Saturday, August 01, 2009

Leftist Oil Contradictions

Alex Epstein at the Ayn Rand Institute blog points out that by the logic of the leftists that demanded a "windfall profit tax" on oil companies when their profits were unusually high, oil companies should now get a "windfall loss tax credit" based on the unusually low profits they now have. A good example of Epstein's point would be Exxon Mobil, that had a profits of just $4.5 billion in the first quarter down from $10.9 billion in the first quarter of 2008 and an average of $9 billion per quarter as early as 2005. And in the second quarter of this year net profits fell further, to just $3.95 billion.

The main cause of the big decline in Exxon Mobil's profits, and profits of other oil companies, is of course the big decline in the price of oil from the elevated levels of the first half of 2008.

One related point that could be here is the fact that when oil prices were at extremely high levels, one of the most popular leftist explanation of this blamed it on "greed" from oil companies (I discussed the other popular leftist explanation, speculation, here). I take it then that leftists would now say that oil companies are no longer "greedy"....

On the other hand, given the leftist concern about "global warming" caused by use of oil and other fossil fuels, and given the fact that higher prices discourage consumption , shouldn't the left now argue that "greed is good" and that the big problem right now is insufficiently greedy oil companies?

The answer is that they should if they want to be logically coherent in their arguments that high fuel prices are caused by oil company greed and that fuel consumption needs to be curbed for the sake of the environment. But as they don't argue that, the conclusion is instead that they are logically incoherent.


Anonymous Anonymous said...

"if they want to be logically coherent"
The trouble, of course, is that they don't. They want to signal that they are 'good people' who 'care' according to their tropes and stereotypes. Likewise they want to punish those who choose alternative forms of life, like making money instead of having a subsidized chair at some federal agency or academic institution.

It's like arguing with children, really.

1:29 AM  
Blogger The Arthurian said...

Stefan, most of the complaints I have seen about oil company profits center around measurements in "dollars per second." You want logic from these people? Good luck!

All-in-All, an argument based on your invention of other people's motives carries no weight with me.

2:22 AM  
Anonymous Anonymous said...

"All-in-All, an argument based on your invention of other people's motives carries no weight with me."

It wasn't an argument, it was an observation.

7:53 AM  

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