Posted on 05/08/2006 5:36:03 AM PDT by governsleastgovernsbest
by Mark Finkelstein
May 8, 2006
The worst possible 'solution' to the high cost of gasoline would be price controls, since they would simultaneously drive down production and drive up demand. But running a close second and third in the bad-idea sweepstakes would be a windfall-profits tax on oil companies and a cap on the amount oil companies can pay their executives. Two out of three ain't bad, so let's give GMA's Charlie Gibson an A- in his attempt to demagogue the gas-price issue this morning.
His guest was the soft-spoken James Mulva, Chairman and CEO of ConocoPhillips, the nation's third-largest oil company.
Gibson opening shot was to suggest that "consumers have a right to be angry" in light of the estimated $135 billion the six largest oil companies are expected to make in 2006. Gibson didn't attempt to suggest why high profits justify consumer anger. Remember, market economics dictate that sellers price their products at the level yielding the highest profits, not necessarily at the highest possible price. Consider Wal-Mart, for example, which has reaped huge profits by consistently offering prices lower than those of competitors.
Mulva sensibly explained that the high prices and profits and largely due to crude in the $70-75 range and refining capacity issues. Gibson wouldn't be placated, citing the factoid that the $135 billion in profits is larger than the GDP of Israel and suggesting that the public says "isn't that an obscene amount?" Hey, I'm sure the oil companies would be willing to purchase Israel, but there's no oil there.
GMA employed the same device used by the Today show in its recent interview of Exxon-Mobil CEO Rex Tillerson, collecting viewer questions to put to the respective guests. Of course, since GMA and Today get to choose which viewer questions to pose to guests, the exercise is little more than convenient cover for putting the MSM's own opinions in the mouths of others.
In this case, Gibson passed along one of those viewer questions regarding oil industry profits: "at some point isn't enough, enough?"
Gibson scoffed at Mulva's point that while his company had made $3.3 billion in the first quarter, it had actually reinvested $4.6 billion into adding to production and capacity of our refineries. "Isn't that a cost of doing business?", sniffed Gibson. But then, immediately shifting into Catch-22 mode, Gibson immediately followed that by criticizing big oil for reinvesting only $71 billion on capital investments last year, but spending $74 billion on dividends and stock buy-backs.
"Sounds to me like you have a greater responsibility to shareholders, than to consumers to reinvest." I wish Mulva had told the truth - that a corporation's only real responsibility, other than obeying the law, is to shareholders. Consumers and others benefit through the operation of Adam Smith's 'invisible hand,' the enlightened self-interest that drives corporations to provide products people want at prices they're willing to pay. Mulva didn't really challenge Gibson's depiction of corporations as akin to social service agencies.
Gibson continued to use the pretext of viewer questions to express what surely lurks in MSM hearts: "One of those people that [GMA talked to] in the public said 'is there any sacrifice that Big Oil can make?' The public looks at this and 'says what's unreasonable about a windfall profits tax right now?'"
Mulva: "We've tried that, countries have tried it. It doesn't work. You put in price controls it holds down the price but increases consumption which is not good. Windfall profits tax takes away from the ability of the companies to reinvest, to grow and add to capacity."
Now on his populist roll, Gibson continued: "One of the things that the public gets upset about is as you know, CEO compensation. We just had the CEO of Exxon-Mobil retire and he had a $400 million package. Your compensation is $13 million a year with extraordinary amounts of stock options that can eventually be exercised. When the public talks about sacrifice yes, it might be a token sacrifice, but should there be a cap on those kinds of compensations?"
Answered Mulva: "With respect to CEO compensation obviously these are very, very large numbers but on the other hand, if you look at the oil companies, the international oil companies there are huge responsibilities with respect to asset bases and hundreds of billions of dollars. We have tens of thousands of employees so there is a great deal of responsibilities."
A better answer might have been that if there are going to be solutions to the energy challenges we face, it is going to take the best and the brightest executives to find them. If you cap oil industry compensation, the ablest execs will take their skills to other industries where they can earn what the market says they are worth.
In any case, Gibson didn't explain why $13 million is too much for the head of a company responsible for tens of thousands of employees and hundreds of billions in assets, but $7 million is apparently just fine for a guy with no responsibilities other than to sit in a comfy New York studio doling out MSM conventional wisdom.
"The whole talking head business should be outsourced. Why pay an airhead like Katie 17 million when you could get some educated Indian lady for 50 grand a year?"
Oh gosh, wouldn't that be funny, some Indian lady with bad pronunciation trying to read the news. And we could only understand about every third word.
The tax will just be passed on to consumers. It's a stupid idea. Find evidence of collusion, or shut up and let us build a damned refinery.
Assuming, of course, that there was any to be had at the pumps.
Charlie also ignored my question about the windfall profits of local, state and federal government: double the profits of oil companies with none of the overhead.
And how could a smart guy like Gibson not know that historically, price controls don't work? (Answer: because he doesn't care. He's too busy portraying himself as Great Protector of the Publik).
I hadn't watched GMA in a long time. Their level of political correctness is even more sickening than Today's. Concerning the Bonds home run chase, they just couldn't help themselves. "Someone should point out that it's Hank Aaron that owns the record, not Ruth." Uh, yeah, Robin, but it's Ruth's mark that Barry's approaching right now, not Aaron's. The message seemed to be, "All you stupid racist little peons out there are focusing on the wrong guy, but don't worry, we the intelligent and enlightened ones will straighten you out."
GLGB,
Never forget that Gibson is related via marriage of offspring to a Clintonista (I forget which one). IIRC, the "Toon" himself attended some of the wedding festivities.
Didn't know that - thanks for passing along.
So right. We'd be less of a spectator nation as well without them. We'd be making our own music once again at home.
It's better than I remember, his daughter actually worked for Billy Blythe and married Robert Rosen.
"Charlie Gibson’s daughter, Jessica, worked as a special assistant to the Director for Legislative Affairs in the Clinton White House at the very same time that her father was covering Clinton policies as co-host Good Morning America, a program which broadcast live from the White House one morning during her tenure.
But no one knew about the connection, at least I never heard anything about it, until Jessica Gibson’s career highlights made the weddings page of Sunday’s New York Times, a revelation highlighted on Wednesday by Rush Limbaugh after Charles Gibson mentioned it on GMA.
The item about “Jessica Gibson and Robert Rosen” appeared on page 9 of the August 18 New York Times “Sunday Styles” section (with a photo of the couple). It noted that “Jessica Law Gibson, a daughter of Arlene J. Gibson and Charles D. Gibson of New York, was married yesterday at her parents' vacation home in Park City, Utah, to Robert Alexander Rosen, the son of Andrea and Michael I. Rosen, also of New York. Virginia Hill Worden, a Universal Life minister, performed a nondenominational ceremony.”
Charles Gibson
ABC showed Charles Gibson at his daughter's wedding. Jessica Gibson worked for Bill Clinton while her father co-hosted Good Morning America
The item confirmed that “her father is a host of Good Morning America and Prime Time on ABC. Her mother is the head of the Spence School, the private girls' school in New York.”
The Times announcement recounted how the couple met while both were part of the Clinton presidential team: “The bride and bridegroom met in March 1999 in Guatemala, where they were working on an advance mission for a visit by President Bill Clinton. Ms. Gibson was then a special assistant to the director for legislative affairs at the White House, and Mr. Rosen was the director of the office of advance and a special assistant to the President.”
http://www.mediaresearch.org/cyberalerts/2002/cyb20020822.asp
Tangled webs - gotta love it!
On the one hand, I don't see it, technically, as a conflict of interest. Gibon's GMA job shouldn't bar his daughter from taking a political job, and vice versa. Even so, I think it strongly suggests that he had reasons, above and beyond his intrinsic liberal leanings. to look kindly on the Clinton administration.
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