The Bush Plan for Subsidizing the Oil Companies

by Timothy Egan

...at the White House...a week ago, President Bush touted tax breaks for oil companies that have just posted the largest profits in the history of American business. Yet he was dumbstruck when asked about the prospect of $4-a-gallon gasoline, a price that will force many families to choose between food and basic travel.

“Wait — what did you just say?”, the president asked after a reporter solicited his advice for Americans facing that price, which was predicted by many analysts. “Oh, yeah?” Bush said. “That’s interesting. I hadn’t heard that.” He doesn’t get out much, understandably.

But had the president been in California over the weekend, he would have found consumers paying what he apparently has yet to fathom — more than $4 a gallon at some stations. And then on March 5, oil reached its all-time, inflation-adjusted high on the global market: $104 a barrel. Remember that number. Because when oil was half that price, three years ago, Bush said the market alone was sufficient incentive for Big Oil to make added investments. But now that the price is over the $100 mark, Bush wants to continue giving breaks to oil companies rather than shift those incentives to alternative fuels, as many in Congress would do.

For Exxon Mobil, there was $40.6 billion in incentive. That was their profit last year — earning $77,220 a minute. Fine. Greed is good. All hail the free-market and shareholders who are seeing a nice return on their oil stocks. But asking the American taxpayer to indirectly subsidize this is grand folly at a time when the world’s oil reserves will soon be in decline.

Bush implied that the oil industry would not build new refineries without tax breaks. Wait a minute — they haven’t built a refinery for 32 years. What they have done is take refineries out of commission. Scarcity is also good, as Enron showed when they ginned up the phony California energy crisis seven years ago.

It’s hardly surprising that Bush had a bar-scan moment similar to his father’s befuddlement over something any first-grader could explain at a supermarket counter. But a man who is clueless about the price of a commodity so elemental to everyday life should not be giving advice on the value of that commodity.

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Dear Golem

by Michael A. Hoffman II

You voted for George W. Bush. Now the price at the pump is approaching $4 a gallon, inflation is out of control and the buying power of the dollar has been seriously eroded. On March 2, diesel prices rose to a record $3.99 a gallon in Spokane, Wash., compared with $2.62 a gallon last year. Diesel is of course the fuel that powers the trucks that move your groceries, your mail and your packages, since you, dear Golem, believed George W. Bush when he told you that America does not need to improve and expand rail and trains or other forms of mass transit, because they are bad for Big Oil. Well, Big Oil is doing very well indeed these days. How about you?

"[President Bush is] a thief ... a wastrel who squanders a vast sum of the nation's wealth on what turns out to be a recruiting drive certain to multiply the host of our enemies...Under the three-strike rule available to the courts in California, judges sentence people to life in jail for having stolen from Wal-Mart a set of golf clubs or a child's tricycle. Who then calls strikes on President Bush, and how many more does he get before being sent down on waivers to one of the Texas Prison Leagues?"
--Lewis Lapham

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