Richard Viguerie: Blame a liberal for high energy prices
I'm not familiar with Richard Viguerie, but he's a proud conservative and more than willing to engage in some "attack the liberals" maneuvers to complain about high gas prices. Since I get a bit of flack from our readers about airing my leftwing views, I thought I'd highlight Viguerie's argument - don't worry, I'll get back to my standard Republican bashing in a post later today :)In any case, Viguerie's point is that some on the left see high gas prices as a good thing, and so therefore we're totally responsible for the high prices. He does hate on corn ethanol for a bit, and polishes Reagan's memory. He goes through the standard talking points about driling in ANWR and letting the market
Look, I'm willing to let conservatives have their say, but this just seems slippery as all get out to me. If I remember correctly, the federal gas tax is around 18 cents a gallon, right? In 2007, Exxon earned $1,300 per second. I know that not all of Exxon's profits come from gasoline sales, but come on. I'm sure that in some technical way Viguerie could be right, but saying that our cash-starved governments are somehow riding high compared to the Exxons of the world is amazing. Simply amazing.
[Source: ConservativeHQ.com]
Reader Comments (Page 1 of 3)
D.R. Payne 3:32PM (7/08/2008)
Many states and municipalities also have significant gas taxes on top of the federal tax. Check out the API statistics:
http://www.api.org/statistics/fueltaxes/upload/2008_159_GAS_MAP_JULY2008.pdf
So yes, Exxon's few cents per gallon profits pale in comparison.
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Luke 3:20PM (7/08/2008)
"Look, I'm willing to let conservatives have their say, but this just seems slippery as all get out to me. If I remember correctly, the federal gas tax is around 18 cents a gallon, right? In 2007, Exxon earned $1,300 per second."
And how much revenue does the federal government bring in per second? DoH! This is yet one more example of why math and basic statistics are useless when dealing with the American public. Only emotional arguments work these days. Those of us who are good at math, statistics and economics can only talk to ourselves.
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GoodCheer 3:31PM (7/08/2008)
Good question Luke. Let's look at some numbers:
According to the Energy Information Administration (www.eia.doe.gov/aer), US refiners make 8.3 million barrels of gasoline per day. That's 96 barrels per second.
At 42 gallons per barrel, that's about 4000 gallons per second.
So if they're making $1300 on 4000 gallons, that's about
$0.32/gallon in profit for the oil companies.
Ignatius 3:38PM (7/08/2008)
Oil refined to gasoline is not 1:1, it's approximately 20 gallons of gasoline per barrel.
EVan 4:19PM (7/08/2008)
If the Federal Government charges 18 cents per gallon of gasoline in taxes then they are indeed making a killing on fuel sales.
The United States consumes 400 million gallons of gasoline every day. That comes out to 4630 gallons a second. The Federal tax on a gallon of gasoline is 18.4 cpg plus an average state tax of 28.6 cpg.
4630 gal/sec * 47 cents/gal = 2176 dollars per second.
However... that's just gasoline. Take diesel fuel into consideration as well.
The United States consumes 110 million gallons of diesel fuel every day for on road transportation alone. That comes out to 1273 gallons per second. The Federal tax on diesel fuel is 24.4 cpg plus an average state tax of 29.2 cpg.
1273 gal/sec * 53.6 gal/sec = 682 dollars/sec
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Therefore from gasoline and diesel sales alone the US government reaps massive 2858 dollars/second.
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This doesn't take into account all of the other products that are made out of a barrel of oil that the government taxes.
The point here isn't that conservatives or oil companies are off the hook... just that this blog post is stupid, misleading, and void of facts.
steve 9:00AM (7/10/2008)
wait, so if the gov't make .18 per gallon, the oil companies make .32, state taxes are .28, and most gas stations only make about .03 per gallon, that equals $.81 per gallon, where the F*** does the other $3.50 per gallon go, correct me if im wrong but someones numbers are off
GoodCheer 3:33PM (7/08/2008)
Woo, I really messed that up... that's Exxon's profits divided by the total refined capacity of the US. So I suppose if Exxon produces about 1/5 of US gas, then their profits are something like 5 times the 32 cents I came up with....
Sorry.
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Luke 3:40PM (7/08/2008)
My point is that Sebasian is making an emotional argument. Is he angry that the fed brings in and spend tens of thousands per second? He compares a gallon of gas to revenue per second. What sense does that make?
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Wise Golden 4:05PM (7/08/2008)
Sebastian, I’m a conservative and I would say that you’re right that his argument is weak, however, I’m not so sure that his premise is false. He does a poor job of trying to prove his point. I will clarify a conservative position on oil prices if I may.
Oil pricing is determined, rightfully so, by market forces. The persons responsible for high oil prices are most likely the consumers of the product, not the producers. Oil company profits are reasonable at about 12% of total revenue – actually, a little on the low side compared to many companies as a percentage of revenue. Oil companies make huge profits because consumers buy a lot of their product. Where does the blame lay – at the feet of the consumers. The concept of taxing an oil company for success in a manor that is uncustomary relative to other successful companies is anti-capitalist.
Federal taxes in the United States are indeed at $0.18 per gallon and are also most likely reasonable, perhaps on the low side now considering the new valuation of gasoline.
Most conservatives that I talk to are not bothered by the price of gasoline as much as they are the transfer of wealth that is occurring and the vulnerability of our existing supply. Of additional concern to many conservatives is the impending ripple effect that rising energy prices will produce within our economy which is heavily reliant on oil.
Most conservatives would encourage conservation as a personal choice, or through market driven reality, but not as a government mandate. Most conservatives would encourage increasing supply through additional drilling, or other forms of production in order to lower the pressure on energy pricing, improve the security of the supply and prevent the transfer of wealth to foreign nations. Most liberals would likely believe that supply is fixed and declining in an irreversible manor, and that action should be taken to reduce demand, through both personal choice and by way of mandate in the form of higher taxes, tariffs and penalties (windfall profit taxes being an example of a penalty,) while offering incentives to low income people to upgrade technology (a different form of wealth transfer.)
These factors define our differences on this issue as liberals and conservatives, however, there are many points to which we agree at least partially. We agree that pollution is bad, although not necessarily for the same reason. We agree that conserving resources is good. We agree (in this instance) that domestic production is better than importing and that supply should be localized as best as possible. We also agree that any drilling that occurs must offer a 100% assurance of environmental protection and that any failure on this point is unacceptable.
It is my belief that we can find ground for compromise on the points to which we do not agree, allowing us to move forward, faster, on those point to which we do agree. I would suggest that Liberals compromise on the issue of increased production (drilling) and allow more domestic production while insisting, along with conservatives that the new production be environmentally friendly, and in return, I would suggest that conservatives embrace and support methodologies to encourage dramatic conservation through mandate, which would include a gradual phase-in of higher fuel taxes, and offering consumers supports which will allow for the poorer Americans to improve their technology, and maintain their standards of living.
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armmat 6:15PM (7/08/2008)
Market forces control the market price? Bullsh8t.....consumers control the price? Rubbish.
Consumers are almost never given enough choices without bias from the producer of the product. Consumers are dumb...the manufacturers know that. They capitalize on that.
Does anyone for a moment think the consumer has enough brains to understand how retarded it is to drive around in a 5000lb, 7 passenger vehicle when the family only has general four people or less...of whom are almost never in the same car at the same time?
Does the consumer understand how retarded it is to be duped into buying a substandard quality, 1960's technology SUV in 2008 with live axles, pathetically simple frame design, and a profit margin or 2 to 1 for the automakers? Is the consumer smart enough to understand that the automaker sells these vehicles cheaper than others but the operational costs are so much higher?
Do you think the average dumb consumer will figure that out? Guess what...go to a Sam's Club or Costco or Walmart and stand outside for 30 minutes...take a long hard look at the retards and lowlifes who make up this society as a whole and you'll be able to answer the question of "Does the consumer...."
Honestly...if you people don't you're being told what and what not to do...just based on available options, you're totally unenlightened.
Tyler 7:14PM (7/08/2008)
armmat,
You seem to blame everyone but the consumer for the consumer's own ignorance. Thinking like that is why consumers are so uninformed in the first place. "The consumer is too dumb to make their own decisions, so we should make decisions for them." NO! The consumer should be able to make up their own damn mind and if they make a bad decision, they they should deal with it.
So many economic problems in America are directly because the consumer was too damn lazy to put a bit of critical thinking into their purchases, or their life. I have no sympathy for anyone struggling because they have 19 children, 3 ford excursions, an overpriced/undervalued 6000 sq ft house and no job. It was never hard to see that those were terrible decisions. If they can afford it, that's great for them, sucks for me, but I'm not telling them they need stop feeding their kids, driving their cars or selling their house. Why should I have to care that they can't afford it?
Bad decisions make for bad results and the only person to blame for bad decisions is yourself. Deal with it.
Sam 11:39AM (7/09/2008)
armmat, I agree with you comrad! The proletariat is much too stupid to know what is good for them and the bourgeoisie is exploiting them to make obscene profits. Only the government truly knows what is good for the people!
-Obama '08!
Dylan MacDonald 12:38AM (7/16/2008)
I'm a liberal and I have to say that was the most reasoned assessment of the liberal and conservative approaches I've read in a long time. Moreover you accurately described the prevailing liberal stance without editorializing or seeking to ridicule that position. Thanks.
Mike!!ekiM 4:06PM (7/08/2008)
Wise Golden says "Oil prices are determined by market forces". That needs some supporting documentation.
- US refinery capacity utilization has dropped to 86%, meaning, demand is down. Yet gas prices continue to rise.
- The price of gas is not related to the true cost of a barrel of oil as bought by Exxon from Saudi Arabia, Exxon has a long term "set price" for the oil they buy, which does not justify these price swings, at least until their contract is up, yet price is adjusted daily.
- There's more evidence here of Monopoly Pricing then a "free" market.
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EVan 4:53PM (7/08/2008)
@Mike!!ekiM
"-US refinery capacity utilization has dropped to 86%, meaning, demand is down. Yet gas prices continue to rise."
Yea, demand is down here... but oil is a global commodity and demand is outpacing supply significantly in developing countries.
"- There's more evidence here of Monopoly Pricing then a "free" market."
Exxon Mobile is just one of dozens of oil companies in the world all competing viciously with one another. Even if all of the United States owned oil companies were in cahoots together there is still far too much competition from other private and state owned companies... a far cry from a monoply.
The days of Standard Oil owning all of the railroads and setting prices have been gone for three quarters of a century.
Mike!!ekiM 11:40PM (7/08/2008)
Demand is also down "globally", there are 8 full oil tankers parked in Iranian waters, waiting for a buyer to call.
Yuan 10:52AM (7/09/2008)
Mike!!ekiM,
Not all oil is equal. Middle Eastern oil is sour crude, which is high in sulfur content. It is therefore less desirable to use than light, sweet crude for refining into products such as gasoline and now probably diesel given the newish ULSD standards.
The oil prices splashed all over the media nowadays are for light, sweet crude futures. Middle East Sour has its own future, which trades at a significant discount.
Dan 4:23PM (7/08/2008)
Sabastion. Our "cash starved Gov'ts" are not the oil companies fault. And yes you sound just like any other liberal. Big business is somehow to blame for everything. The Gov't does tax gas and facts show Gov't takes in about 4 times the profit the oil companies do. Just because they waste in on free college education for illegals shouldn't bother you lefties.
And let's not talk about how the tree huggers (lefties) got us into this mess by stopping all refineries and all new drilling, as well as closing all new nuclear power attempts for decades. Now lefties are saying nuclear power might be the answer?! They always seem to be on the wrong side of issues.
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Chris M 11:22PM (7/10/2008)
You're right, the "cash starved government" isn't the oil companies fault - it's the fault of "borrow and spend" conservatives who were oh so eager to cut taxes again and again, especially for the rich, but who simply wouldn't cut spending, especially spending that benefitted wealthy campaign contributors. Some conservatives seem determined to demolish all government except corporate welfare and the military / police forces protecting their pile of loot.
We can't lay all the blame for the refinery shortages on "tree huggers", the oil companies have been reluctant to spend any money building refineries once they found fuel shortages drove prices and profits up. Charging more and delivering less is a surefire way of increasing profit margins.
Frank Hagan 6:29PM (7/08/2008)
"Dollars-per-second" "cents profit per gallon"
Our "cash starved" federal government spent in excess of 2.5 trillion dollars last year, far more than the total sales of ExxonMobil. I wonder how many dollars per second that is ....
The fair comparison would be how much Exxon makes per gallon of gasoline sold, compared to how much government takes in taxes? In California where I live, Federal taxes are 18.4 cents, and State taxes are 18 cents ... plus 7.25% sales taxes. The wholesale price of gasoline is not what we pay at the pump, but what the retailer pays. I don't know how much net profit Exxon makes on a gallon of gas.
But I do know that Exxon pays taxes ... at about 40% of its revenue. Do we count that money? On a per share earning ratio, Exxon earns 7.69 per share (today's close 85.94). That works out to 11.18% ... a pretty good return on the investment, but certainly not "obscene". Let's say they net that 11% of gasoline sales, it works out to about .50 a gallon at $4.50. Deduct the taxes they pay, and you're down to .20 a gallon.
Yeah, that's less than the government takes.
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