A Slice of Dennis Kucinich's Economic Wisdom

I was doing a search for "windfall profits oil tax" after hearing about it in the April 2 edition of Geov Parrish's This Day in Radical History. I didn't find anything because the Google search turned up only turned up 19 hits. Scanning the results, I came across this incandescent economic stupidity, posted in June of 2000, from U.S. Representative Dennis Kucinich:

Gas prices soared to more than $3 a gallon in Chicago over the weekend, and one local congressman is doing everything he can to make sure that those prices don't hit Cleveland.

U.S. Rep. Dennis Kucinich says that he will introduce a three-part plan that will stop what he calls the "price gouging of Americans at the pump."

So far, everything's just as you'd expect a politician to say.

"The oil companies are making money here," Kucinich said. "We need to tax them right here at the refinery level, and a windfall profits tax at the refinery level will go a long way to showing the oil companies the American people do not have to take this lying down."

The windfall profits oil tax was first introduced in 1980. It made $40 billion off oil companies before it was repealed in 1988.

Copyright 2002 by NewsNet5. All rights reserved.

*blink*

Mr. Kucinich thinks gas prices are too high.

So...he says we should tax oil producers at the refinery level.

*pause*

And people wanted this guy to be President?! Exactly what did the hell did Mr. Kucinich think was going to happen if this occurred?

Fantasy Kucinichland:

• Oil Producer: Man, it sure feels good jackin' up prices during these high-demand months! I'm visualizin' the typical downtrodden middle class American cursing Big Oil for chargin' him three bucks a gallon! Hoo-wee!
  
• ...tax passes...
  
• Oil Producer: Lawd, that tax sure cuts into my bloated profit margin like a rattler through a city slicker's designer jeans! Why, oh why did this happen to me?
  
• Mr. Kucinich: You hurt consumers with your immoral gas prices and they've decided to punish you. Ha! Villain!
  
• Oil Producer: I have seen the error of my ways. I'd better charge less for oil and make everyone happy again!
  
• Millions of Little Guy Americans: Yay!

Whatever he might have thought would happen, what's more likely is this:

Reality:

• Oil Producer: Since people buy more fuel during this part of the year and are willing to pay higher prices to get it, I'll charge distributors more in order to cover my higher production costs.
  
• ...tax passes...
  
• Oil Producer: Well, now that I'm being forced to give up 20% of my sales to the government, my revenues are lower than before. However, demand is still high and the actual costs to produce this oil haven't changed any. I didn't deserve this.
  
• Mr. Kucinich: Yes you did. You charge too much for gasoline! You're screwing them!
  
• Oil Producer: I charge what distributors are willing to pay and they are willing to pay from the revenues of customers who are willing to pay what those customers can afford. What's wrong with that? Now, I have to increase prices to cover these extra costs, costs that have nothing to do with producing gasoline. Who's getting screwed now?
  
• Millions of Little Guy Americans: Boo!

And I thought Howard Dean was bad...

Posted by Drizzten at April 26, 2004 05:03 PM