Black Box Report

It's no secret, things are tough all over. Well, tough for most people. Oil executives from the 5 largest companies (ExxonMobil, BP, Shell, ChevronTexaco and ConocoPhillips) faced some grumpy congressmen on both sides of the aisle yesterday, and although it was April Fool's day, Democratic Rep. Ed Markey was in no mood for jokes, saying he hoped Big Oil's record profits while Americans were getting bled at the pumps was some kind of hoax:

Rather than a hoax the oil companies shifted blame for high prices to issues outside their control, including growth in global demand, geopolitical events, material and labor costs, the fall in the dollar's value and government restrictions on U.S. oil and natural gas resources. Anything, in fact apart from them.

Even committing 10% of their record profits towards finding renewable energy sources was too much for Big Oil. After all, when you’re a pusher, the last thing you want is for your addiction-addled customers to kick their habit:

Oil exceeding $100 a barrel should provide the industry with all the incentive necessary to re-invest in energy infrastructure. But since 2005, the largest five oil companies have had cumulative profits of $345 billion and spent $252 billion buying back stock and paying dividends to shareholders...If the oil industry is unwilling to use $100 a barrel oil to make necessary investments here at home, then Congress is justified in revoking recently awarded tax breaks worth billions of dollars.

Tax incentives for exploration that, just 2 1/2 years ago the same oil executives admitted to Congress they didn't need because they were enjoying record profits then too – when oil was a mere $59 a barrel (“Those were the dayyyys...”)

As you would expect, rightwing blogs sprang to the defense of the oil companies, eagerly pointing out the jack-booted feds government extorts collects even more profits in gas taxes:

Angelic Big Government makes twice off of gas what evil Big Oil makes–and what makes one angelic and the other evil? The fact that one forcibly took that wealth and the other had the unmitigated audacity to earn it.

“Forcibly took?”

Tax collectors visiting an Exxon executive, as imagined by conservative blogs

I would suggest that difference is the government collects those taxes to do things like run the country, maintaining a civil society where enterprising companies can sell gas at $3.50 a gallon and not have to worry about pitchfork-and-torch-bearing mobs to worry about, while Big Oil execs use their profits to make themselves filthy, stinking rich.

Not that there’s anything wrong with that, in and of itself. Don't get me wrong. Capitalism is a great thing, when it's practiced responsibly, a point that Rep. Emanuel Cleaver (D-MO) wrote about on the The Hill's Congress blog (Reps! Blogging!):

I firmly believe the success of business, especially that of American companies, is important to our economy, particularly at this difficult time. However, the disparity between the profits of companies producing oil and gas and the increasing prices at the pump are inexplicable. The oil company representatives that visited the Select Committee on Energy Independence and Global Warming yesterday will need to do more to reassure me they are taking steps toward solving these problems.

Sorry, congressman, but without regulation, I don't see them voluntarily shutting off the spigot. The Bush years have been embarrassingly kind to them, and they want to keep that gavy train a-rollin':

These executives will face some tough questions - hopefully - on Capitol Hill, namely why they should continue to receive $18 billion in tax breaks over a 10-year period. It's kind of like your child winning a $1 million lottery but still asking for a weekly allowance.

Well it's not like you can light your cigars with $10 bills. Hundreds work much better. But millions of Americans wouldn't know that. It's not something that gets talked about in line for food stamps, something the blog Fallenmonk knows a little about:

I know from experience what having to rely on government assistance does to one's morale and self respect. While we were in the lower middle class growing up we still, at times, had to turn to USDA food to make it. I talked with my late father about it once and it really hurt his self image and was something he never forgave himself for. He worked hard and had a pretty good job and those times where we were hurting to make ends meet still weighed on him 25 years later. It saddens me to think that there are now 28 million people out there that are going to have some of the same experience. People that should be able to feed their families and can't.

Rising fuel costs lead to rising food costs. Rising costs of basic needs leads to economic instability, shrinkage and an inability to invest. Not that the Wizards of Wall Street are exactly a safe investment right now. But don't worry, America! Even though John McCain says he don't know much about the economy (or foreign policy, or science books, or the French he took), he's got former Sen. Phil Gramm as an economic advisor:

Let’s take a good look at former Sen. Phil Gramm, someone McCain has hinted might be his Treasury Secretary if elected...Most reasonable people seem to realize that we're in serious need of financial reform and expanded regulation. That is, except, Gramm, who's championed financial deregulation for years...Confronted with a fire, John McCain is taking advice from an arsonist. If elected, he intends to put the arsonist in charge of fire safety.

Well, I’m relieved. The Phil Gramms and Big Oil executives of the world always seem to do just fine. They (and their investor-class friends and shareholders) got theirs, and that’s the only part of any economic equation they care about:

Larry Bartels' forthcoming book (“Unequal Democracy: The Political Economy of the New Gilded Age”)...shows that under Republican administrations, incomes grow strongly for rich people, but barely at all for those of more modest means. Under Democratic presidents, by contrast, lower income groups see stronger income growth but everyone's income grows faster than it does under the GOP.

They don’t understand the frustration consumers feel at the gas pump or grocery store because it doesn’t effect them. They don’t see things like the housing bubble because it doesn’t effect them:

I was thinking about the housing bubble and why most of the "experts" failed to see that there was a problem, and I realized it's because they're all rich. There was one unavoidable and obvious fact that was apparent to anyone who isn't especially rich, and that's that there was no possible way that many households in this country had large enough incomes to be able to afford the monthly mortgage payments they were supposed to be paying, even without ridiculous interest rate resets. There just aren't enough people who make enough money to support that many $800,000 homes.

It’s an epic short-sightedness that won’t allow people to see past the fulfillment of their own desires and contemplate the consequences of their actions on others. Especially if those “others” don’t reside in the same economic strata:

It is up to all of us to bring poverty back to the national discussion table. Because the folks who are scrambling just to get by, working two and three jobs and trying to make ends meet that are way too far apart as it is, barely have time to work on survival, let alone lobbying the powerful to hear their rapidly diminishing voice.
……
Far too many people in America are one paycheck or catastrophic illness away from homelessness, and no one is immune. And that includes far too many of the nation's elderly whose fixed incomes are stretched beyond the breaking point between increased drug prices and increased housing, utilities and grocery costs.
As one person sinks, we all do...and we would do well to remember that we are in this together. Because "oh, that's a shame" doesn't exactly solve any problems, now does it? And that next person to have a problem? It could be you...

And that's no joke.