An ANSWER to Our Economic Mess

Just because one stands to make a profit, doesn't change FACT and TRUTH.

Hey folks,

Happy Tuesday to ya. You do not need me to tell you we are in an Economic mess in this Country. You're LIVING it. Problem is, we have an Administration that seems to ignore REAL answers. They have an agenda and they are sticking to it. Lying the whole time. Well, actually, in a way, they are actually telling you the truth.

The President is out there saying that we got Down Graded because of the lack of Compromise. He is actually telling you the truth. We have REAL answers to fix the mess we are in, yet they, Obama and Crew, do not want to hear them. We had an answer to avoid the Down Grade. It was called Cut, Cap, and Balance. Harry Reid refused to even look at it, and Obama said even if it made it to his desk, he would VETO it without even reading it. S&P stated that if we passed it, it WOULD have avoid the Down Grade. So where was the Compromise? Who is it that REFUSED to Compromise? The Republicans were the only ones with an ACTUAL Plan.

No this Administration seems to simply have an agenda and they are sticking to it. So Obama spent more than any other President in history. This Congress has spent more in the past Two Years that ANY and ALL Congresses before them COMBINED. We are at $14 Trillion, some Experts say more like $17 TRILLION, in Debt. What do we have to show for it? Double Dip Housing, heading to Double Dip Economy in general, Record High Unemployment, a Down Grade for the first time in history. Basically an Economy in SHAMBLES. What is their answer? MORE distribution of wealth and MORE spending.

Since it is Tuesday, lets talk about just ONE Private Sector Solution to this mess. Energy. We all know that Higher Energy Costs mean higher EVERYTHING Costs. It cost more to make the Product, ship it, sell it, and for you to Buy it. It cost YOU more to heat your home in the Winter and Cool it in the Summer. It costs you more to just get up in the morning and go to work.

Now we have talked about everything you are about to read, in depth, over the past months and years. But Mark Green from Energy Tomorrow sums it up beautifully. His analogy about a kid in class with his hand raised is CLASSIC. So I hope they do not mind me borrowing this entire Blog Post. Here he is. Mark Green, Energy Tomorrow - And The Answer Is ... Energy

Like the kid at school with his hand in the air, trying to get the teacher's attention, America's energy companies are trying to catch the administration's eye as it casts about for job-creation ideas. The correct answer is right here in the first row: energy.

Last week President Obama said job creation isn't that complicated:

"There are no challenges that we're facing that we don't have the solutions to. We know what to do. ... It's not rocket science. And it doesn't require us to decimate the things that we know are going to help us grow and become competitive."

The president's right. It's not rocket science, though at times the administration makes it seem like something akin to alchemy - proposing indirect measures like tax credits, grants and patent reform - when simpler, faster and more effective options are available. Such as tapping actual shovel-ready projects like the proposed Keystone XL pipeline and permitting greater resource access that would lead to broad job creation from the energy sector. Victor Davis Hanson writes for National Review Online:

"There are vast new finds of natural gas, oil, and tar sands offshore and in the American West, the Dakotas, Pennsylvania, New York, and Alaska. This natural wealth represents hundreds of billions of dollars of savings in imported-energy costs and millions of new American jobs. Instead of lecturing about tire pressure and car tune-ups and encouraging people to trade in clunkers, the president could rally the country to go all out right now to develop its burgeoning fossil-fuel resources to supply our needs while we wait for the development of future green energy."

The fact is the oil and natural gas industry contributed $476 billion to the economy last year and is poised to make a similar contribution this year. Opening access to U.S. oil and natural gas reserves would be a big part of an energy stimulus, resulting in jobs, economic growth and more revenue to government.

At the same time the country would move toward a more secure energy future, one in which domestic sources and Canada could supply 92 percent of our liquid fuel needs by 2030.

The industry has its hand up and waits to be called. Unfortunately, the administration seems not to notice. Instead, the president this week repeated his call for higher taxes on a few energy companies, which research has shown would result in job losses, less government revenue - and less energy.

In that context, Republican presidential candidate Mitt Romney's recent corporations-are-people-too riff on the campaign trail is instructive. Romney made the point that taxes on corporations ultimately hit real people. Reuters' James Pethokoukis fleshes out the concept here. The Washington Post's Brad Plummer blogged:

"Some economists, like Greg Mankiw, argue that (a corporate tax) falls mainly on ordinary workers. Mankiw has cited, for instance, a 2009 Oxford study of nine European countries that concluded that 'a substantial part of the corporation income tax is passed on to the labor force in the form of lower wages.' (The study goes on to suggest that 'in the long run a $1 increase in the tax bill tends to reduce real wages at the median by 92 cents.') Given that Mankiw is advising the Romney campaign on economic issues, Romney would presumably agree. That's hardly the consensus, though. Princeton economist Uwe Reinhardt has noted that economic models are getting increasingly more sophisticated -- trying to account for factors like how easy it is for different sectors to substitute labor for capital. He points to a 2010 review of these newer models by the Congressional Budget Office, which concluded that about 60 percent of the corporate tax ultimately falls on the owners of capital."

For the sake of argument, we'll use Reinhardt's model: 40 percent of the administration's proposed energy tax increase would fall on industry employees (real people). The other 60 percent would be borne by the "owners of capital." But who are they?

Here's who: We know that 29.5 percent of oil company stock is owned by mutual funds, owned by real people; 27 percent by pension funds (real people), 23 percent by individual investors (real people), 14 percent by IRAs (real people), 5 percent by individual investors (real people) and 1.5 percent by corporate management.

So, using the CBO's numbers and these ownership stats, for every $100 in higher taxes on oil and natural gas companies, just 90 cents would be borne by corporate management. The other $99.10 will fall on "regular" folk, the millions of Americans who work for or have invested in these companies in one way or another - which is why the administration's tax proposal is so misguided.

I really do not have much to add to this. Well, except maybe this. For those out there that may be saying, "Peter, this is an Energy guy. He stands to make a Profit. So of course he is going to talk up Energy." Just because one stands to make a profit, doesn't change FACT and TRUTH. Remember OCAN? YOU go out and create a NEW Paint. OCAN. OCAN stands for One Coat All Needed. You go out to the market and you convince people that if they buy this Paint from you, they will never again have to paint, whatever it is they paint. Be it a house, or a Car. A Deck, or a Toy. OCAN is also "Environmentally Safe." One Coat. Less Garbage. Yeah it costs a bit more, but you will never again have to worry about whatever it is you are painting. Do it ONCE, never again. So? Some people buy it. If it works, they tell others. Others buy it. Companies buy it. It takes off. YOU get Rich. Of course you are out there trying to sell your Product, but that doesn't change FACTS and TRUTH. If it works they way you are telling people, then they Profit from it. You Profit from it. The World is better off for it. It matters NOT that you, who created it, Produce it, and Ship it, so people can GET IT, makes a Profit. Everyone wins.

These are REAL Solutions, to REAL Problems, faced by REAL people. It's too bad that we have a Teacher that is ignoring the Smartest Kids in Class to make the Dumb ones feel better about themselves.
Peter

Sources:
Energy Tomorrow - And The Answer Is ... Energy