Monday, August 04, 2008

Better Than That

Up until now, I've had such high hopes for this election year. Both nominees are respectable candidates with great credentials and a history of being above average politicians. So it saddens me to learn that both McCain and Obama are getting a bit dirtier than they've been known to become with their latest PR pushes against one another.

In a new television commercial, McCain, in an attempt to paint Obama as out-of-touch, compares his opponent to the likes of infamous tabloid stars Britney Spears and Paris Hilton. Republicans seem to be divided on the tactic. Some applaud the move, while others fear that it could lead to a backlash from voters sick of bad politics. Part of the reason for the new method is to counteract certain weaknesses in his own campaign, such as the continuous lack of a clear and uniform message. This may not be the easiest thing to remedy but it certainly does not require the kind of negative campaigning coming out of the McCain strategic handbook.

In another turn toward dirtier tactics, accusations are flying from both sides of the aisle. After officials on Obama's side accused the republican nominee of inserting race into the campaign, McCain replied with a similar criticism, claiming that Obama is trying to play the "race card" and that "there's no place in this campaign for that." But apparently it's ok for McCain to put out what is frankly a ridiculous advertisement attacking Obama's perceived celebrity status, though I cannot be sure if there is any truth to race card accusations or not.

But let's not allow Obama to get off too easy. Focusing on his and McCain's energy policy, a new strategy from the democratic nominee has me skeptical about the likelihood that this campaign season will remain a clean, fair and policy-focused one. Obama has begun a fresh wave of attacks criticising McCain's connections to big oil companies and how this influences his decisions and perspectives on energy policy, namely his support for offshore drilling. CNN reports that the ad charges that the Republican nominee has recieved $1.1 million in contributions from oil and gas companies. In truth, though a significant portion of these contributions (about three-quarters) came after McCain announced his support for offshore drilling, they also came from executives and employees of these companies, not from the companies themselves.

Sure, maybe McCain's just frustrated. Obama has the kind of widespread popularity and grassroots support that McCain can only dream of right now and perhaps the Republican nominee is a bit jealous. And perhaps Obama is simply trying to combat some of his opponent's more negative attacks. And maybe they're both just following the tradition of mud-slinging in American politics that we as voters come to expect (though not welcome) from our campaigning legislators. But really? Why not try to break from this absurd and unnecessary tradition? We all know both candidates are so much better than pot-shots and low-blow political rhetoric. My advice is this: focus on a clear, positive, policy-oriented message and perhaps they will not have to resort to the politics we have come to expect in this country.

Visit Politico and the New York Times for more on this discussion.


Anonymous Anonymous said...

Here is the definition of a "Windfall Profit" from Wikipedia:

A windfall profits tax is a tax on profits that ensue from a sudden windfall gain to a particular company or industry.

[edit] United States

In 1980, the United States enacted the Crude Oil Windfall Profit Tax Act (P.L. 96-223) as part of a compromise between the Carter Administration and the Congress over the decontrol of crude oil prices. The act was intended to recover the profits earned by oil producers as a result of the sharp increase in oil prices brought about by the OPEC oil embargo. "Despite its name, the crude oil windfall profit tax . . . was not a tax on profits. It was an excise tax . . . imposed on the difference between the market price of oil, which was technically referred to as the removal price, and a statutory 1979 base price that was adjusted quarterly for inflation and state severance taxes." CRS Report RL33305, The Crude Oil Windfall Profit Tax of the 1980s: Implications for Current Energy Policy, by Salvatore Lazzari, p. 5.[1]

On August 23, 1988, amid low oil prices, the tax was repealed when President Ronald Reagan signed P.L. 100-418, The Omnibus Trade and Competitiveness Act of 1988. [2]. Since then, the tax has not been reenacted, however with gas prices once again reaching record levels there is renewed pressure on the U.S. government to bring back the tax.

A windfall profit tax is said to be inconsistent with the basic precepts of Capitalism, which in its most basic form is based on profit being the fair reward from the application of land, labor, capital and entrepeneurial ability. Socialism in its most basic form takes what it needs as it needs it to provide for the citizenry. Hence it has been difficult to separate the association of creeping socialism from discussion of the windfall profit tax.

The windfall profit tax of the 1980s is not to be confused with the excess profit taxes of World War I, World War II, and the Korean War eras.

The etymology of the phrase is from colonial times. "The crown precluded the colonists from using any lumber one foot or wider except whereby act of God, such as a severe storm, a tree falling on one's own property. If that happened, the colonists could use the tree that fell down on their property during a storm or they could sell it for a significant amount. So if you had a big storm on your property back in colonial days, and a lot of trees fell down, the resulting monetary reward was called 'a windfall profit.' It was a beneficial thing to a property owner, because they had limits on how much lumber they could use. But if an act of God came down and knocked a bunch of trees, they could use whatever they had. There were no limits on it and they could sell it or use it for their own construction purposes, hence windfall profit."[3]

[edit] Criticism

In a February 12, 2008 editorial titled "Record Profits Mean Record Taxes," Investor's Business Daily said that regular income taxes already take into account the high profits, and that there's no need to do anything extra to tax or punish the oil companies. As an example, the editorial states "Consider the magnitude of the contributions from Exxon alone. On those 'outlandish' 2006 profits, the company paid federal income taxes of $27.9 billion, leaving it with $39.5 billion in after-tax income. That $27.9 billion was more than was collected from half of individual taxpayers in 2004. In that year, 65 million returns — which represent far more than 65 million taxpayers because of joint returns — paid $27.4 billion in federal income taxes." [1]

In an August 4, 2008 editorial titled "What Is a 'Windfall' Profit?" the Wall St. Journal wrote, "What is a 'windfall' profit anyway? ... Take Exxon Mobil, which on Thursday reported the highest quarterly profit ever and is the main target of any 'windfall' tax surcharge. Yet if its profits are at record highs, its tax bills are already at record highs too. Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion... Maybe they have in mind profit margins as a percentage of sales. Yet by that standard Exxon's profits don't seem so large. Exxon's profit margin stood at 10% for 2007... If that's what constitutes windfall profits, most of corporate America would qualify. Take aerospace or machinery -- both 8.2% in 2007. Chemicals had an average margin of 12.7%. Computers: 13.7%. Electronics and appliances: 14.5%. Pharmaceuticals (18.4%) and beverages and tobacco (19.1%)... 51 Senators voted to impose a 25% windfall tax on a U.S.-based oil company whose profits grew by more than 10% in a single year... This suggests that a windfall is defined by profits growing too fast.... But if 10% is the new standard, the tech industry is going to have to rethink its growth arc. So will LG, the electronics company, which saw its profits grow by 505% in 2007. Abbott Laboratories hit 110%... Berkshire Hathaway. Warren Buffett's outfit pulled in $11 billion last year, up 29% from 2006. Its profit margin -- if that's the relevant figure -- was 11.47%, which beats out the American oil majors. Or consider Google, which earned a mere $4.2 billion but at a whopping 25.3% margin... General Electric profits by investing in the alternative energy technology that Mr. Obama says Congress should subsidize even more heavily than it already does. GE's profit margin in 2007 was 10.3%, about the same as profiteering Exxon's."[2]

Where is the windfall?

10:23 AM

Anonymous Henry N NYC said...

I agree the campaign has gotten dirtier but I think the blame is proportional. In fact, the McCain campaign has run nothing but negative character attack ads. The Obama campaign has yet to run one. The McCain campaign including the candidate has spoken almost in venomous tones and distain about Obama's actions, speeches and very little on issues and content. For the most part the Obama campaign has been on the defense against these attacks. So saying they both have gotten dirty is a little to general.

10:56 AM

Blogger Sadiya Ahmed said...

Agreed, Obama has been on the defense quite a lot but his campaign isn't using it to the full advantage that it can. Instead of wasting time beating back character based attacks, Obama I think needs to just straight out say what he thinks of McCain's policies. He's starting to do that somewhat now with McCain's position on drilling but it needs to be more direct and needs to get at the crux of McCain's base.

Don't get me wrong, I thought McCain's comparison of Obama to pop stars was utterly ridiculous and childish but I think Obama could have responded better by saying "lets focus on the issues" instead of making fun of McCain the way he did.

11:03 AM

Anonymous Anonymous said...

I think that is what Obama has been saying all along, let's focus on the issues, but McCain doesn't have anything to say on the issues so he continues to attack. And the trip to Europe and the ME did make Obama look very presidential and McCain had to do something and quick. I heard that he had an ad ready to attack is Obama had visited the troops in Germany saying that he was exploiting the troops to win the election. What is so disturbing to me is that many people buy into this stuff. They can't think for themselves.

11:10 AM

Anonymous Anonymous said...

I find Obama's energy plan laughable. Common sense should tell us it is just downright wrong. Increasing the number of electric cars on the road while decreasing the amount of electricity America uses by 15%. Anybody besides me see something wrong with this picture? Ever hear of base load power plants? These are the work horses of the electric industry. Obama and his democratic buddies have either passed laws or used courts to block the building of these plants. This means that in 2018, if we don't factor in the increase demand required by electric cars, we should have rolling black outs in this country. I have checked out solar and wind powered electric plants, they are not capable of producing enough electric to replace the base load power plants - wind doesn't always blow and the sun doesn't always shine.

12:17 PM

Blogger Dan said...

I am deeply disturbed in both candidates now, they are moving discussiion of tapping into ANWR as if you can count on it as being reality now. This is fundamentally dangerous to the US in many ways. 1. It perpatually adds to global warming and does not solve the problems we face. 2. The last pristine place in the nation will be destroyed without batting an eye. 3. When we run out of our oil, think of even higher gas prices, if other oil-rich nations decide to let us live. 4. Relying on the oil companies for scratching our backs later is very scary, because they will follow where the money takes them, i.e. China nad India. 5. Finally, there is NO GUARANTEE that the oil tapped from ANWR will ever hit the US market. It could be sold to the Chinese or India. ASK QUESTIONS PEOPLE!!!

12:22 PM

Anonymous Anonymous said...

Honestly, I just can’t believe this. Why does he think it’s the governments job to keep oil prices low??? I wish I was a better writer so that I could better express my outrage. If we want to see oil prices significantly lower then let’s, as consumers, support the alternative energy movement. In general, I think it is important for us to support ‘green’ business that not only provides a social utility but also helps the environment. For example, stops your postal junk mail and benefits the environment. But I digress… Obama’s political idealogy is a slippery slope. Where will liberty be in 100 years if the gov’t continues down the road it is along.

11:01 AM


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