Democratic presidential candidate Barack Obama sought to tap into Americans' anxiety over high gasoline prices by pledging to seek a windfall profits tax on U.S. oil companies if elected.
"I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills," the Illinois senator said on Monday according to Reuters.
On Tuesday, the big oil companies with the help of Senate Republicans showed the nation who's boss. The Senate slapped aside an energy package that would have imposed a 25% tax on unreasonable profits on the five largest oil companies who squeezed a staggering $36 billion profit out of consumers pockets this first quarter, it would have given government the leeway to address oil market speculation, opened the way for antitrust actions against the OPEC oil cartel (the forever oil lobby and administration stymied NOPEC legislation) and made energy price gouging a federal crime.
In doing so, Congress has once again shown how out of touch it is with the feelings and desires of its constituents for forceful action. And once again this administration, together with the oil lobby, has been the cheerleader for the vested and powerful interests of the oil industry.
Perhaps one word could change this, making opposition to the remedial steps proposed seem so self-serving that even the oil industry's most ardent supporters in our government and administration would be shamed into being supportive. Instead of calling it a "Windfall Profits Tax," calling it simply, correctly and informatively, a "Cartel Profits Tax."
Because in essence, that is what it is. It is a price for oil and in turn gasoline, determined by the collusionary and anti-competitive actions of the Organization of Petroleum Exporting Countries (OPEC) who are willfully withholding significant quantities of oil production from the world market in order to artificially raise the price of crude oil. Their actions contravene American law and the precepts of the World Trade Organization (WTO). Yet, because of sovereign immunity they are able to sidestep our courts and our laws. This, while their actions have a powerful impact on the price of oil and the profits made by oil companies. The same oil companies who continually talk to us about prices and profit margins being a reflection of the market's free hand of "supply and demand," knowing full well that the hand of supply is a grotesque and adulterated grip of OPEC manipulation.
It is OPEC's collusion that is a primary cause of oil's price escalation. Our oil companies are piggybacking on OPEC's actions to ever higher profits, profits unearned in a competitive free market sense, but profits that are simply the fallout of a cartel's supply and price manipulation. The question needs be asked, since we are paying the end price at the pump and the heating oil tank, do those artificially created oil profits really belong to the oil companies or the nation as a whole?
The oil companies, unlike industries that create products that broaden the landscape and enhance lives, are simply bystanders adding little or nothing to their product line or the general welfare. They are merely the toll collectors for ever higher cartel induced oil prices. One could even suggest their function, given the misinformation they propagandize on so many aspects of the oil market hoping to anesthetize our reaction to the choke hold of the industry and its OPEC brethren on our pocketbooks, and our national security that their contribution to the nation's well being is far more negative than generally understood.
Calling it a Cartel profits Tax would not only draw the lines more clearly and accurately, but begin to make Americans understand what this oil game is all about. And at the risk of being banal, "knowledge is power."