Barack Obama’s outrageous pander proposal today — to confiscate what he views as “windfall profits” from oil companies in order to give us all $1,000 of “emergency relief”– is not getting nearly enough critical attention.
Now I know that so-called “big oil” has become a popular scapegoat for high gas prices, but in a free market economy companies can only charge what the market will bear. As this ABC News article notes:
Make no mistake about it, oil companies are gushing in dough. But when you look at their profit margins, they are actually lower than Microsoft’s, Google’s or IBM. And no one is suggesting a windfall tax for them.
And of course it wouldn’t work. Oil companies would respond to the increased cost by raising prices to get back to the level of profit that the market supports.
More importantly, all freedom-loving Americans should be deeply distressed at the notion that the federal government has the power to choose industries or companies that are unpopular and take away their money.
Barack Obama made millions of dollars with two best-selling books. Under Obama’s approach to the use of political power, why couldn’t the government declare everything above $50,000 in profit to be a “windfall” to be confiscated and given to others?