Comments about ‘John Hoffmire: Why do countries with oil reserves often do worse than they should?’

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Published: Monday, July 7 2014 7:30 a.m. MDT

Updated: Wednesday, July 9 2014 4:16 p.m. MDT

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JoeCapitalist2
Orem, UT

"Some oil-rich countries regularly charge little or no taxes to its citizens, this makes rulers less accountable."

Is that why far-left leaders like Obama want a large portion of voters in this country completely off the tax rolls?

I find it interesting that the "income inequality" crowd is not at all interested in the actual standard of living of the "poor" in any given country, just the difference between the wealthiest and the least wealthy. Quatar might be a country where the poorest person is a millionaire, but because there are a lot of billionaires the wealth disparity is high, so that is obviously worse than if everyone were equal as thousandaires.

Ernest T. Bass
Bountiful, UT

Corruption and greed.

Tekakaromatagi
Dammam, Saudi Arabia

Why? Answer:Corruption.

If one is wise, they budget for the busts of the cycle. The booms then are extra. But if they were wise they would not be corrupt.

FreedomFighter41
Provo, UT

Because the wealth is not distributed fairly.

When only 1 percent has wealth, bad things happen.

But don't worry, this is already coming here to the United States. We are quickly becoming a 3rd world Latin America country. Infrastructure is crumbling, education suffering, and buying power limited for the middle class, and the wealthy 1 percent control everything.

Los United States, here we come! Enjoy the ride! Reaganomics and the repubs made it happen!

Z
South Jordan, UT

Oil is only one of the many historic generators of wealth in the U.S., thus in this context the graphic has little real meaning. In terms of the total U.S. GDP, oil has always been only a partial contributor nationally (although regionally it may make very large contributions).

Shimlau
SAINT GEORGE, UT

FreedomFighter41, and how would you recommend that this wealth re distribution be obtained? tax the rich and give it to the poor? What would that achieve? If you want to confiscate the property of the producers and give to the non producers, eventually, the producers will see that there is no reason to keep on producing, and they will stop. then there will be no wealth to redistribute. It's easy to critize, but how about some workable solutions? has Marxism/communism succeded anywhere, or total socialism? what are your ideas?

2 bits
Cottonwood Heights, UT

IMO It's not if your country has oil or not. It's whether your country's economy is based on that oil or not.

Norway didn't necessarily manage their oil industry to balance income inequality. It just so happens that although oil revenue is huge in Norway... they have many other industries as well. They also have different priorities than the countries that have been pulled apart by their oil fortunes.

America is another good example. We have a LOT of oil, but it's not what our country and our economy is based on. It's just a small part of our GNP.

But for an example of the other extreme... look to Hugo Chavez and Venezuela. A grand concept... but it didn't work (did it)? Venezuela still has some of the poorest of the poor, and they are still flocking to America for economic opportunity (even though we don't promise them oil royalties).

Most Americans own oil companies. Most American oil companies are owned by stockholders, of which the majority are mutual fund companies. If you have any mutual funds in your IRA... you own stock in oil companies.

UtahBlueDevil
Durham, NC

"tax the rich and give it to the poor?"

Every time I see this, it gives me the giggles. Where oh where are the poor being handed money - to the point that they are content with their status in life. Good grief, sometimes rhetoric gets said so often, people actually believe this.

Working in the industry, having traveled to many of these locations, oil is the least of the reasons why their is wealth disparity. The economic conditions only were are highlighted when oil money is brought into play - but the power structures were very much in place before oil was a significant contributor to wealth creation. For example, in Mexico the country has had a deep "class" divide for generations. This has nothing to do with oil. There was no real "middle class" in either Mexico or Brazil. That situation is rapidly changing... and if you were to tak ea look at his data in 10 years, the results would be much different, as attitudes towards class are changing.

This is ins't oil greed... this is centuries of class systems that are slow to change.

What in Tucket?
Provo, UT

Most of these oil rich and thus poor countries are socialist, totalitarian. Saudi Arabia is one of them. They need property rights, the rule of law, lower taxes, simpler tax structure, an inoffensive bureaucracy, you know what I mean. Free Enterprise.

2 bits
Cottonwood Heights, UT

@UtahBlueDevil,

You are right that it's not just oil. It's a society built on centuries of class based roles, then you throw oil wealth on top of that. Saudi Arabia, Mexico, Central America, South America, India, Africa... have had accepted class systems for generations and generations, then throw the instant wealth of oil money on top... and it's no big surprise that a few families benefit... but most don't.

America doesn't have that kind of class system (at least not like Saudi Arabia, etc). Same goes for the countries reaping the oil wealth of the North Sea.

That's why America doesn't have the royal families and oil princes they have in the middle-east (because they were already used to and accept their class system), and oil wealth is just part of it.

============

As for getting the giggles at the mention of redistribution of wealth and never seeing it happen in the USA... Ever seen someone pay taxes? Ever seen anyone cash a welfare check, food stamps, or tax refund check?

Where do you think the funds to pay the welfare check, refund check, etc came from? The magic government money tree?

GaryO
Virginia Beach, VA

Hey Shimalau -

" tax the rich and give it to the poor? What would that achieve? "

How about just bumping back the highest tax rate to where it was in Pre-Reagan days?

"What would that achieve?" . . . REVENUE . . . and the ability to pay our bills.

Back in 1969, when the highest tax bracket 71%, this nation fought the cold war and the Viet Nam war, paid for social projects, and sent a man to the moon . . . AND had budget surplus because we had enough REVENUE.

When Reagan came along he reduced taxes for the highest earners from 71% in successive stages gradually down to 28%, while raising taxes five times for the lower tax brackets.

But without that contribution from the big earners, our revenue was much lower than it otherwise would have been. Consequently, Reagan TRIPLED the debt.

And no, it wasn't Reagan's policies that caused the economy to rebound. It was the fact that the price of world oil plummeted to less than 1/3 of what it had been during the Carter administration, no thanks to Reagan.

We still have low taxes for the highest earners. WHERE are the jobs those "job creators" are supposed to create?

UtahBlueDevil
Durham, NC

If "welfare check, refund check, etc are forms of wealth redistribution, they are doing a terrible job. Helping the poor and those in need "to me" is not wealth redistribution. To me, wealth redistribution is where state policies dictate and level off income inequality. What we have is a long shot away from that.

Lets be real honest here. No one pays in proportion to their benefit. No one. Everyone if paying into a large fund where money is allocated. Do airlines truly pay the fully loaded coast of managing an air transport system? Are general funds used to pay the cost of operating the TSA and FAA? If the answer is yes, then Delta and Southwest Airlines are too recipients of so called "wealth redistribution".

The only time you don't have what is being called wealth redistribution as being used commonly today is when people receive in benefit equal to what they contribute. I can't think of an example where that is a reality. Every family with a child receives more in benefits through the educational system then they pay. That is not wealth redistribution in my definition.

2 bits
Cottonwood Heights, UT

@UtahBlueDevil

I never said anybody "pays in proportion to their benefit". That is not a reasonable expectation (strawman).

I have no problem with welfare, tax refunds, food stamps, etc.... I'm just pointing out that we already do redistribution (in small ways) so you don't need to get the giggles when you hear that concept.

I agree we are doing a terrible job of it too BTW.

We need the programs I listed. But it is re-distributive (no need to giggle). Any tax code that takes from some, and gives to others.. is "re-distributive" (google "redistribution").

I'm not against any redistribution. I'm just pointing out that we do it, every day, every paycheck. So you don't have to giggle (like it doesn't happen in America).

Many leftists feel any tax code (to be effective) MUST be re-distributive. America's Medicare Chief said, "any health care system that is civilized and humane must redistribute wealth" (google "Former Medicare Chief: Wealth Redistribution - CNNNews).

Leftists think the fix to income inequality MUST be redistribution. The leftist solution to almost ANYTHING is redistribution. Ask Marxist...

Some even think oil revenue should be redistributed (ask Chavez).

UtahBlueDevil
Durham, NC

@2 bits.... it wasn't just Marx that felt this way. but also the father of Capitalism himself who favored load balancing the need via taxes....

Smith wrote ""The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.""

Smith goes on to say "It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

So it isn't just leftist and socialist who are proponents of this system. For example Smith said this of public education ""For a very small expence the public can facilitate, can encourage, and can even impose upon almost the whole body of the people the necessity of acquiring those most essential parts of education."

This just emphasizes that on maters of common sense, left and right are usually not all that far apart.

GaryO
Virginia Beach, VA

UtahBlueDevil –

“This just emphasizes that on maters of common sense, left and right are usually not all that far apart.”

What??!

You’ve got to be kidding.

Common sense is completely inconsistent with Right Wing “Ideals.”

Adam Smith does not live in Right Wing La La Land.

That is the domain of Rush Limbaugh, Sean Hannity, Glen Beck, and 20 million others who believe as they do.

There is NO room for reality, truth, facts, and common sense in Right Wing La La Land.

JoeCapitalist2
Orem, UT

GaryO: "There is NO room for reality, truth, facts, and common sense in Right Wing La La Land."

If your post is truly indicative of the liberal mindset, then you are absolutely right about conservatives being miles apart from that ideology.

But in your mind, all of us are just crazy, right?

I may disagree with a whole lot of things that liberals believe, but I realize that there are a lot of smart and caring people on that side of the political aisle. To label everyone who disagrees with you as stupid idiots just isn't all that productive in my humble opinion.

2 bits
Cottonwood Heights, UT

@UtahBlueDevil,

I'm not against taxes. We need them.

All taxes aren't "redistribution". Education, military, transportation, courts, police, fire, etc... (not redistribution). Redistribution is when you take some from one person's pay check, and write a check to another person (refunds, welfare checks, food stamps, etc). That's "redistribution". And I'm OK with it. Just pointing out that it already happens. So nobody needs to snicker and pretend we don't already do it.

I don't disagree with Smith (whoever he is). We need taxes, and we need schools, police the whole works. And we need programs to help the poor and disadvantaged, and even a little redistribution. I'm not against it... just pointing out that we already do it.

====

Left and Right aren't far apart. Some evidence... Bush and Obama... pretty much the same. Switch out Bush, put in Obama.. what really changed? Nothing. Democrat majority or Republican majority... not much changes.

While left and right are not far apart... the RADICALS on both sides are WAY far apart, even from those of us in the center, even more apart from the other sides radicals...

Pendergast
Salt Lake City, UT

Ernest & Tekakaromatagi are on to something.

The oil company is state run in Venezuela & Saudi.

I am certain its that way in Iran too. Lets ask the Shah?

UtahBlueDevil
Durham, NC

@ 2 Bits... Smith = Adam Smith.... it was his writings that much of capitalism is based on.

Ultra Bob
Cottonwood Heights, UT

Discovering oil is like pulling out a wad of bill on the street. Suddenly you become very interesting to other people.

The world market for oil is owned and operated by a small number of very rich and powerful people who don't want any new competitors. We know how they treat undesirable competitors, and his former citizens.

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