Entrepreneurs beware. Business has become the target of attack in this political season.
For example, politicians have again called the "fat cat" executives of the major U.S. oil companies to testify before Congress and explain their skyrocketing profits. These noble politicians are berating these evil, greedy capitalistic pigs for heartlessly forcing poor Americans to pay $4 and more per gallon for gasoline.
What a crock!
This is wrong in too many ways to count.
• Point one: These executives are running their respective companies for their shareholders, many of whom are current and future retirees who own shares of these oil companies through their pension plans. The oil companies are some of the few stocks that are up this year and offset the losses on the rest of the pension-plan investments.
• Point two: Almost half of profits go to the government in taxes. Isn't the government benefiting from these profits? Why doesn't the government offer to give up part of its share through tax reductions or incentives?
• Point three: About half of profits left after taxes go to find new oil reserves, which are more and more expensive to find. Do politicians really want oil companies to spend less money finding oil so we are ever more dependent on oil from hostile foreign governments?
• Point four: The intent of the "cap-and-trade" policies endorsed by all the presidential candidates is to make it more expensive to use energy that emits carbon into the atmosphere so that consumers will cut back. If implemented, these policies are expected to double electric bills. So here's my question: When market forces make Americans cut back on carbon emissions when they cut back on driving due to the high cost of oil, the oil companies (who have little control, since they are subject to the bigger market) are evil and greedy. But when politicians do the exact same thing, they are being noble?
• Point five: By my rough calculations, if you cut oil-company profits to zero and totally destroyed their incentive to provide gas, this would only reduce gas prices (if you could find any gas) by about 20-30 cents.
• Point six: Aren't these the same politicians who are restricting the supply of oil by limiting where oil companies can drill? They are also preventing the building of new refineries because they don't want them to be built in their voters' backyards. The number of American refineries has declined by more than 50 percent during the last 30 years. No new refineries have been built since the 1970s.
There are, of course, many more points to consider. My fear is that, much more than in the past, business seems to be one of the key targets to attack during this political season. Populism is defined as discourse that pits "the people" against "the elites." In my view, that's exactly what is happening here: The political elites are taking a populist approach in advocating measures that will actually hurt the very people whose electoral favor they seek. As Pogo once said, "We have met the enemy, and he is us."I hope people will see through this anti-entrepreneurial discourse.
Hal Heaton is affiliated with the BYU Center for Entrepreneurship. He can be reached via e-mail at [email protected]