Reuters: Obama Backs Off Promise to Pass Windfall Profits Tax on Big Oil

by: David Sirota

Wed Dec 03, 2008 at 12:33


Off the Reuters wire:

CHICAGO/WASHINGTON (Reuters) - President-elect Barack Obama is not planning to implement a windfall profit tax on oil companies because prices have dropped below $80 a barrel, an aide said on Tuesday...

Obama, who signaled early in his campaign for the White House that he would take an active approach to oil markets as president, had planned to use the revenue from a windfall profits tax to fund a tax rebate for low- and middle-income families struggling with high energy prices.

Between this move and the move to wait to repeal the Bush tax cuts for the wealthy, it seems like the Obama team is buying into the right-wing frame that raising any taxes - even those on the richest citizens and wealthiest corporations - is bad for the economy. Of course, that frame is debunked by history. And while sure, it's OK to rack up deficits so as to spend our way out of the economic crisis, it's sorta silly to ignore the tax moves that could be implemented to limit those deficits where possible.

Oh, and one last thing - if oil prices are down and oil industry profits are truly down, what's the harm in passing a windfall profits tax? Even if you buy the right-wing nonsense about a windfall profits tax "hurting the industry" or "hurting the economy" when it is applied, if there really are no windfall profits to tax, then it won't be applied.

That's what a windfall profits tax really is - a safety valve regulation against profiteering, and one that can raise needed revenues when profiteering occurs. If there is supposedly no profiteering occurring, then what's the supposed harm? There is none even if you ignore history and believe taxing the wealthy/big corporations automatically hurts an economy. That is, unless you are ready to go down another right-wing rathole and argue that a windfall profits tax will somehow prevent energy companies from more energy exploration. But, then, if you are that far out on the fringe, then I guess your not interested in any facts whatsoever...

David Sirota :: Reuters: Obama Backs Off Promise to Pass Windfall Profits Tax on Big Oil

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Reuters: Obama Backs Off Promise to Pass Windfall Profits Tax on Big Oil | 73 comments
oil (4.00 / 5)
Oil prices are at the lowest point in several years...I don't see the big deal in discarding the windfall profits tax since in all likelihood the oil companies will not be making windfall profits this year.
but even if it is enacted (4.00 / 2)
if they don't make a windfall they don't get taxed, so why is it important not to enact it?  The only reason the oil prices are low now is because they are scared of the Democrats.

once we get the republicans back it will shoot up again.

[ Parent ]
double edge (4.00 / 2)
The argument cuts both ways.  Why discard it if the oil companies won't be making windfall profits this year?  The oil industry certainly won't care.
[ Parent ]
discard? (0.00 / 0)
Obama wouldn't be discarding the windfall profits tax since there is not one in the first place. Instead, he's not going to aggressively push the idea. A prez has a certain amount of political capital he can spend, I see no reason to use it on a windfall profits tax when we wouldn't be seeing any revenues from that tax anyway (since there wouldn't be a windfall profit)
[ Parent ]
i meant (0.00 / 0)
discard the idea.
[ Parent ]
You were the one that (0.00 / 0)
used the word discard.

...I don't see the big deal in discarding the windfall profits tax since in all likelihood the oil companies will not be making windfall profits this year.

by: boomersun @ Wed Dec 03, 2008 at 12:39

MD was just responding.

[ Parent ]
Krugman and others have said that in the middle of a return to Depression (4.00 / 3)
economics the goal should not be the raise taxes. I am going to trust Krugman on this. He said it before Obama's backing off.  This is not a right wing  position. It's one born out of the economics of the moment.

Do you believe we are in the middle of an economic crisis that could leave us in the middle of a depression? Or do you think this is all secretly manufactured crisis designed to 'shock" Americans into right wing frames?

This has been asked here before with no answer, but I would love to know.  

A little of both (4.00 / 6)
We were in the middle of an economic crisis when Obama made these promises. The only thing that's changed is that he now has to deliver on them.

Also, I think it's a little bit of both - it's a crisis, but the specifics of that crisis are also being manipulated:

http://www.huffingtonpost.com/...

[ Parent ]
Do you have a PhD in economics or anyone who runs this site? (4.00 / 1)
How about even finance or some other related subject that would allow you to assess this? Where do the experts on the subject fall into this conversation?

Do you think Krugman and other progressive economists who are terrified by the economic conditions right now are lying or being duped? When Krugman speaks of the return of depression economics- do you think he's exaggerating?

Do you think its possible that Obama has changed his mind on not just this but the level to which he thinks things needs to be turned around? Afterall, it's known that as little as a few weeks ago he was still debating whether to go big or small. FDR or Sustein's (spelling?) approach to politics. Is it possible that he is assessing the true severity, and like Krugman is watching the bottom fall out more and more (including the credit card market which may see a 45 percent drop next year) , the labor market, some of the worse car sale numbers in 25 years, etc)?

What was the principle lesson of the depression era economics , if any, that you would see as applicable to Obama's behavior right now?  

[ Parent ]
Krugman was (0.00 / 0)
actually pretty well known as a neoliberal in the 90s.  It is only recently he has gotten some progressive creds.  Freidman has a phd too.   Classical Economics is not a science.
[ Parent ]
I see. Well, that's an answer. (0.00 / 0)
So the response is to question whether Krugman is a progressive? What about other progressives who also agree with that we are in severe economic crisis? What bout the economic data? Is that just all manufactured to trick you too? I asked do any of you have the credentials regarding the economics issues. Not whether economics is a science. Do you have the ability to assess the economic issues being discussed? Do you have economic and/or expertise in anyway here?  
[ Parent ]
I believe (0.00 / 0)
the middle class and poor need more money, not the dirty extractive uncreative oil industry.
[ Parent ]
Thanks for sharing. (0.00 / 0)

[ Parent ]
It appears Krugman is simply (4.00 / 2)
wrong about Roosevelt not raising taxes on the wealthy.  

According to Steve Kangas's "Timeline of the Great Depression" he raised taxes on the top rate 3 times, between 1932 and 1945.

TIMELINES OF THE GREAT DEPRESSION:

1920s (Decade)

   * During World War I, federal spending grows three times larger than tax collections. When the government cuts back spending to balance the budget in 1920, a severe recession results. However, the war economy invested heavily in the manufacturing sector, and the next decade will see an explosion of productivity... although only for certain sectors of the economy.

   * An average of 600 banks fail each year.

   * Organized labor declines throughout the decade. The United Mine Workers Union will see its membership fall from 500,000 in 1920 to 75,000 in 1928. The American Federation of Labor would fall from 5.1 million in 1920 to 3.4 million in 1929.

   * Over the decade, about 1,200 mergers will swallow up more than 6,000 previously independent companies; by 1929, only 200 corporations will control over half of all American industry.

   * By the end of the decade, the bottom 80 percent of all income-earners will be removed from the tax rolls completely. Taxes on the rich will fall throughout the decade.
   * By 1929, the richest 1 percent will own 40 percent of the nation's wealth. The bottom 93 percent will have experienced a 4 percent drop in real disposable per-capita income between 1923 and 1929.

   * Individual worker productivity rises an astonishing 43 percent from 1919 to 1929. But the rewards are being funneled to the top: the number of people reporting half-million dollar incomes grows from 156 to 1,489 between 1920 and 1929, a phenomenal rise compared to other decades. But that is still less than 1 percent of all income-earners.

1922

   * The conservative Supreme Court strikes down federal child labor legislation.

1923

   * President Warren Harding dies in office. Calvin Coolidge, becomes president. Coolidge is no less committed to laissez-faire and a non-interventionist government.
   * Supreme Court nullifies minimum wage for women in District of Columbia.

1924

   * The stock market begins its spectacular rise. Bears little relation to the rest of the economy.

1925

   * The top tax rate is lowered to 25 percent - the lowest top rate in the eight decades since World War I.

1928

   * Between May 1928 and September 1929, the average prices of stocks will rise 40 percent. The boom is largely artificial.

1929

   * Herbert Hoover becomes President.

   * Annual per-capita income is $750. More than half of all Americans are living below a minimum subsistence level.

   * Backlog of business inventories grows three times larger than the year before.

   * Recession begins in August, two months before the stock market crash. During this two month period, production will decline at an annual rate of 20 percent, wholesale prices at 7.5 percent, and personal income at 5 percent.

   * Stock market crash begins October 24. Investors call October 29 Black Tuesday. Losses for the month will total $16 billion, an astronomical sum in those days.

1930

   * By February, the Federal Reserve has cut the prime interest rate from 6 to 4 percent. Treasury Secretary Andrew Mellon announces that the Fed will stand by as the market works itself out: 'Liquidate labor, liquidate real estate... values will be adjusted, and enterprising people will pick up the wreck from less-competent people'.

   * The Smoot-Hawley Tariff passes on June 17. With imports forming only 6 percent of the GNP, the 40 percent tariffs work out to an effective tax of only 2.4 percent per citizen. Even this is compensated for by the fact that American businesses are no longer investing in Europe, but keeping their money stateside. The consensus of modern economists is that the tariff made only a minor contribution to the Great Depression in the U.S., but a major one in Europe.

   * Supreme Court rules that the monopoly U.S. Steel does not violate anti-trust laws as long as competition exists, no matter how negligible.

   * The GNP falls 9.4 percent from the year before. The unemployment rate climbs from 3.2 to 8.7 percent.

1931

   * No major legislation is passed addressing the Depression.

   * The GNP falls another 8.5 percent; unemployment rises to 15.9 percent.

1932

   * This and the next year are the worst years of the Great Depression. For 1932, GNP falls a record 13.4 percent; unemployment rises to 23.6 percent.

   * Industrial stocks have lost 80 percent of their value since 1930.

   * 10,000 banks have failed since 1929, or 40 percent of the 1929 total.

   * GNP has also fallen 31 percent since 1929.

   * Over 13 million Americans have lost their jobs since 1929.

   * International trade has fallen by two-thirds since 1929.

     Congress passes the Federal Home Loan Bank Act and the Glass-Steagall Act of 1932.

   * Top tax rate is raised from 25 to 63 percent.

   * Popular opinion considers Hoover's measures too little too late. Franklin Roosevelt easily defeats Hoover in the fall election. Democrats win control of Congress.

1933

   * Roosevelt inaugurated; begins 'First 100 Days'; of intensive legislative activity.

   * A third banking panic occurs in March. Roosevelt declares a Bank Holiday; closes financial institutions to stop a run on banks.

   * Alarmed by Roosevelt's plan to redistribute wealth from the rich to the poor, a group of millionaire businessmen, led by the Du Pont and J.P. Morgan empires, plans to overthrow Roosevelt with a military coup and install a fascist government modelled after Mussolini's regime in Italy. The businessmen try to recruit General Smedley Butler, promising him an army of 500,000, unlimited financial backing and generous media spin control. The plot is foiled when Butler reports it to Congress.

   * Congress authorizes creation of the Agricultural Adjustment Administration, the Civilian Conservation Corps, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the Federal Emergency Relief Administration, the National Recovery Administration, the Public Works Administration and the Tennessee Valley Authority.

   * Congress passes the Emergency Banking Bill, the Glass-Steagall Act of 1933, the Farm Credit Act, the National Industrial Recovery Act and the Truth-in-Securities Act.
   * Roosevelt does much to redistribute wealth from the rich to the poor, but is concerned with a balanced budget. He later rejects Keynes' advice to begin heavy deficit spending.

   * The free fall of the GNP is significantly slowed; it dips only 2.1 percent this year. Unemployment rises slightly, to 24.9 percent.

1934

   * Congress authorizes creation of the Federal Communications Commission, the National Mediation Board and the Securities and Exchange Commission.

   * The economy turns around: GNP rises 7.7 percent, and unemployment falls to 21.7 percent. A long road to recovery begins.

   * Sweden becomes the first nation to recover fully from the Great Depression. It has followed a policy of Keynesian deficit spending.

1935

   * The Supreme Court declares the National Recovery Administration to be unconstitutional.

   * Congress authorizes creation of the Works Progress Administration, the National Labor Relations Board and the Rural Electrification Administration.

   * Congress passes the Banking Act of 1935, the Emergency Relief Appropriation Act, the National Labor Relations Act, and the Social Security Act.

   * Economic recovery continues: the GNP grows another 8.1 percent, and unemployment falls to 20.1 percent.

1936

  * Top tax rate raised to 79 percent.

   * Economic recovery continues: GNP grows a record 14.1 percent; unemployment falls to 16.9 percent.

1937

   * The Supreme Court declares the National Labor Relations Board to be unconstitutional.

   * Roosevelt seeks to enlarge and therefore liberalize the Supreme Court. This attempt not only fails, but outrages the public.
   * Economists attribute economic growth so far to heavy government spending that is somewhat deficit. Roosevelt, however, fears an unbalanced budget and cuts spending for 1937. That summer, the nation plunges into another recession. Despite this, the yearly GNP rises 5.0 percent, and unemployment falls to 14.3 percent.

1938

   * No major New Deal legislation is passed after this date, due to Roosevelt's weakened political power.

   * The year-long recession makes itself felt: the GNP falls 4.5 percent, and unemployment rises to 19.0 percent.

1939

   * The United States will begin emerging from the Depression as it borrows and spends $1 billion to build its armed forces. From 1939 to 1941, when the Japanese attack Pearl Harbor, U.S. manufacturing will have shot up a phenomenal 50 percent!

   * The Depression is ending worldwide as nations prepare for the coming hostilities.

           Roosevelt began relatively modest deficit spending that arrested the slide of the economy and resulted in some astonishing growth numbers. (Roosevelt's average growth of 5.2 percent during the Great Depression is even higher than Reagan's 3.7 percent growth during his so-called 'Seven Fat Years!') When 1936 saw a phenomenal record of 14 percent growth, Roosevelt eased back on the deficit spending, worried about balancing the budget. But this only caused the economy to slip back into a recession in 1938.

   * World War II starts with Hitler's invasion of Poland.

1945

   * Although the war is the largest tragedy in human history, the United States emerges as the world's only economic superpower. Deficit spending has resulted in a national debt 123 percent the size of the GDP. By contrast, in 1994, the $4.7 trillion national debt will be only 70 percent of the GDP!

   * The top tax rate is 91 percent. It will stay at least 88 percent until 1963, when it is lowered to 70 percent. During this time, America will experience the greatest economic boom it had ever known until that time.

As I said Krugman has a shaky record.

[ Parent ]
You have a shaky grip on the facts (0.00 / 0)
Krugman never said taxes weren't raised during the Great Depression, he said they shouldn't have been. Specifically, the economy had started to recover around 1938 when FDR got the lunatic idea to raise taxes and cut spending in order to balance the budget, and the economy went into recession again. It took World War II - a massive deficit spending stimulus - to end the Depression.

Get your history right.

[ Parent ]
He raised taxes long (4.00 / 1)
before 1938, in 1932, then long after 1938 in 1945.  There may have been a recession but it doesn't look like it was tax related.  More likely it related to cuts in spending.
[ Parent ]
By 1945 the economy was booming (0.00 / 0)
The Depression was over in 1945 - that's the point in the cycle where you do raise taxes to pay down the debt you ran up doing the stimulus.

And yes, FDR raised taxes several times before WW II, and those increases were mistakes that lengthened the Depression.

Read Anthony de Jesus's comment below and read how Keynesian stimulus works.

[ Parent ]
Were we not in a depression in (4.00 / 1)
1932?  When according to Steve Kangas

The Top tax rate is raised from 25 to 63 percent

How do account for the recovery, after this big increase in taxes on the top rate, which Krugman admits we were in?

[ Parent ]
Again you miss the point (4.00 / 1)
raising taxes was part of a greater problem. Taxes added to it. Your idealogical views are blinding you to what he is saying. He is saying that if you are trying to stimulate the economic engine when its completely stopped- you are not worried about deficit reductions. Your prirmary concern is doing everything possible to push for the economic machine moving forward. No breaks are a good idea. Whether those breaks are taxes, spending cuts, or a lack of fiscal stimulus are  a good idea. ALl of these things are part of what pushes the engine forward.  
[ Parent ]
Nope (4.00 / 4)
He is saying it's not necessary right now because oil prices are low. I am saying that the theory behind a windfall profits tax is a regulatory one - to prevent oil prices from going above a certain limit, without exacting revenue to mitigate against the negative consequences.

Indeed, part of what pushes the engine forward (to use your mixed metaphor) is preventing energy price gouging. Last I checked, simply allowing energy companies to push prices over $100 a barrel without any mitigating taxes isn't good for an economy.

[ Parent ]
The original tax increase occurred in 1932 (0.00 / 0)
according the Krugman, there was a recovery after that.
[ Parent ]
Because the net effect in 1933 was a large stimulus! (4.00 / 1)
Okay, listen: You don't understand the issue, and Sirota is lying about it. I, for one, am not going to get troll-baited into responding to dishonest arguments again.

Good bye.

[ Parent ]
"lying" (4.00 / 1)
Not a single commenter has shown where I am "lying." Please inform us of what is factually inaccurate about this post.
[ Parent ]
Huh? (0.00 / 0)
Is this directed at me?  
[ Parent ]
I am a troll? (0.00 / 0)
Ok whatever...!
[ Parent ]
Ken Lay (4.00 / 1)
Ken Lay has a PhD in economics.  Should we let him assess it?
[ Parent ]
No but the Federal Reserve Bank economist do (4.00 / 1)
And I cited a major recent study by them. Now, if you want to say the Minnesota Fed is unqualified to evaluate the economic situation, by all means - argue that. But don't try to change the subject.
[ Parent ]
I am going to look at the data David (0.00 / 0)
and see whose opinion matches the data rather than my idealogy. I am for the windfall tax idea if its appropriate and the facts warrant it. I m not searching for a reson to be against the windfall.  
[ Parent ]
Great! (4.00 / 1)
You can start by reading all the data in the chapter on energy in Hostile Takeover. Discard me as "an opinion," fine - but don't discard the data.
[ Parent ]
Follow up (4.00 / 1)
this time no questions. Just a point of reality check. The situation economically is day by day growing worse. What was true even when the credit crisis intitally hit is worse now because the tools being used have no worked. So stronger Kenysian tools are on the table. See the post below by Anthony De Jesus discussing the economic versus political/idealogical considerations involved from the lessons of depression era economics.
[ Parent ]
Conflating two issues (0.00 / 0)
Whether credit markets are not function and the bailout is a ripoff has absolutely nothing to do with Obama's Keynesian stimulus plan to prevent a deflationary spiral. Such stimulus requires running a bigger deficit. Until the economy starts growing again, it is self-defeating to raise taxes.
[ Parent ]
Why don't we enact a (0.00 / 0)
war tax on the defense contractors.  They have soaked the public too, and lobbied for the war.  A war tax will discourage them from lobbying for a war we don't need again.
Because... (4.00 / 1)
there's nothing like a war to end an economic recession, just like there's nothing like a centrist Democrat to keep the military-industrial complex in tip-top shape.
[ Parent ]
Put this in the unsurprising category (4.00 / 2)
This along with his anti-NAFTA stance was campaign posturing. (Campaign rhetoric, as he says, gets "overheated."

It is funny, though, so far he seems to be backing off only his most progressive campaign promises.


heh (0.00 / 0)
Yea lets make a fight for windfall tax when there is no windfall available right now! doesn't matter that price of gas has more than halved from when the promise was made and that oil prices have fallen by 100 box! must adhere to rigid idoliology against the right wing ideology no matter what!

it is going to be a rough four/eight years for the ideological pure. Glad the fringes from both left and right will be ignored by obama so they can fret and be linked together and thereby discredited in the process.

[ Parent ]
Hey, we're not pure (2.00 / 4)
We're only going by what Obama promised. How is that purity? He promised things, and now he's reversing his promise. It ain't ideological purity to ask him to fulfill his explicit promises.

What's ideological purity is being somebody who believes everyone should be 100% loyal to the Dear Leader, and not ask questions when the Dear Leader goes back on his promises.

Indeed, that's brownshirt purity you can believe in.

[ Parent ]
asdf (4.00 / 1)
He promised things when the facts were different. Thats reality, facts sometimes change, Iraq is a non issue now where a year ago it was a major issue. gas prices was a major issue just months ago, now it is economics and jobs. His stimulus went up by 5 times compared to his campaign promises and yet you choose to focus on something that is not there anymore (windfall profits)? wonder why. how about he keep his promise and kept his economic package to ~150 billion? since he strictly has to just keep to what he said during the campaign according to purity trolls.

Oh and your posts are 90% negative of obama, if anyone is being a brownshirt with regard to him it is you.

[ Parent ]
I think they will (0.00 / 0)
raise prices again
[ Parent ]
How do you know they won't go up (0.00 / 0)
again?  I repeat this tax doesn't get implemented if their is no windfall, so there no harm in enacting it.
[ Parent ]
Would Paul Krugman disagree? (4.00 / 4)
He recently wrote of FDR and the New Deal:

The effects of federal public works spending were largely offset by other factors, notably a large tax increase, enacted by Herbert Hoover, whose full effects weren't felt until his successor took office. Also, expansionary policy at the federal level was undercut by spending cuts and tax increases at the state and local level.

And F.D.R. wasn't just reluctant to pursue an all-out fiscal expansion - he was eager to return to conservative budget principles. That eagerness almost destroyed his legacy. After winning a smashing election victory in 1936, the Roosevelt administration cut spending and raised taxes, precipitating an economic relapse that drove the unemployment rate back into double digits and led to a major defeat in the 1938 midterm elections.

...

The economic lesson is the importance of doing enough. F.D.R. thought he was being prudent by reining in his spending plans; in reality, he was taking big risks with the economy and with his legacy.

Tax cuts would be a bad idea.  That doesn't mean that tax raises are inherently a good idea.  North is the opposite of south but both are equally wrong if the correct heading is actually east.  Thinking in binary blinds us to other options.  There are good times and bad times to raise taxes.  A Keynesian, probably, would say that this is a bad time.

Things You Don't Talk About in Polite Company: Religion, Politics, the Occasional Intersection of Both

Sirota's not arguing in good faith (0.00 / 0)
That's a solid, substantive response, Anthony, but you're engaging a blogger who isn't interested in arguing the merits. He's simply grasping at whatever slim evidence he can to build a case that Obama is a sellout. He's burnishing the "lefty Obama critic" credential.
[ Parent ]
I have to argue in good faith (4.00 / 3)
It doesn't matter if Sirota is arguing in good faith or if he is really in a frenzied lust for the blood of the rich driven by ideological faith rather than facts.  I have to treat with him in good faith because he represents other people who share his point of view.

My advice to Sirota, however, is that coming off as angry will make it easier for people to marginalize his views and not see him as someone who needs to be engaged substantively.  Being perceived as "angry" hurt Howard Dean in 2004.  It made John McCain less compelling in the 2008 presidential debates.  He comes off as a bit cartoon-y if he is constantly preaching a populist gospel of hellfire and brimstone for the wicked rich as he tries to out-O'Reilly O'Reilly.

Things You Don't Talk About in Polite Company: Religion, Politics, the Occasional Intersection of Both

[ Parent ]
Theoretically... (4.00 / 1)
We may not see "windfall profits" for the oil companies anyway in the next few years, making this point moot.  Of course, I suppose that doesn't necessarily mean implementing it would be a bad idea, but on the other hand is it really worth a fight for something that may potentially be moot in the near future?

Well (0.00 / 0)
Point of the Tax fall profits was to crack down on profits of 100+ oil barrels and provide relief for 4$ a gallon gas to middle class people. Non of the tow conditions are true today. Conditions change and that is the reality. His stimulus plan is now 5 times the plan he talked about in the campaign too (was about $150 million, now in $500mil+), again conditions changes. That is smart policies for better delivering a successful government as opposed to ideologue positioning to fight against the far right conspires.

Oh and on taxes, I trust Krugman and most other economists more than an ideologue. Taxes shouldn't be raised at least for now till they expire since we are in recession.

Love it (4.00 / 2)
The "I trust X" so you're wrong. What a substantive argument, really.

How about I trust Bill Clinton who raised taxes in an economic crisis? How about I trust ironclad recent history, more than I trust any individual economist? In other words, how about I trust cold, hard facts, rather than punditry?

[ Parent ]
Oh lets trust clinton? (0.00 / 0)
The NAFTA loving, job outsourcing evil centersit? I see you pick and choose your allies when it sooths you. Krugman is way more credible than anyone including clinton on economics. Raising taxes in a sever recession is a mistake, Hoover and FDR learned that in a hard way and we should learn from history.
[ Parent ]
Exactly (2.00 / 4)
It's not about individual "allies" - it's about issues. You are exactly right. I don't believe in Dear Leaders. Clinton was right on taxes and wrong on NAFTA. I believe that wholeheartedly because I don't believe Clinton was a Dear Leader who did everything right nor do I believe he was the anti-Christ and did everything wrong.

You see, I'm not a brownshirt like you.

[ Parent ]
Uncalled for (0.00 / 0)
Calling people Nazi's goes way over the line David.

John McCain: Beacuse lobbyists should have more power
[ Parent ]
It's a reference to Al Gore's speech (0.00 / 0)
and a post I did on his warning about digital brownshirts. That's what we have here.
[ Parent ]
How Rovian of you (0.00 / 0)
See? People can call you names, too.

Anyway, pointing that you may not know what you're talking about is not the same as being "digital brownshirts."

[ Parent ]
"not know what I'm talking about" (2.00 / 4)
Fact: Barack Obama made a promise.

Fact: He is now breaking that promise.

Fact: Nobody has explained the economic logic of breaking that promise on an issue like the windfall profits tax (which I have an entire chapter in my first book on).

What about any of this is factually wrong? Where don't "I know what I'm talking about?" Nowhere. What this is is people who don't want anyone questioning the Dear Leader, even on a promise he made.

If we can't question why the Dear Leader is backing off an explicit promise we made then indeed, we get what we deserve.

[ Parent ]
Right.. (4.00 / 1)
You don't want an answer. If you wanted one you would have got it from numerous posters including me in this very thread.
[ Parent ]
Please provide a substantive answer (0.00 / 0)
Where in my post am I factually wrong? What are you "setting straight?" I'm waiting.
[ Parent ]
I'll type slowly so you can understand (4.00 / 3)
Nobody has explained the economic logic of breaking that promise on an issue like the windfall profits tax

It's been explained several times now: We're very close to a deflationary spiral. To counter it, Obama is going to use a massive stimulus package. You don't raise taxes when your goal is to increase the deficit. (And don't tell me it won't be collected because the economy is so bad - that's not an argument for doing it.)

I believe you understand the reasoning very well. You're just pretending not to because you're here to portray yourself as a progressive hero. But you're not, because your goal is to divide people into camps.  

[ Parent ]
Ummm (2.67 / 3)
But the reason that Obama said he's backing off is because there are no windfall profits right now because oil prices are low - thus the tax wouldn't come into effect. That is, if you believe the right-wing frame that raising taxes on the wealthy or big corporations hurts the economy (which I don't and which history shows is not true), you can't argue that frame is happening with a windfall profits tax if you are saying there are no windfall profits now.

So try again. Please answer, within the context of what the Dear Leader is telling us, "the economic logic of breaking that promise on an issue like the windfall profits tax."

[ Parent ]
I don't engage dishonest people (4.00 / 2)
Good bye.
[ Parent ]
Where am I being "dishonest?" (0.00 / 0)
I truly don't understand. Read the Reuters article. Read the comments from Obama aides. WHERE AM I BEING DISHONEST?
[ Parent ]
You might not be a brownshirt (4.00 / 1)
See hoover and FDR on taxes, Clinton's recession was no where close to what we are having now since everyone is describing a depression looming with 12 trillion dollar deficit when neither were the case with Clinton. 1930s are more much comparable to now esp on the financial sector. you don't raise taxes in  a near depression, hoover did that.

"You see, I'm not a brownshirt like you"

You are defiantly a concern/ purity troll. You probably see yourself as the "Dear Leader" for the far left too. hate to break it to you but you sir are not a dear leader and irrelevant in the incoming policies. Tough 4/8 years ahead for you.

[ Parent ]
Very tough, indeed (0.00 / 0)
Right here from my irrelevant hole, it will be very tough. But what's strange to me is, if we're all so irrelevant, why have you spent your morning commenting?

Hmmmm...If I'm irrelevant, then what are you? Someone who follows irrelevance. That's a pretty sad life.

[ Parent ]
I am here among others (0.00 / 0)
Setting the record straight. I said you will be "irrelevant to the incoming policies" . Maybe you should learn to read. you certainly have a voice in this blog where I read various other more reasonable posters. Also it is fun to set people straight when they are consistently wrong and it is a habit of mine to try to give a reality check to ideologues of either party.
[ Parent ]
Seriously (4.00 / 3)
What exactly are you "setting straight?"

Fact: Barack Obama made a promise.

Fact: He is now breaking that promise.

Fact: Nobody has explained the economic logic of breaking that promise on an issue like the windfall profits tax (which I have an entire chapter in my first book on).

What about any of this is factually wrong? Where are you "setting the record straight?" Nowhere. What this is is people who don't want anyone questioning the Dear Leader, even on a promise he made.

If we can't question why the Dear Leader is backing off an explicit promise we made then indeed, we get what we deserve.

[ Parent ]
asdf (0.00 / 0)
See above.
[ Parent ]
Also You didnt answer (0.00 / 0)
Would you support his stimulus package going down to ~150mil? since that is what he promised in the campaign? You should since you want total purity on campaign promise no matter what happens in the real world.

what is your answer?

[ Parent ]
Of course (0.00 / 0)
Because he didn't say "a stimulus only as large as $150 billion." He's going farther than that. In other words, he set a floor, not a ceiling.

Now, if he said "I don't want to do stimulus" or "I only want to do $75 billion" - that would be a betrayal.

[ Parent ]
windfall profits (0.00 / 0)
taxes only come into effect if there is a windfall, so if the oil companies don't get a windfall this year it doesn't hurt anything to have that tax in place, if however they reverse course and raise oil prices again then it goes into effect.  
[ Parent ]
Exactly (4.00 / 4)
It's a safety valve against profiteering as much as it is a revenue raiser. In that sense, it is a basic regulation. If you profiteer, we'll take some of the money and mitigate the profiteering's negative effects. If you don't profiteer, you don't get taxed.
[ Parent ]
Moreover... (4.00 / 1)
Contra this bullshit argument that no windfalls mean political capital shouldn't be spent on a windfall tax, if there is anytime that windfall tax legislation is on the cheap, it is when there are no windfalls.
[ Parent ]
Why (0.00 / 0)
Why fight for something when it has very little payoff right now? in fact by doing this the companies possibly have the justification to raise the prices more artificially and bring a backlash with it. all of that for what? ideological purity? you can forget it with obama on purity and should have got the hints from his campaign.
[ Parent ]
No they won't (4.00 / 2)
They'll have to pay more taxes if the raise the prices just for fun.

We are trillions in debt from the war and banks and now the auto industry.  The money has to come from somewhere.

It is only in the past few months the price has come down, then it fluctuated suspiciously for a long time before that.  Why do you assume the present price is stable?

Also I admit to not thinking the oil companies contribute much to the kind of economic growth we really need.  They do contribute to republican, war lobbying and pollution.

[ Parent ]
Two reasons (4.00 / 1)
1) The wind-fall tax will be in place when the profits roll in

2) Less opposition when there are no current wind-falls to tax.


"It sounds wrong...
     ...but its right."

[ Parent ]
Not picking fights (4.00 / 1)
Obama thus far has deliberately avoided pressing any issue at all that could potentially be a fight. This is surely part of his "no drama" style, in that he wants no waves, no conflict, and no opposition at least until he takes office. The right wing pundits are surely grasping for some straw to show that they were right about him raising "your" taxes, being a socialist and a liberal ideologue. By passing on these two tax policy questions he's taking a defensive posture that gives no fuel for criticism. I wouldn't be surprised or disappointed if he simply let the Bush tax cuts expire in 2010 just so he could say he didn't raise those taxes.

Obama is clearly seeking the path of least resistance in these transition days, probably to save his political capital for a big initiative of his own choosing, probably health care reform. Anything else will just have to wait unless it's something that can be done without Congress, such as closing Gitmo, ending Iraq, mucking about with the bailout, and so on. But if you ask him whether he'd rather fight for a windfall profits tax or his green jobs initiative, I bet he'd answer the latter.

i actually think Obama is being smart here. (4.00 / 1)
If we're going to impose a windfall profits tax, it should be when people are genuinely pissed, and there's a feeling that it's necessary.

If gas prices are falling, we're just squandering our political goodwill. Let's wait it out. It's not like it's off the table permanently, if things start to go bad again.

I am still pissed over the previously high prices (0.00 / 0)
which I think are likely to return. I don't think the oil industry will ever have good will for a President that acknowledges the problem of global warming.
[ Parent ]
Reuters: Obama Backs Off Promise to Pass Windfall Profits Tax on Big Oil | 73 comments





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