Obama Drops Windfall Profits Tax

In an act that further proves that Obama believes there is such a thing as too much success he decided to drop his famed windfall profits tax proposal.

Now, right now you might be saying “But CP (College Politico), dropping a proposed tax is a good thing and encourages success”. To which I would reply “yes, awesome and intelligent reader, that is true but its not the fact that he dropped the tax proposal which proves he thinks a person or company can be too successful but, rather, its the reasoning behind it.

You see, Obama has decided to drop the tax not because Oil companies have lowered their profit margins but instead because the price of oil has fallen below $80 a barrel.

So, while oil companies are still making the same percent profit they were when oil was at $140
a barrel somehow their profits are no longer considered “windfall”. In other words, oil companies are operating in the exact same fashion they were when Obama called jumped on the “windfall” tax bandwagon but somehow they were taking advantage of us then and now they aren’t.

Right, I think I got it now… oh wait, I’m sorry, I can’t understand it because it is absolutely absurd!

Of course the windfall profits tax was always absurd because the oil industry has one of the smallest profit margins (about 8%) of any industry in the world (I’ve seen reports that Google has up to a 50% profit margin for some of its online advertising but nobody is calling for a Google windfall tax). And it would still be absurd even if the oil industry had the largest profit margin because the industry is not a monopoly but is made up of many competing companies and, so, if people choose to buy from a company with a 50% profit margin instead of the company with a 10% or 5% profit margin how is the company at fault? If customers are willing to pay the price set by the seller then the seller cannot be at fault.

In fact, the only way a seller can get away with price gouging and windfall profiteering is if they are monopolies devoid of competition. And, furthermore, the only way a monopoly can form is if the government either allows it to or, and this is far more likely, actively creates it. So, if Mr. Obama is truly concerned with “windfall” profits he ought to direct us away from our current slide down the socialist slope and back towards a steadfast commitment towards free market capitalism.

UPDATE: Hot Air and Malkin chime in on this issue with quite interesting points

It’s the end of the world! Oh wait…

No its not.

Not even close.

Yea the 778 point drop in the Dow is terrible, its even the biggest point drop ever according to CNN.

But that sure as heck doesn’t mean we are headed for another great depression.

Consider this, while the 778 point loss is the biggest point loss in history it is only about a 7% loss. Compare that to the stock market crash of 1987 where there was a 508 point drop which accounted for a massive 22.6% loss and there was no long drawn out depression which followed that incredible crash was there?

But, even beyond the crash of 87, today’s crash is relatively small in comparison with other market troubles of the past. After all, the 7% dropped we encountered today is only the 17th biggest drop of all time. This isn’t something that should keep you up at night, at least not as it stands now. Especially since this will most likely be sorted out in less than a week.

We should all know what is going to happen by now. It’s really quite simple and foreseeable. There will be news that another bailout bill is on the way, in fact there already is news of that, and the markets will regain some, if not a large amount, of their losses back. The bill will eventually pass since it doesn’t truly benefit either party to let these problems linger and that will reassure the markets and they will stabilize. Things won’t be good but they will be bearable again.

UPDATE: Oh look… the world isn’t coming to an end. Oh hey… what’s this? A stabilizing rebound of over 300 points? Who could’ve seen that coming?

Congress finally gets oil drilling right, by doing nothing.

It took forever but Congress has finally caved and will not stop new drilling for off-shore oil.

Good news I’d say.

But, of course, as anybody who knows anything about government can tell you, there is still a mile of red tape to get through before anybody can actually go and actually drill for oil offshore. The biggest problem is in getting congress to pass a revenue sharing bill which cuts the states in on the money that drilling will enevitably bring in. Until then its doubtfull that the states will allow any drilling…

But I’m hopeful.

After all this is a winning issue for the Republicans and a loser for the Dems so the Republicans will push this as hard as they can until its settled and the Dems, as evidenced by the surrender on the drilling ban, simply can’t afford to fight back too hard.

So, as I said before, good news.

P.s. I can’t wait to see what this does to oil prices