Saturday, May 10, 2008


McCain tried to make political hay by offering a three month suspension to the federal gasoline tax of 18 cents per gallon. He either ignored or failed to appreciate that a significant portion of the tax deduction would have gone into the pockets of the oil sellers. The average citizen buys about 50 gallons per month. The tax reduction would have worked out to about $9 per month or about $30 for the Memorial Day to Labor Day tax holiday. If we assume a 50/50 split, the savings to the consumer would have been about $15.

On the other hand, when Obama opposed the tax holiday, he once again showed an elitist attitude. He disparaged the idea of giving a small tax break while talking about the larger breaks he expects to pass once he is president. For those who are hurting now, this was like telling a thirsty man that the new well will be complete 18 months from now.

Hillary tried to make political hay by coming down on both sides of the issue. She did McCain one better by adding a win fall profits tax on the oil companies to pay for the road tax holiday. What a joke? She would have the government do the paper work to suspend one tax on gasoline only to replace it with another. She tried to sell the public on the idea that the big oil companies would pay this tax for the public. P.T. Barnum would have loved Hillary. P.T. Hillary would have come up with the idea of free tickets into the circus tent but a charge to leave!

Of course, no one can say precisely how the markets would have reacted in the short run, but oil companies, like all businesses, must include taxes as one of their costs of doing business. Over time, every surviving business must make a satisfactory return on its investments after paying all costs. Adding a win fall profit tax on a business may cause the returns to the investors to go down in the short run but over time the tax must be included in the cost to the customers. Hillary would have you believe that she would tax big oil but we all know who would ultimately pay the tax.


Yesterday, I once again found myself defending Obama. While I strongly disagree with Obama's economic and military proposals, I do not believe the world would fall apart if he were elected.

Over the past 10 years or so, Canada has fallen from the 6th lowest infant mortality rate to the 25th. Doctors from Canada have started recommending to women with high risk pregnancies to seek care in the USA (Global Mail story). Patients who need hip surgery in Canada must wait an average of 9 months and patients who need heart surgery must wait 48 days! Die in fewer than 48 days and the surgery was free to Canada, die after the 48 days and the surgery was free to the patient.

When Bill Clinton was elected, there was great fear among conservatives that America was on its way to socialism. Social medicine was first on the Bill and Hillary agenda. Rational thought prevailed and after a massive government boondoggle was averted, Bill went on to govern as an economic conservative; the country prospered. The country was weakened militarily during his term and a lot of young folks came to have a new definition of what sex is, but trade, jobs and incomes flourished.

It is clear that Obama is as "slick" as Bill Clinton. One easy tip off has been the Obama position on trade. Obama's economic advisors clearly appreciate the benefits of trade and they were careful to tip off Canadian officials that Obama's anti-trade comments were only political. When in the heat of the battle in Ohio, Obama and Hillary bashed NAFTA. Both candidates know that NAFTA did more to keep Mexicans from jumping the border into the US than all the fences and boarder agents combined. NAFTA allowed the citizens of the USA to buy low priced goods without having as much immigration; immigration is nothing more than another form of trade. Both candidates believe in trade but both have been forced to run far to the left of center in order to gain the support of unions.

Like Hillary, Obama has said the words that will allow him to move toward the center for the general election. He also has promised to govern as a man of compromise, which means he will govern down the middle. The danger to America is that the political middle may shift too far to the left if there is a three house sweep by the democrats. Even so and even today, long after the days when Senators read recipes to stall bills, the filibuster is still a wonderful tool in the bag of the senate minority.

Last night, I was pleased to read a posting of P.J. O'Rourke. Mr. O'Rourke makes the point that it is politics that is dirty, not necessarily the politicians. He notes that democracy is ugly. He asked what it might be like if the family voted on how one should dress. Having teenage daughters, he can imagine himself going to work with his belly button showing.

Have you ever contemplated running for office? Have you considered how "slick" you would need to be to win? Like Obama, you would need to be able to remember when to say, "I am for free trade" and when to say, "I am for fair trade". Saying that you like beautiful women is similar to saying you like fair trade; beauty and fairness are in the eye of the beholder. Like Obama, you would have to remember to say rather casually that you think it might be necessary to keep a few troops in Iraq, but only long after winning over the anti-war wing of the democratic party. I honestly do not think Obama would cut and run from the progress made in reducing state supported terrorism. Iran is surrounded and we should not give up until the support of terrorist groups has ended. With Hillary out of the way, Obama will gradually become much more of a military hawk as the general election comes closer.

After making my argument that Obama is saying some things he knows to be misleading, it was a pleasant surprise to hear the Reverend Jeremy Wright say the same thing on national TV. Unfortunately Mr. O'Rourke is correct about politics in a democracy. Only the delusioned or the uninformed voter will find a candidate with whom he agrees with on all issues. All who cast their vote must always vote against their convictions.

Yes, it is a shame that winning the presidency has gotten down to arguments such as the one over a three month gasoline tax suspension. There are far more important issues getting little attention. For example, all three candidates support some version of a huge corporate tax swindle and boondoggle. They all support a carbon dioxide cap and trade system. The ultimate harm and costs will be far more than the corn ethanol debacle. Last week, the congress voted to reduce the corn oil subsidy, being paid to rich farmers, from $.51 to $.45. The loss of the $.45 does not bother me nearly as much as the people who are dying of starvation. Even though, it is common knowledge that this program has caused widespread hunger and other problems, such as the damage to vast areas of the Gulf of Mexico, yet money has once again trumped morals.

To provide cover for the support given for corrupt policies, the US State department came out swinging against the rich oil nations that have not been giving food to the poor. It is sad to say, but the support "surplus" food for the poor receives from many is nothing but a way to ease a guilty conscious and a way to justify the massive subsidies paid by obligation to rich farmers (farmers who also know what is happening). We are better people than this, we do good have to make an evil bargain in order to be helpful to others. And, of course, we are not so selfish to renegotiate NAFTA in an ill advised scheme to force American consumers to pay higher prices just so American Union Workers can make an extra high wages while our neighbors are forced to beg for free US surplus food.