Ben Stein gives us another installment of his usual sloppy thinking. In his latest offering, “Exxon Mobil Needs a Hug,” he declares:
After all, Big Oil is big us. And we need us.
Since I don’t consider myself Big Oil, and I imagine most readers would object to being considered to be Big Oil, all Ben can say with certainty is that he is Big Oil. Presuming, of course, that that statement even means anything remotely comprehensible.
Since thinking overly hard about Ben Stein inevitably leads to brain rot, I will limit myself to a few observations.
It’s a sign of Stein’s utter lack of sense, or eagerness to show what a clever defender of the Republican faith he is, to stand up for Exxon Mobil. He waves the flag for the oil company because Obama singled it out in a speech, noting that it had earned $12 billion in the last quarter and wouldn’t part with its profits easily.
Of course, Stein must have forgotten that Exxon Mobil had been actively funding attacks (via think tanks) on the Intergovernmental Panel on Climate Change’s reports, offering scientists $10,000 to say bad things about the work. Given this history, Stein risks being mistaken for another Exxon shill for hire.
The Obama attack was a cheap shot, but it isn’t hard to depict Exxon Mobil as a bad guy. The company is still contesting $2.5 billion of punitive damages assessed for its 1989 Valdez oil spill. The reason for the punitive charge is that the ship’s captain, Joseph Hazelwood, was known by Exxon to be a relapsed alcoholic, yet they continued to let him operate the supertanker. His drunkenness led to the crash. Note that the $2.5 billion they are disputing is a mere 2 1/2 weeks of earnings, hardly big enough to serve the intended deterrent effect.
Now the vague Obama warning about profits may have to do with reviving ideas bandied about in the 1970s oil crisis, such as levying an excess profits tax on oil producers. That never came to pass, partly due to difficulties in determining how to set the tax level fairly, partly because the oil companies could easily game it (just spend more and depress your profits). Unfortunately, the excess profits tax debate kept more sensible proposals for ending oil company tax breaks, like depletion allowances, foreign tax writeoffs, and special benefits for intangible drilling costs, from seeing the light of day.
So what is Stein’s defense of a company that is clearly big and aggressive enough to take care of itself? That “we” are all shareholders, so any attack on Exxon Mobil is an attack on all of us.
This is so dopey as to not be worth discussing, but I will nevertheless belabor the obvious. Not everyone in America owns stocks, either directly or derivatively (only 41% of Americans say they or their spouse has a pension) and of those who do, not all of them own Exxon Mobil (none of the portfolios I am responsible for do, either directly or via indexes).
No, Stein isn’t willing to consider that high profits by Exxon Mobil in an essential product like oil represent a transfer from the have-nots to the haves.
That may strike some readers as a socialistic formulation, and indeed, there is no clear standard for what a fair profit is. But this expansion (2001 onward) has been characterized by an unprecedented proportion of GDP growth going to corporate earnings as opposed to workers. Indeed, this is the first time the profit share has exceeded the labor share. So the Exxon Mobil example merely illustrates a broader issue.
Cut Stein’s argument to its core, and it’s blatant free market run rampant: we shouldn’t interfere with the God-given right of any company to earn a profit because it will hurt the investors. But Stein goes further and claims that the interests of investors are identical with those of the US public. Was he asleep when they talked about class warfare in school?
In fact, a September 2007 Pew Research Center study found that the US population increasingly sees itself divided along class lines. There was an even split among respondents as to whether they agreed or disagreed with the notion that the country was split along economic lines, while in 1988, 71% rejected it. Similarly, only 45% today consider themselves to be among the “haves.”
Now there are plenty of arguments Stein could have made against Obama’s jab at Exxon, particularly since the candidate was discussing the need for changes in US energy policy. High oil prices do encourage conservation, which is the most effective short-term move we can take to reduce energy consumption. Thus, any move to lower oil company profits, if it was used to relieve oil prices directly, would be highly counterproductive (not that that’s where Obama was going, but just about any line of thought would be an improvement on the argument Stein made).
But no, to take on Obama, Stein would have had to dig a bit to find out what the senator’s stand on big oil and energy generally is. That would be work. It’s much easier to resort to Republican default rhetoric.