I caught a bit of Barack Obama's news conference from Florida while I was home for lunch today, the first I've remotely paid attention to the election season for quite some time, and I was immediately struck by a few points of inanity. Other inanity took some time to sink in.
First, Obama complained that McCain's recently-announced support for opening up offshore drilling wouldn't do anything to help ease the high price of gas today, or tomorrow, or next year, or in the next five years. He says that it'll be a generation before any significant oil production will come online from such drilling, and that increasing domestic production will simply "worsen our addition to oil" while putting off needed investments in alternate energy sources.
OK, setting aside for the moment that opening up future drilling has nothing whatsoever to do with whether we also pursue alternate energy sources, Mr. Obama is correct that opening new areas to future oil production won't have an immediate impact on gas prices.
But so what? If it takes 10-15 years to get production of new oil fields up and running, that's an argument for starting to drill 10-15 years AGO, not an argument against starting the process now so that in 10-15 years we have that production available.
Anyhow, so he's right that McCain's suggestion won't ease gas prices tomorrow. What's Mr. Obama's suggested alternative? Massive investment in alternative energy sources.
It's a great idea. We should absolutely invest heavily in alternate energy. But that ain't gonna ease the price at the pump tomorrow, either. Why on Earth could we not do BOTH these things at the same time? Open up the drilling, and work on alternative sources of energy, and in a generation perhaps both projects will bear fruit. Meanwhile, certain uses of petroleum products (and by-products) will stick with us for a very long time. Gasoline isn't the only use for oil, not by a long shot, and not all of those other uses are energy-related either. We're still going to need oil even with alternative energy sources.
But Mr. Obama didn't stop there. Of course he has a "solution" to the pain at the pump. He wants to send out a $1,000 stimulus check to 95% of American families. Apparently, so that they can buy gas.
And how will he pay for this "stimulus" check? Why, taxing those evil oil companies who are making "windfall" profits. Which profits come from people paying high prices at the pump. Which prices they'll be better able to pay, thanks to the "stimulus" check paid for out of -- oil company profits.
Anybody else see a problem with this?
But it did take some time for the full stupidity of this plan to sink in. Obama says that 95% of American families will benefit from this $1,000 freebie. I was a bit distracted by the certain knowledge that I'll doubtless be firmly in that 5% who can pound sand. But then I started thinking... how much would that come to, anyway? One thousand smackers for 95% of American families? Wow, that seems like a lot. But how much, really?
A little sleuthing on the Internet allows us to get a ballpark idea. According to the IRS, in the last tax year with data available (2005) there were 134.4 million individual tax returns filed. Now, granted, that doesn't match up exactly with the number of families in the country, but we're just looking for a ballpark figure (and with 300 million people in the US, we're at least within an order of magnitude here). So, if we assume that 95% of those tax returns will get the $1,000 check, that means a cool grand going out to more than 127 million families.
What's the bill for that? Not counting postage, of course, we're looking at $127 BILLION in "stimulus" checks (at least the $1K makes the math easy). Paid for, Obama promises, out of the windfall profits tax on evil oil companies.
How much money could such a tax generate to pay for these checks? A lot depends on the definition of "windfall" profits. But for reference, the combined total profits of the oil industry in 2007 came to $155 billion. Paying for Obama's giveaway would require confiscating about 82% of all industry profits in tax. Never mind that while the $155 billion in profit is truly staggering, that's on total industry revenues of $1.9 TRILLION. Making the industry profit margin a respectable (but moderate) 8% or so. Hardly a windfall (search around a bit for other industry profit margins to see for yourself).
So what we have here is another vacuous attempt at pandering by Mr. Obama, a ploy to buy off the votes of the middle class with a fat government giveaway that can't possibly be paid for the way he claims it would.
Can we claim Hope and Change will save the day, while actually falling back into the same old patterns of politics as usual?
YES WE CAN.
[UPDATE]: Apparently Obama claims a cost of only $50 billion for his "stimulus" plan. I'm not sure how 50 million families make up 95% of America, but then I guess when you're full of crap in the first place, your numbers don't really need to add up.