In a column that will in appear in Sunday’s Washington Post, George Will laments the fact that the United States isn’t more like the Locrian’s of Ancient Greece, who had a unique approach to the problem of overzealous legislators:
“A Locrian who proposed any new law stood forth in the assembly of the people with a cord round his neck, and if the law was rejected, the innovator was instantly strangled.”
A bit extreme, granted, but I’m sure it provided a powerful incentive to any Locrian leader who would otherwise try to use his power to inflict his will on the people. As Will points out, though, no similar dis-incentives exist today:
If Congress had the rule of the Locrians, a people in ancient Greece, it would have been fatal to Sen. Byron Dorgan, the North Dakota Democrat. He recently got 34 colleagues, none of them Republicans, to vote for his measure to punish oil companies for earning profits that, relative to revenue, were unimpressive.
One would think that Dorgan’s proposal would come after an investigation, or at least with a rationale to support the idea that oil companies should be punished merely because they made alot of money, but that would not be the case.
“None of us know much about what is happening with respect to pricing,” said Dorgan, disclaiming a competence rarely ascribed to senators. But, quickly recovering from uncharacteristic humility, Dorgan joined Senate colleagues in exhibitionistic indignation about the fact that the five largest oil companies, led by ExxonMobil’s $9.9 billion, had combined third-quarter profits of $32.8 billion.
We don’t know what’s wrong, but its just go to be wrong, doesn’t it ? That appears to be the basic rationale behind Dorgan’s proposal for a windfall profits tax, and its highly unlikely that he gave any consideration to the overwhelming evidence that such a tax would be damaging not only to oil companies, but to the economy as a whole:
Although the real rationale for a windfall profits tax is to allow legislators to strike a histrionic pose, Dorgan’s tax, say Shapiro and Pham, would have produced gross revenue — depending on where the price of oil is in the range between $45 and $60 a barrel — of $18.5 billion to $104.9 billion over five years. But because the windfall profits tax payments would have reduced corporate income tax payments, the government’s net, say Shapiro and Pham, would have been only $8.6 billion to $48.7 billion.
They calculate that 41 percent of oil company stocks are owned by pension plans and individuals’ retirement accounts. Hence much of the tax’s burden would have fallen on current and future retirees, reducing both the market value of, and dividends paid by, those stocks. The cost to all the oil companies’ shareholders, in forgone stock appreciation and dividends, would have ranged — depending on oil prices and inflation — from $21.3 billion to $121.8 billion per year. Shapiro and Pham also conclude that the windfall profits tax would have discouraged domestic oil production and increased U.S. dependence on imports from the Persian Gulf. And from Venezuela, thereby funding the left-wing fascism of Hugo Chavez.
As with most of the legislation that comes out of Washington today, I doubt that Dorgan really cares about the consequences of what he proposes. By attacking the evil oil companies, he makes himself look like the populist who cares about the people.
Unfortunately, unlike the foolish Locrian politicians of Ancient Greece, there is little chance that Dorgan will face any consequences for his immensely foolish proposal.
Linked with Wizbang and Don Surber
