Like Clinton, Schumer Has a Math Problem

Congress has had the oil executives at the Capitol where they have been getting grilled because of the price of gasoline. The same politicians who have historically called for higher gasoline taxes to make the cost higher so we would drive less and save polar bears is beating up companies who make 8 to 10 cents on each gallon of gas. They do the work and state and federal government get more money out of the deal. Interestingly, Democrats who wanted more taxes on gas (thus raising the price) are now upset because constituents are raising hell. The members of Congress took their turns so let us see how it went.

A Congresswoman from Florida (I didn’t catch her name) was asking really stupid questions and asking the executives to prove they have not been manipulating prices. Two things, how do you prove a negative and are they not innocent until proven guilty which leads me to the next point. One Senator (maybe Ben Cardin) wants an investigation into price gouging or manipulation (or both). Since this has been looked at about 18 times and nothing has been found, perhaps there is something else at play here. That something is a global market for oil.

Members of Congress are too dense to understand that oil companies do not set the price of oil. Some of the rise is due to speculation bidding which is driving the price up. There is also a problem with a hugely increased demand from China and India which is driving the cost up (supply and demand). The other thing to remember is that Congress and the enviro-nuts refuse to let us drill our OWN oil. We have a bunch of it around. Some is off the Florida coast and some off the California coast and there is a lot of it in ANWR. We are not allowed to drill for it because Congress will not allow it. The wacko from Florida said that she did not want them there because tourists would have to look at them. Those tourists will all be from other countries because most other people will not be able to afford to go to Florida. Chuck Schumer gave us a bit of stupidity in all of this. The American Thinker reports that Chuckie said:

“If Saudi Arabia were to increase its production by 1 million barrels per day that translates to a reduction of 20 percent to 25 percent in the world price of crude oil, and crude oil prices could fall by more than $25 dollar per barrel from its current level of $126 per barrel. In turn, that would lower the price of gasoline between 13 percent and 17 percent, or by more than 62 cents off the expected summer regular-grade price – offering much needed relief to struggling families. “

When Congress argued against drilling at ANWR it was commonly agreed that we would get about a million barrels a day from there. The Democrats persuaded Bill Clinton to veto the ANWR bill and that is one reason we have higher prices. You see, if the Saudis producing a million more a day would reduce the price of gas by 62 cents then a million barrels a day from ANWR would do the same thing, or would it? Here is what Schumer said about a million barrels a day from ANWR (remember that is the figure that was believed would come from there and that is about what he is speaking):

Senator Chuck Schumer (D-NY) said the Administration was “strangling” any attempts to make serious investments at alternative energy over the last seven years and that drilling in the Arctic Wildlife Refuge would “take ten years and reduce the price of oil by a penny.” KCRG TV

So Chuckie says it would take ten years and reduce oil by 1 cent. How is there a 61 cent difference between a million barrels from Saudi Arabia and a million barrels from ANWR? If Bill Clinton had not vetoed the bill in 1995 the ten year issue would be a moot point because it has been thirteen. Chuckie made these statements within two weeks of each other. Did something in the dynamics of oil change in that time to make a 61 cent difference? The other thing to note is Chucky’s arrogance. He is basically holding Saudi Arabia up as the bad guys (they are for the most part) because they are not pumping a million more barrels a day to make things better for us. How arrogant of a man who will not allow drilling in his own country. Why should the Saudi’s or anyone else be willing to jump in and pump more for us when we are not willing to get and use our own resources.

It appears as if Schumer went to the same math classes that Hillary did. Neither of them seem able to count.

Then they got into the meat of the issue, money. Congress is upset that oil companies made billions of dollars. Ka-ching! Only problem is, the numbers are in raw dollars. The profit margin for oil companies was 10.8% for Exxon and around 8% for the others. Those are tight profit margins and not out of line with what we expect companies to make. Microsoft’s profit margin was 28.33% and even though theirs is almost three times higher, there are no calls to charge them a windfall profit tax. The company that John Kerry’s wife is associated with was nearly 9% and no one is hauling her before Congress. The thing that makes it look bad and what Congress plays up, is the raw numbers which are huge. These companies are very, very big and they make a lot of money because they are dealing with a lot of money. However, their profit margins are not excessive.

The large raw dollar figure is what has drawn the attention of Congress. They smell large amounts of money and they circle like sharks in bloody water. Money is like pheromones to them and it drives them into a frenzy with desire to obtain it.

Congress is full of idiots. They cause problems through their actions and then when there are problems they haul others before their august body and point fingers in every direction except inward. They caused the problems and their policies will continue those problems because things will only get worse. Their refusal to allow us to drill our own oil is hurting us and it is hurting the economy. If we could drill that oil and use it, maybe build a few refineries to make more gas, then prices would become more stable. If we kept that oil here then prices would certainly go down because we would not have to compete as heavily with China and India for the oil coming from the Middle East.

It was good to see oil companies finally fight back by pointing some of this out to those asking the questions. If Congress keeps getting its dander up with big oil they might have a few unexpected maintenance issues and shut down a few refineries for a while. That should make things miserable enough for Congress to pay attention.

The last thing to note is that Congress decries the amount of money big oil takes in but remains silent about the amount they [the government] takes from us. They have billions and billions coming in and they keep demanding more. They can’t seem to understand that we don’t want our taxes to go up any more than we do the price we pay for gas.

Big Dog

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2 Responses to “Like Clinton, Schumer Has a Math Problem”

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  2. David M says:

    The Thunder Run has linked to this post in the – Web Reconnaissance for 05/23/2008 A short recon of what’s out there that might draw your attention, updated throughout the day…so check back often.

    David Ms last blog post..From the Front: 05/22/2008