Quick Politics Brief

I can take a deep breathe and come back to post regularly now, since I finally only have one apartment again, and most of my boxes are empty and their contents distributed. It’s been a long move, and I’m very glad it’s over. I’ll give you a summary along with the six-month review and March monthly goal I owe you, but not yet.

Tonight, you get a few links to stories from the past week I’ve been itching to put up for days. Guiding theme is legislative.

The EPA released their actual reason for denying a waiver to California and about 16 (or maybe 18, depending on which article you read) other states so that they may pass their own emissions laws, the same week as memos from the EPA’s staff opposing the decision were made public. The agency said in December that they’d deny the waiver, for reasons that would be forthcoming. After over two months, they’ve come up with

“While I find that the conditions related to global climate change in California are substantial, they are not sufficiently different from conditions in the nation as a whole to justify separate state standards,” Johnson [the EPA head] wrote.

The policy director for the National Resources Defense Council called that statement “both factually and legally wrong”. Johnson’s own EPA agrees with the NRDC.

“It is obvious to me that there is no legal or technical justification for denying this,” Margo Oge, director of the EPA’s Office of Transportation and Air Quality, warned in talking points prepared for a meeting with Johnson in October 2007.

While the EPA is taking their bold, defenseless move, the House has passed a bill with a much less certain future. A plan to shift funding to renewable energy resources, paid for by removing tax breaks given to oil and gas companies, passed the House Wednesday. No idea on when the Senate will get to it, but Bush has of course threatened a veto. After all, American oil companies (who are hitting year after year of record profits– not just records for them, but records for any American business ever- and record profits, not just record income, straight-up profits) are suffering badly, and may not survive much longer without those tax breaks. Limping along, suspended by a thread, suffocating under the weight of their own cash, etc. You know how it is. The NYT article on the House bill highlights Republican reasons for opposing it (besides the poor, poor oil companies) (ok, “poor” is a bad word choice), and what doesn’t boil down to “taxes==evil” goes along the lines of “energy prices are high enough, and this will increase our dependence on foreign energy supplies”. I’ll go ahead and call that laughable, considering how dependent on foreign oil resources we already are, and considering that the main gist of the bill is to shift energy production to sources that Americans control, on US soil. Let’s see how the Senate takes the idea before we get all excited, though.

And in a Wired piece, recycling at the Obama campaign! Not speeches (har-dee-har), no, but campaign materials themselves. For those of us who’ve been hankering after a teeshirt, you know that the Obama campaign is trying to fill such a huge demand for their merch that their orders are being delayed by weeks, and the ObamaCycle site is emerging as the most effective way to get posters where they’re needed fast. Considering the political litter all over our corner of Alexandria, I hope more campaigns pick up the idea. Of course, since total inundation seems to be the general goal of the posters, perhaps the best I can hope for is that all those signs end up in a recycling pile by November.

7 Responses to “Quick Politics Brief”

  1. 1 Mrcalculo March 4, 2008 at 11:30 am

    Sorry to be such an economist, but I must point out the looking at nominal profits is pretty meaningless. Yes, Exxon and others had very very good years, and yes, the dollar amounts involved are huge. However, should it be a surprise that an industry does well when demand for its product spikes? Furthermore, running an oil company is very very expensive. The correct measure of profitability takes into account the resources required to achieve the profit.

    A simple comparison to other companies shows that even in an historic year, oil companies did not fair better than many large American corporations.

    For instance, Exxon, the best run of the oil bigs, had a profit of 10.9% and a return on equity of 35%. BP in comparison posted 7.5% and 23.4% respectively. Compare this to Apple Computers, which posted last year profits of 15.4% and ROE of 29.1%. Microsoft did even better, with postings of 30% and 48%. Google, the paradigm of a groovy progressive company, had profitability of 25.3% and roe of 21.1%. Are these companies suspect because they are so profitable?

    For the record, I am not a fan of our convoluted tax code with its many idiosyncratic breaks and exceptions. However, I am tired of hearing oil companies mocked for having large profits when their actual performance, even during an historically good period, is only on par with some other well-performing businesses.

  2. 2 virescent March 4, 2008 at 7:09 pm

    You make my point nicely- these oil companies are doing absolutely fine. I’m mocking the rhetoric of the people who argue that these companies are minutes from extinction, that any additional burden will capsize them- to mix a few metaphors. Removing tax loopholes that favor them will do the American people much good, and them little harm.

  3. 3 Mrcalculo March 5, 2008 at 10:41 am

    Well, this performance is in an historic year, and oil profits are quite variable. Typically, they need big years to allow them to invest in very expensive infrastructure. I don’t know that much about the tax breaks, but I am not sure oil is doing as well as its most recent few years would suggest.

  4. 4 Cameron March 5, 2008 at 12:17 pm

    I love the idea of recycling campaign posters, flyers, lawn-spikes! I think the Obama campaign (love him, or fear his cult like leanings) has run one of the most intelligent, grass-roots like campaign this nation has ever seen! If his forward thinking ideas and geniously unconventional support gathering methods can be translated to the white house, I think America and the world is in for a great surprise!

    I also know for a fact that states rights have allowed California to pass it’s own emissions requirements (hence the original invention of the electric car), and the fact that big brother government is stepping in not only highlights the hypocrisy of the “hands-off” administration, but the painful and saddening corruption that has distorted the “scientific” government agencies. The EPA and FDA have been politicised and no longer serve their function as protectors of our citizens (see Scientists and Engineers for America for all the infractions over the past 10 years caused by crony-ism and replacement of EPA department heads)!

  5. 5 virescent March 6, 2008 at 11:38 pm

    Calc- what are the indicators that make you think that? Also, given that the tax breaks given to them represent some a small portion of their profits, do you think that removing the tax breaks they get over the next ten years, as the bill proposes, will irreparably harm their business? Demand won’t slow, since China and India will replace what America’s potential recession might lose, and OPEC isn’t going to increase supply…so. Numbers at an Op-ed (http://www.nytimes.com/2008/03/03/opinion/03mon4.html) and in a piece advising Oil as a good investment from Forbes (http://www.forbes.com/2008/03/04/sosnoff-peak-oil-oped-cx_mts_0305sosnoff.html).

    Cam- It constantly amazes me how the administration can say one relatively normal, promising thing and so constantly do the opposite- watching the news is like reading Pravda in the USSR these days (They’re saying renewable energy is good! That must mean they’re going to continue to ignore it!) And the entire precedent set by the EPA, letting California make lots of its own laws to address their own pollution problems, are completely overturned by this ruling, which is why it caught CA so off-guard.

    You’re a scientist, and I know you’ve thought about this before- (we’ve even talked about it some! Woo Pugwash!) Why do you think it’s so easy for the administration to so consistently ignore science? Why are the scientists letting this happen? Why are the American people allowing this? How does the administration have the huevos to think they can get away with silencing facts and careful study and the opinions of experts? Will it stop with the next president?

  6. 6 Cameron March 13, 2008 at 3:57 pm

    as if we needed to dig this discussion back up….but here you go!

  7. 7 virescent March 17, 2008 at 10:20 pm

    Interesting read, Cam, thanks! I find it pretty interesting that the hugely expensive oil actually makes it profitable to do hugely expensive things to get oil- like the 70$ sand thing they talk about. Three years ago, no company would ever have done that.

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