and while I am glad this issue is dead I wonder how long it will be before it is back. And the fact that this had the support of both parties before the “blackout” is equally troubling, if not moreso.
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I could agree with a board of this kind but targeted towards trial Lawyers.
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Or obscene government profits!
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This bill should pass only after one targeting George Soros’ reasonable profits is enacted!
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It is interesting that people who make a profit for providing a product that the American people want are targeted, meanwhile people like Soros who make their money doing nothing that helps the people are given a free pass–unless your name is Mitt Romney, that is.
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The price of oil has much to do with the value of our dollar. Wait until inflation sets in if we are still dependent of foreign oil. As percent of investment, it falls rather low compared to other Industries.
The most recent data compiled by the American Petroleum Institute indicate that U.S. oil and gas companies made an average of 9.5 cents on every dollar of sales in the second quarter of 2011, compared with 10 cents per dollar of sales for all manufacturing.
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The problem with the 9.5% profit margin of big oil is that it’s based on all costs, including the volatile cost of the raw oil. If oil prices go up, the oil companies don’t simply pass along that increase, a perfectly legitimate thing to do. Instead, they charge a profit on that increased cost. We all understand that if oil prices increase, gas prices will do likewise, but it’s frustrating that if oil prices increase by 10%, gas prices will increase by 11%.
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Bad idea, of course. This is the way to turn the United States into the Dark Ages… no money for oil development investment, no expansion of the energy sector, a loss of jobs. Just look at the terrible energy sector conditions Hugo Chavez created in his nation when he nationalized the oil industry.
The answer is never more Government.
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But that is what Obama wants, isn’t it? He said his policies would ensure that energy prices skyrocketed and he is doing all that he can to make good on that promise.
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Agreed, but if “obscene profits” are the issue why not sanction Pepsi or Coca Cola because they make more profit per gallin than Exxon or ARCO does.
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Oh, there are plenty of items on the marketplace that generate far more than 8% or 9% profit. Like Pepsi and Coke, though, they’re not necessities.
Look at what happened to California a few years back – unregulated energy companies, Enron among them, almost succeeded in bankrupting the state, and as I recall there were rolling blackouts not because of a shortage of energy, but a shortage of money.
As I’ve stated earlier, I think it’s imperative that we regulate energy companies as public utilities, either on a state or national basis, as appropriate, guaranteeing them a certain level of profit to reassure investors, but limiting that profit to reasonable levels (to be determined in a manner consistent with how the current public utilities boards of all 50 states currently determine such things).
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Maybe there should be a “Reasonable Government Spending Board” or a “Reasonable Taxation Board”? Who in the h*** do they think they are for pretending to be so ostentatious as to think they know what a reasonable profit is?
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Now those are two boards that I would agree with!
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A bill put forward by those that have benefited from oil production their whole lives. Now as they age out, it’s bicycles and windmills for the rest of us.
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You guys really don’t get it, do you?
Utilities are regulated because they provide something the public needs, not just something there’s a market for. They’re guaranteed a profit no matter how bad times are, no matter how bad sales are, and no matter how poorly they’re managed. In return, their ability to set prices and profits is severely regulated by the government. One of the reasons for this is to ensure that on the whole, nobody gets priced out of those markets.
One of the reasons utilities like gas, electricity and telecom are regulated is the cost of building out an infrastructure, which has no real parallel when it comes to the delivery of gasoline, because the consumers of gasoline are not static. However, I think the product’s status as a necessity is sufficiently strong to justify not nationalizing the oil industry, but making the gasoline industry a nationally regulated utility.
Have a wonderful week. Take good care and may God bless us all!
TGY
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There is little chance of this bill becoming law, but what I fear most about this bill is if implemented how far will it eventually go? I can see a day where private businesses are held accountable to the federal government as they expand the reach of this bill.I don’t think that is an unreasonable fear as we know that once the government gets a foot in the door they always move to expand their reach.
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Ayn Rand was a prophet(ess). Read Atlas Shrugged, or watch the movie.
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We’ll probably never know whether Rand herself was a sociopath; there’s little doubt that she held such people in high esteem.
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What I meant by that was the picture she painted of the governments control of every facet of our lives. Personally she may have been a vain and selfish bitch. As a seer of the future, she was pretty spot on.
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Sorry, I disagree. If you want a picture of government control of people’s lives, go check out North Korea.
We live in a land we share with over 300 million other people. It’s not the same as when 5 million of us shared the entire Eastern seaboard, a time when if you didn’t like what was going on you simply moved a few miles west and built a place to live. Our society has become so sophisticated that without regulation to the extent that we do have, we’d be living in chaos.
Don’t misunderstand – I also am concerned about government intrusion in our lives, especially our personal lives, but when we all agree that the mission of a capitalist is to make a profit (a perfectly respectable thing), we must be watchful of the lengths to which he will go to accomplish that mission, and regulate his behavior when necessary.
I get the sense that in Rand’s perfect world, we simply trade government control of our lives to corporate control of our lives. In my perfect world, the business world is kept in check by a watchful government, and the government is kept in check by a watchful citizenry.
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Rand’s supposed sociopathism also informed her writing – her heroes are the rugged individualists who, like the real-life sociopaths she admired, do only what they want to, when they want to, without concern for those around them or for the lives they might affect. There is no golden rule in Rand’s world; rather, it’s “Do unto others before they do unto you.”
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