Archive for the 'Barack Obama' category

Obama’s Windfall Profits Tax, and Some Facts From the WSJ

Aug 04 2008 Published by under Barack Obama, Candidates, Craziness, Democrats, Elections, Government, Pandering, Political Parties, Politics, Taxes

Obama on Friday proposed a return to the good old days of Jimmy Carter’s energy policies by suggesting a windfall profits tax on oil producers.

The new Obama ad also pushes his proposal to revive a windfall profits tax on energy companies and asserts that McCain favors tax breaks for the oil industry.

“A windfall profits tax on big oil to give families a thousand-dollar rebate,” an announcer in the ad says.

Obama would use the tax to fund $1,000 emergency rebate checks for consumers besieged by high energy costs.

Congress enacted a windfall profits tax in 1980, during an earlier era of high oil prices, but repealed it in 1988 amid concern it discouraged domestic oil development. Last year, the House approved $18 billion in new taxes on the largest oil companies, but Senate Republicans blocked them.

And thank goodness they did. The windfall profits tax is a tremendously stupid idea premised on the fact that Americans want to take out their anger on someone. But a little digging provides more than a few examples of others that should be taxed. The Wall Street Journal today, helpfully, has a little list and some fact behind the “windfall” lunacy.

What is a “windfall” profit anyway? How does it differ from your everyday, run of the mill profit? Is it some absolute number, a matter of return on equity or sales — or does it merely depend on who earns it?

Enquiring entrepreneurs want to know. Unfortunately, Mr. Obama’s “emergency” plan, announced on Friday, doesn’t offer any clarity. To pay for “stimulus” checks of $1,000 for families and $500 for individuals, the Senator says government would take “a reasonable share” of oil company profits.

Exactly the problem. Who gets to define this ridiculous idea? Apparently, Dick Durbin.

Dick Durbin, the second-ranking Senate Democrat… recently declared that “The oil companies need to know that there is a limit on how much profit they can take in this economy.”

Ok, maybe the concept of capitalism has changed since I studied economics in school, but I don’t recall “there is a limit on how much profit you can take” being part of the economic formula. Let’s assume it is, however. Exxon should surely pay its share, right?

Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion.

That’s right, Exxon paid more in US taxes than it made in the US. Quite a bit more. You see, Exxon is a company that operates globally. It’s sales are global. So we actually see a US company taking money out of the hands of foreign nations, and depositing them into the hands of the US government. Now the Democrats in the US government want to take more money from around the world and spend it on us.

However, we’re not tasked with addressing that fact. We need to figure out what qualifies them for paying such a ridiculous tax. Since they’re entire US revenue already goes to taxes, maybe we can use some other metric to justify the windfall tax.

Maybe they have in mind profit margins as a percentage of sales. Yet by that standard Exxon’s profits don’t seem so large. Exxon’s profit margin stood at 10% for 2007, which is hardly out of line with the oil and gas industry average of 8.3%, or the 8.9% for U.S. manufacturing (excluding the sputtering auto makers).

If that’s what constitutes windfall profits, most of corporate America would qualify. Take aerospace or machinery — both 8.2% in 2007. Chemicals had an average margin of 12.7%. Computers: 13.7%. Electronics and appliances: 14.5%. Pharmaceuticals (18.4%) and beverages and tobacco (19.1%) round out the Census Bureau’s industry rankings.

None of those industries are being asked to pony up… So that can’t be it… Maybe it’s growth based…

In a tax bill on oil earlier this summer, no fewer than 51 Senators voted to impose a 25% windfall tax on a U.S.-based oil company whose profits grew by more than 10% in a single year… This suggests that a windfall is defined by profits growing too fast. No one knows where that 10% came from, besides political convenience. But if 10% is the new standard, the tech industry is going to have to rethink its growth arc. So will LG, the electronics company, which saw its profits grow by 505% in 2007. Abbott Laboratories hit 110%.

If Senator Obama is as exercised about “outrageous” profits as he says he is, he might also have to turn on a few liberal darlings. Oh, say, Berkshire Hathaway. Warren Buffett’s outfit pulled in $11 billion last year, up 29% from 2006.

The fact is, as the WSJ article points out, the idea of a “windfall” profits tax is ridiculous. It could be assessed against any company in America for any number of reasons. It’s simply another way for big government bureaucrats and politicians to redistribute wealth in America. Since Exxon’s US taxes already exceed its US income, in this case, it’s actually a way to redistribute wealth TO America.

That should make Obama’s European fans happy, huh?

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My Personal Experience With Republicans and Racism

Aug 01 2008 Published by under Barack Obama, Candidates, Democrats, Elections, John McCain, Political Parties, Politics, Race, Republicans, Society

With all the discussion of “Republican racism” taking place as a result of Obama’s claim that McCain’s “risky” adjective is based on looks, I thought I’d weigh in. I have been involved in GOP politics for 15 years, and in that time I have never – not once – been involved in a discussion of an opposing candidates race and how to exploit it.

Now the corollary to that is the number of election cycles in that time where I have seen Democrats throw out the racism charge as a way of shoring up their support. On that metric, the Democrats are batting .1000.

I cannot speak to what the GOP may have done in the 70s and 80s because I wasn’t there. I can, however, safely say that every conversation I have had about race in campaigns since 1994 was either a) how the Democrats were exploiting race at our candidates expense and b) how we write copy, produce ads, and develop messages with the specific goal of not providing an opening that let’s them do that.

From everything I have seen, the GOP is obsessively concerned with “not” using race as an issue. That’s not to say that the random nut doesn’t do something stupid, but there will always be examples of nuts saying and doing stupid things. That does not equate to the sustained campaign of racism the Democrats allege.

All of the evidence I have seen of systemic abuse of race comes from the other side, and their attempts to exploit “racism” not “race” for political gain.

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Barackbook: Credit Where Credit Is Due…

Jul 29 2008 Published by under Barack Obama, Candidates, Elections, Politics, Republicans, The Internet

I have been a pretty harsh critic of the RNC and its Internet operations. I have argued for some time that the RNC really doesn’t foster a sense of creativity or innovation. While I still maintain that is generally true, I have to admit I really like their latest project – www.barackbook.com.

The idea is very good. Facebook captures the interconnection of people, so how better to demonstrate Obama’s connection to some really shady people than a FB parody. It’s not quite an exact rip-off of Facebook’s profile page, which would have been easy enough to do, but I suspect they were trying to make it different enough that they wouldn’t get sued (friggin’ lawyers!).

Some might argue that mocking Facebook is a bad move given that FB co-founder Chris Hughes is running my.BarackObama.com. It may call attention to the fact that Obama has attracted some big tech names to his side. I disagree.

I think the message is compelling, and I think the connection between Obama and FB really won’t get much traction.

The only real critique I have of the effort is the relative inability to spread it around. I would suggest to Cyrus and company, that they add an option in the upper right to “Add Friends”, and provide the opportunity for visitors to virally promote the site. Regular Facebook users would likely click on the link just to see what it does.

Update: Thanks to Paul Rodriguez for pointing out that I eff-ed up the link. It works now. And thanks twice for also pointing out my screwed up title… I really need to stop posting on auto-pilot.

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The Bush Administration’s Lost Opportunity

Jul 28 2008 Published by under Barack Obama, Democrats, Elections, Government, John McCain, Politics, Republicans, War

This is a little late, but I was out on travel last week and didn’t have much time to sit and put thoughts together. As I watched Obama trek through the Middle East and Europe last week, a remarkable thing happened. The Iraqi Prime Minister gave the Bush Administration the greatest gift it could have wanted – a way out of Iraq immediately and under the Administration’s terms.

In January of 2005, President Bush was asked if we would leave if the Iraqi government indicated it wanted us out. His reply? “Absolutely. This is a sovereign government. They’re on their feet.”

Last week, when Nouri al-Maliki announced his support for Obama’s withdrawal timetable, and signaled the Iraqi people were ready for us to leave, the Administration had an opening to live up to those words. The Administration should have immediately issued the following statement:

Today, Prime Minister Nouri al-Maliki announced the desire of the Iraqi people to see a US withdrawal. We have always stated that the US is operating in Iraq only as long as the Iraqi government requests our help. We now see the Iraqi government requesting our departure and we will respect their wishes.

I have asked our military advisers to prepare a plan for the immediate withdrawal of US troops, and I expect to see 50% of our troops stateside within the next six months with a full draw down to be completed by the end of 2009.

This would have done three things. First, it would have taken withdrawal off the table as a political issue the Democrats could demagogue. Second, it would have lived up to the word of the Administration that they would leave when the Iraqis asked. Third, it would have completely deflated one of two issues that will weigh heaviest on the general election – the other being the economic turbulence.

For McCain, it would have offered a chance to shift to support withdrawal without being seen as a flip-flopper. He could simply say that he, too, agrees that the Iraqi move toward self-determination is the final condition for US withdrawal. Having met that, the US will honor its obligation and remove its troops.

Having missed this opportunity, both McCain and the Republicans have a problem in that we are now the occupying force that so many have alleged. If we insist on staying, despite clear statements from Iraqi leadership that they are ready for us to leave, the GOP is in the unfortunate position of having to justify our continued presence in a country that has said they want us out. That’s a much worse position to be in for the general election than simply supporting an unpopular war.

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Identifying Progress, No Matter How Small

Jun 11 2008 Published by under Barack Obama, Bloggers, Candidates, John McCain, Politics, The Internet

On this blog, I have spent considerable digital ink discussing the things the GOP is doing wrong, and calling out the more egregious acts of folly in which the right’s infrastructure engages.

For my inaugural post at The Next Right, I thought I’d take a closer look at some of the incremental steps I see in the right direction. A recent e-mail exchange with a colleague pointed out one such item I had overlooked – John McCain’s “McCain Report”.

While I still must point out some of the things I find awkward about McCain’s blogs (not the least of which is that he has two of them that seem to compete with one another), I will note that Goldfarb’s content seems to be vastly superior to what is ostensibly their flagship blog – titled simply the “McCain Blog”.

The McCain Blog is largely the sort of press release and dull e-mail fodder we’ve come to expect from campaigns. It recaps the latest rally and pimps “new eco-friendly items” available in the McCain store. It gets updated every few days. The one upshot is they do allow discussion.

Goldfarb’s McCain Report, on the other hand, is actually good. It’s not full of PR fluff and cheerleading. It’s updated several times a day and it contains substantive material. It is what campaign blogs should be (save for the fact that McCain should occasionally author posts, which he so far has not).

Take one recent piece triggered by a Ben Smith item in the Politico:

As Ben Smith reported yesterday, the Obama campaign recently brought Jason Furman on as a senior economic advisor. Smith notes that Furman wrote a lengthy defense of Wal-Mart in 2005, titled “Wal-Mart: A Progressive Success Story.” In it Furman denies that Wal-Mart is suppressing wages, or exploiting their employees. The fact “that more than 1.3 million Americans work at Wal-Mart demonstrates that its compensation is at least as good as the alternatives,” he says. And he adds that ‚Äúthe available data is consistent with the premise that Wal-Mart pays wages that are comparable to the retail sector.‚Äù

His new boss takes a different view. In 2006, Obama told Fortune that “Wal-Mart is making enormous profits, and yet it has chosen to go with low wages and diminished benefits.” And in 2007, Obama told union members that he won’t even shop at Wal-Mart because of their exploitation of American workers. Has Obama moderated his views on Wal-Mart or will Furman and he just agree to disagree?

That is far from the typical piece on the campaign’s other blog:

Today, John McCain addressed the threat of global climate change and outlined his strategy to lead America to meet its obligations as a steward of this planet. The centerpiece of his plan is a market-based system designed to curb greenhouse gas emissions, mobilize innovative technologies, and strengthen the economy.

Be sure to watch the newest tv ad called, “A Better Way,” then click here for more information on the McCain Plan.

I’m actually very pleased to see the McCain camp doing something well. In fact, what impresses me most is the superior quality of the McCain Report when compared to the Obama blog.

Senator Obama released the following statement today in response to the news of the trade deficit increase:

Today we learned that the trade deficit jumped to its highest level in 13 months. This is not an accident. This is yet another sign of the failed economic policies of the Bush administration that John McCain seeks to extend – policies that reflect unprecedented fiscal irresponsibility and borrowing from abroad. Rather than get America’s fiscal house in order, Senator McCain is proposing $300 billion more in tax breaks and loopholes for big corporations and the wealthiest Americans, and he hasn’t explained how he’d pay for them. Just this week, John McCain reaffirmed his commitment to special interest-driven economic policies that will widen the trade deficit, but won’t help American automakers secure fair treatment in South Korea, and won’t ensure that China stops devaluing its currency and tilting the playing field against American workers. As President, Barack Obama will stand up for fiscal responsibility by restoring fairness to our economy, investing in a renewable energy future, and adopting a trade policy that serves the interests not just of multinational corporations but of America’s hardworking families.

You can learn more about Barack’s stance on trade here.

That is a stark contrast. The Obama team (vaunted as they are for their superior web skills) is running a dry boring blog, while McCain’s team have at least begun to get it. It’s nice to see.

(As a side note, I’d like to offer two suggestions to Team McCain. First, look into search engine friendly urls. Second, optimize the meta tags on your blog posts to actually include the specific content of the post. Especially with this new stuff critical of Obama, it’s going to be important that people can actually find it.

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