Rhinocrisy

Some Democrat Senators are trying to get a windfall profits tax put in place on oil companies, and alarm bells are ringing. Especially since some Republican senators are apparently discontented as well, recognizing that high gasoline prices are going to be a significant electoral issue this year. Chris Dodd (D-Connecticut) tried to put an amendment onto the latest megalithic spending bill winding its way through Congress^* taxing profits 50% on oil revenues over $40/barrel. Punishing bloated capitalists^† is an easy way to earn yourself points when consumers are suffering. The bill currently in play is sponsored by Byron Dorgan of North Dakota, who has tried to get such a bill passed before, post-Katrina, and includes exemptions for money reinvested in further exploration. Even Arlen Specter says it’s “worth considering” a windfall tax amongst “a number of options”.^‡

A windfall profit tax is fine by me, although I do think if people are suddenly going to start taking anti-capitalist positions because of obvious market failure, they should at least have the decency to stay that way.^§ And lest you have any doubts about how this is being played, there’s little or no talk about oil shortage or how global demand is going to grow; that sort of talk would lead to talk of “conservation”, which during an election year is verboten. Senate Democrats (e.g. Harry Reid) are talking about removing the gas tax to ease the burden on consumers. Removing the gas tax. Anything to allow Americans to continue gassing up without worry. This is bad medicine: treat the symptoms, not the disease.

Anyhow, all this talk of a windfall profit tax is bringing up the last time there was a windfall profits tax, in the early 1980s. Like the unfortunately named House Majority Leader, John Boehner (R-Ohio):

“The windfall profits [tax], when it was tried in the ’80s, failed miserably because it led to less discovery. It led to less production and was a failure,” Boehner said. “There is no reason for us . . . to go there again.”

There’s also a whole slew of papers and talking points reiterating the above line, like this Heritage Foundation article. These make basically two claims: first, that a windfall profits tax would not generate much revenue, since the one in the 1980s didn’t, and second, that the tax sets an unnecessary burden on domestic producers and would depress production.

The former claim is perhaps true, since the 80s tax made a paltry $40 billion net, as opposed to the projected $369 billion. This is because the price of oil crashed in the 80s as a result of extremely good conservation measures, and eventually OPEC ramping up production again; after 1986, the price of oil dropped below the floor set for the windfall profit tax; after this point there was no more windfall to tax, and even before then declining prices made the tax untenable. If such a situation were to repeat itself, we’d have little cause for complaint - if the revenue vanishes because of a collapse in the price of oil, well and good. This, however, should be no reason not to pass the tax by itself.

The latter claim usually cites a Congressional Research Service study from 1990; in light of recent events the author (Salvatore Lazzari) published an update, available here. His argument is this: since the price of oil is determined on a global market, a windfall profits tax imposed on domestic producers means that the effective price per barrel of oil is reduced by the amount of the tax, per barrel. We may then compute, based on what we think is the price elasticity of supply for oil, the effective reduction in oil output this must have precipitated. Based on that, the study concludes that there was (depending on what the price elasticity actually was) somewhere between a 3 and 6% reduction in domestic production in the 1980s.

I’ll make the caveat that my economics is for shit, here; the study’s calculations are reasonable, although one might debate the price elasticity figures employed. In the original study, the lower-bound was 0.5, while in the 2006 update the author acknowledges that lower figures might be correct. I’m not qualified to debate this matter.

But what I do take issue with is the study’s assumption that the full value of the tax should be deducted from the price per barrel. Lee Raymond is adequate evidence of this: capitalists eat profit. Not all of the profit is reinvested, and so we needn’t assume that in the absence of a windfall productivity would suffer. It would just mean some rich people would be a little less filthy fucking rich than they otherwise would have been. This is a key assumption made by proponents of the tax and one that the study fails to acknowledge.

All of that said, I think this tax is a waste of time. And as a political dodge, it’s worse than ineffective, since it distracts from actual measures that would promote real reductions in the price of oil. Giving rebates from tax revenues to customers would certainly be a popular measure, but it’s, first, not going to have any impact on the price of oil, and second, couldn’t possibly provide substantial relief from high gasoline prices - probably 1 or 2% at most. And since we’re unlikely to see drastic increases in output from any major producers (all of whom are running basically at capacity), we’re not going to see a drop in gasoline prices unless we force conservation. Anything that detracts from that is pointless.

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^* Which apparently has gotten George Bush’s knickers all in a twist. After spending us $8 trillion into debt, he and the Senate Republic leadership have suddenly decided they are fiscal conservatives again and want to cut the porky bill from $105.6 billion down to a lean $92.2 billion. Ah, election year!

Quimby: Demand? Who are you to demand anything? I run this town! You’re just a bunch of low-income nobodies!
Aide [whispering]: Election in November! Election in November!
Quimby: What? Again!? This stupid country.


^† Like Lee Raymond, CEO of ExxonMobil, who just retired with a $400 million golden parachute. At current gold prices, this would be a parachute weighing 20 metric tons.

^‡ Of course, in the same interview he mouths off about how he’s passed legislation outlawing OPEC, which “get[s] together, reduce[s] the supply of oil, and that drives up prices,” a mysterious and ignorant statement considering that (a) the Kingdom of Saudi Arabia, the major OPEC producer, most definitely does NOT connive against the U.S., and (b) OPEC has increased their production quotas repeatedly in past months, and just recently (a few days back) announced they’re going to keep them at 28 Mbd total, almost at full capacity. So take what he says with a grain of salt.

^§ In other words, I’m bitter because I was on the “dispossess the ruling class” wagon way before these ruling-class jerks showed up on it.

I am tempted to write 750 words on this and put everybody to sleep. Instead, let me keep it short. Every American attempt to improve the condition of health insurance makes me want to throw men in suits from rooftops. The latest is Massachusetts’ clever scheme that will require all residents who can afford it to buy health coverage and will subsidize insurance for the remainder.

This plan will give private companies a captive market, reducing what minimal incentive they now have to keep prices down.

People who compare the situation to car insurance, which is also mandatory in the U.S., forget that people who don’t want car insurance don’t need to get a car. There is no similar way to opt out of Massachusetts’ health plan.

The only people who opposed the plan were standing up for small businesses, which will be penalized if they fail to offer their workers health coverage. While it is valid to note that some marginal businesses will close down or move when faced with the new cost, that is beside the point. The problem is not that this law is anti-business but that it is nowhere near anti-business enough. It picks on small businesses while providing a guaranteed cash stream to the big insurers.

The alternative is just the other side of that huge one-way mirror called the Canadian border. Go over and take a look sometime.

And now, back to our regularly scheduled feature: A 3 a.m. demonstration against the IMF in Washington D.C. that I somehow completely missed! (I must not have been at the Fairmont that night.) I find screaming to be stupid, annoying and unhelpful, but this event sounds funny all the same.

The Mayday general strike seems to be taking root around the Bay Area. I know that the unions and many immigrant workers plan to take the day on — on the streets — rather than going to work. Maybe I’m too quick to giggle, but I find it funny that a movement with this mission statement

The increasing militarization along the US-Mexico border — by now a veritable war zone — serves as a brutal reminder that all borders operate as integral and deliberate parts of exploitative economic systems, inseparable from capitalism and neoliberal globalization. The US-Mexico border, and all other borders between nation-states and governments, are reproduced in our minds and throughout society, serving to enforce and legitimize the boundaries, disparities, and exploitative relationships between people. The demand for full amnesty and free movement of people, therefore, aims at justice for immigrants at the same time as it aspires to a world free from all such destructive divisions. More information on our analysis is available here

would also call for people to bring pots and spoons to raise a ruckus in a cacerolazo. Articulate vs. deafening?

Someone after my tiny heart created this flyer (front, back). See you there? What are you seeing in your community?

A number of interesting and alarming studies have come out in recent months underscoring the horrific pace of global warming. The most dramatic of these was one that claimed that the Atlantic currents that warm Europe have been shutting down. That claim, widely hyped in the press (and believed by yours truly), was probably overblown, it turns out. But other developments have a little more heft to them.

For example, a pair of studies came out in Science last month that examined paleoclimate evidence of sea level rise in the last interglaciation, and concluded that sea level rise of something like 4-6m might come upon us quicker than we might imagine. Since something like 450 million people live beneath the 10m mark, this sounds pretty problematic (the Gore-narrated “An Inconvenient Truth” illustrates this graphically with coastlines flooding and talks about refugee crises). Not to worry; last time the rate was 11 mm/year, which gives us something like 270 years to run away from a 3m rise. I think we’ll manage to avoid immediate catastrophes.

So, don’t panic. But DO panic. An assload of studies on Greenland give cause for concern that that pile of ice is thinning rapidly, and West Antarctic ice shelves are breaking up, contributing, by themselves, an astounding 0.4 mm/year to sea level rise. What’s most alarming about this to scientists studying climate is that all of these processes were more or less unanticipated.

If you believe this is the product of anthropogenic forces, this is all rather depressing news, since it seems there’s little being done to stop this particular trainwreck. Kyoto is set to come in to force in 2008, which means that the United States, the world’s number one emitter, is almost certainly not going to be in compliance (barring a miracle - I burn a candle in your name, Mithra). The number two emitter, China, is exempt. And even idyllic countries like Canada might be on the outs, now that the Conservatives are in power (Harper is apparently a Kyoto opponent). And, let’s not forget that I hate Kyoto anyway - in 1990 we were experiencing a rise of 2 ppm/year of CO₂, hardly small nuts, which makes all this agonizing to achieve those cuts pointless (or less pointy, anyway). As to what happens in 2012, when Kyoto runs out, it’s anyone’s guess. We’ll find out in November.

New poll on the right.

I see that although some cad voted to ban breasts in our latest poll, no one’s elected to ban breast-feeding so far. Hurrah for that, since breastfeeding is almost undisputably an unmitigated good.^* Aside from the obvious nutritional benefits, breastmilk contains lysozymes and immunoglobulin A antibodies, which protect the infant from bacterial (etc.) infection until it can develop an immune system of its own. No formula (the favorite alternative to breastmilk), as far as I know, provides the same, which at least partially accounts for the significantly higher rates of mortality and manifold increase in hospitalization rates amongst formula-fed babies. This, incidentally, is what prompted a bunch of people to call for a boycott against the Nestle corporation for marketing formula in third-world countries. Since formula is usually sold in powdered form and must be reconstituted with possibly contaminated water, this is a significantly greater risk to the child, compared to breastmilk, which is free, provides immune protection, and has other ancillary benefits as well.

There’s some indication that breastfeeding has other, long-term benefits, as well, including general mental development, possibly reducing obesity, and reducing the likelihood of childhood cancers.

It’s unfortunate, then, that breastfeeding rates are less than 100%. In the United States there’s a particularly high class discrepancy in breastfeeding rates that’s believed to be a product of a combination of lack of education on the subject (which, frankly, is dismal - even the Mayo Clinic says blithely that formula is “perfectly acceptable” as an alternative to breastmilk without discussing its failures), time and work pressures, and, unfortunately, the availability of the WIC formula credit.

We’re still at a vast improvement from the 1950s, when breastfeeding went completely out of vogue and was actively frowned upon by ignorant boob doctors^†. But as more women are forced into (or choose to enter) the workplace, hopefully this positive trend won’t backslide.

Post scriptum: Yes, menstruation won in the poll. No, no one is surprised.

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^* The one bad thing I’m aware of is that dioxins, which are fat-soluble and accumulate in the mother’s body throughout her life, can only be excreted through fatty discharges, viz., breastmilk. The mother’s first-born will thus receive her mother’s full complement of accumulated dioxin while nursing. Not a great way to start off life, but it’s probably still better to breastfeed.

^† Parse that as you like.

Crank volume, gather co-workers, click.

(For the song alone, click this.)

In Pinnacles National Monument, I took a couple hours to make cursory observations of the Life of Condor.

California condors are big. I mean big like I was using binoculars to make out one guy’s head when its flight feathers scraped my forehead. Big like it was landing on a rock a quarter mile away and I had to hold onto a tree-trunk from the wind.

They are ugly. Fugly. Rumor has it that they went damn-near extinct because their mothers kept kicking them out of the nest before they could fly after telling the fathers, “You can’t convince me that I gave birth to that thing.”

They are dominant. One landed on a rock and a big old redheaded turkey vulture yielded its seat as readily as a sparrow giving up to a jay, a jay to a crow, or a crow to a vulture. But those metaphors don’t do the size difference justice. The condor was a good twice the size of the vulture. The nervous buzzard moved to a nearby pinnacle of rock and sat there for a minute until the condor ruffled its feathers. That sent the vulture immediately off on a high wheeling flight to find a new roost.

They are slow and strong. They eat dead calves. It takes them a day to get around to eating. At that point they fly around, pulling on the cadaver. A crew member said they will drag it all over unless the corpse is chained to the ground.

They look dumb, even if they are smart. They wear numbers on their necks, like football players. More than 90 percent of their food comes from people.

They travel in packs. They go on road trips together — 11 of them were gone last week and came back just before the weekend.

In other words, the life of condor is one of being big, ugly, dominant, slow, strong and dumb. Why do I think it should be the national emblem of the United States?

Oh yeah. A couple counter-arguments:

They are organic. At Pinnacles, the feeding crew uses only organic calves. (That keeps the condor meat organic, making it more marketable at fine stores like Whole Foods.)

And the real reason: they are on their way back from extinction.

Here’s a classic evil supervillain line, from arch-fiend Silvio Berlusconi, who is refusing to concede defeat in the recent Italian elections: “Did you think you were about to be free of me?”

Fortunately I have discovered that his secret vulnerability is being pantsed. Anyone willing to fly to Italy?

The fate of all things. This was once Highway 1, the main paved road down the coast of California. Today it is quiet enough to hear the tiny waterfall from 50 meters, songbirds, the wind rustling flight feathers of hovering hawks. A mile below, the current highway is closed by a landslide, so the land is almost empty of humans from the ocean across to Interstate 280, a very rugged few miles away. It is encouraging, in the middle of the disaster-prone Bay Area, to visit a place where one can see that chaos and destruction of human endeavors is not, in the long term, the end of the world.

Good news: Speaking of trapped rats, the Bush Administration itself is in an ever-tighter spot. George Bush’s approval rating in California is now the lowest of any sitting president since Richard Nixon on the eve of his resignation.

Bad news: A president that lacks the public’s trust but has thousands of nuclear missiles might not be such a good thing after all. (Especially when he knows that people only understand force.)