Hubris – legislators try to write the laws in such detail that they will  preclude every possible counteraction, loophole and eventuality, forever.  Thus they write dense, complex bills hundreds of pages long, most of whose provisions require dozens or hundreds of pages of regulation to put them into effect.  The time involved in rulemakings, and the complexity of the final rules  becomes a problem for the legislators, regulators and the regulated parties.

Lobbying: – Parliament is where lobbying originated, according to the lore, but the magazine is not talking about lobbying per se.  Rather the issue is legislators’ micromanagment, which encourages insertion of special provisions into the voluminous and growing bill, often on the request of a special interest or a friend who sees a particular problem to be addressed.  Theoretically, the House of Representative rules require all provisions to be relevant to the purpose of the bill, but the Senate has no such rule.  The authors point out that Dodd-Frank  provisions cover ”conflict minerals,” which the magazine says, ”were a disturbing issue [but were] not one of the causes of the global financial crisis.”

The February 25 issue continued discussion of Dodd-Frank as the latest example of unwieldy lawmaking.  It, probably unknowingly,  also exposed the fact that at least some lobbying was illegal.  The story said that, “Activists rejoiced when they got a provision requiring firms to publish payments per project included in the ragbag Dodd-Frank corporate-reform act in 2010.  ‘We thought we had blown up the Death Star,’ says Ian Gary of Oxfam America, a charity.“   (emphasis mine)

What’s wrong with this picture?  First, Dodd-Frank was not actually a corporate-reform bill; it was aimed more narrowly, at banking system reform.  Second, like “conflict minerals,” the issue of “transparency” had nothing to do with the global financial crisis (but benefited by the Senate’s lack of rules on relevancy).  Third, the story and the quote  show that Oxfam America (a driving force behind the public campaign for energy company “project transparency”), does not live by the rules it wants to impose.  Oxfam America covertly and without transparency, lobbied Senators or Senate staffers into tucking an irrelevant, non-bank reform provision into the 848 pages of the Dodd-Frank bill, and to do that without notice or debate.  Since  almost no legislator reads these gigantic bills, the provision was undetected through passage and enactment.

Congratulations to Oxfam America, you may say.  But (fourth) US law bars charitable, non-profit organizations (501-C-3s in the legal parlance) such as Oxfam America from lobbying.  So it acted illegally.  And (fifth) it continues to do so by directly and indirectly soliciting members of both Houses of Congress to push the Securities and Exchange Commission to hurry and publish its final rules to meet the “transparency requirements” of Dodd-Frank.  Oxfam says that transparency is now “required by law.”  Golly.

Personal opinion on “conflict minerals” or “transparency” aside, Oxfam America does not act transparently, nor are they acting legally.  That activity should put their tax-exempt status at risk.   Most people familiar with Capitol Hill activity know that 501-C-3 employees are frequent visitors in offices or at lunch with House and Senate staffers or the Members themselves.  Company employees who do that work are lobbyists.  Perhaps it’s time that 501-C-3 Board  Members and officials, or people who donate to them, should tell them to be more transparent and abide by the law.  Just an idea.

The Washington reaction to The Economist articles was perfect.  Both authors wrote and claimed that it had helped keep things from going from bad to worse, and that it was actually making things better already.  Various Treasury and regulatory agency writers added their opinions.  According to them, we’re better off because of them.  That’s your government in action.

The first discussed the President’s energy priorities as reflected in his budget submittal to Congress. Go to: http://www.redstate.com/jackrafuse/2012/03/20.a-look-at-obamas/budget/priorities.

The second dealt with the President’s crusade to convince Americans that the oil and gas industry is “subsidized” and doesn’t contribute “their fair share” of taxes or economic impetus, such as jobs. That was published in The American Spectator: http://spectator.org/archives/2012/02/20/architects-of-economic-ruin.

As headlines across the country noted, the $3.8 trillion budget would “delay” debt reduction, continue annual deficits at about $1 trillion per year,  and include a new $350 billion “stimulus” package.  Though he had told Congress in September that (future) budgets would hold annual deficits under $600 billion per year and raise foreign-held U.S. debt to $17.7 Trillion (73% of GDP) by 2021, the new budget shows “out year” figures higher than $600 billion deficits in 9 of 10 years, and foreign-held U.S. debt at $18.7 Trillion — a full $1 Trillion higher, at 76.5% of total U.S. economy.

The President has also been consistent on energy policy since he was a candidate and in his State of the Union address, when he promised  an “all of the above” energy policy:  he called for elimination of tax incentives worth about $4 billion per year for some U.S. oil companies.  Those few companies would be damaged competitively, as the only ones targeted for reduced incentives that would double-tax them (on overseas earnings), eliminate the 2% manufacturers tax credit (that would continue for every other U.S.manufacturer), and end (for the largest U.S. oil companies only) tax treatment on drilling and related costs).   Russian, Venezuelan and Chinese National Oil Companies (among others) are gleeful at the prospect of weakened American companies.

Of course, the budget would spend millions more to increase energy efficiency in buildings, $310 million to make solar cost-competitive by the end of the decade, and $95 million to help develop offshore wind technologies.  Those desires are consistent and repetitive as can be.

White House Chief of Staff (and former OMB Director) Jacob Lew oversaw this budget; he defended it on every Sunday talk show, forgetting Obama’s pledge as a candidate to halve the annual deficit by the end of his first term.

Once again, the President has decided to ignore all the discussion and need for budget cuts and smaller deficits.  He continues to throw money at “green” energy schemes and companies in hopes that they will provide manufacturing jobs by the million, and will turn the U.S. economy around before the November elections.  He promised those things as a candidate and he remains consistent on his energy policy goals, tax subsidies to favorites, and the intent to damage the competitive U.S. oil and gas industry — the engine that drives the American economy.

Emerson and Einstein knew what they were talking about.

“America can continue to lead the world in innovation and development, and under the right policies it will. We can’t afford to limit ourselves by allowing the government to favor certain industries; government has never been good at picking winners and losers. The U.S. business environment should encourage growth to lure business back to the U.S. Such a policy would simultaneously bolster our energy independence. Those things can only happen if, rather than target the oil and gas industry, the president would realize how vital it is to all our dreams for America.”

Please click here to read the rest of my commentary.

Continue to mislead the American people by calling law-based tax treatments “subsidies” to U.S.-based integrated oil companies (though every company is protected against double taxation on overseas earnings, and every manufacturer has the right to the  manufacturers’ tax credit).

Continue to misuse “subsidy” to justify unrelenting efforts to impose new taxes on the largest U.S.-based oil and gas companies (and render them less competitive vis a vis foreign-based national oil companies expanding efforts and investments seek new energy supplies in U.S., Cuban and South American waters).

Continue huge subsidies, grants, interest-free loans and hand-outs to “green” energy companies that claim ”near-economic” technologies to transform America’s energy-based economy  (ignoring the decades such change will take, and the list and scale of recent failures, misappropriations, shady contracts and misdealings that continue to waste taxpayer money).

Promise tax breaks to U.S. manufacturers who build  facilities in this country (while seeking to eliminate that tax credit for U.S. oil companies’ refinery facilities here).

Promise to double the new manufacturers tax credit for “high-tech” companies (although a definition of “high-tech” will lead to countless law suits — and although the oil industry is one the most high-tech on earth, it remains threatened by tax credit removal).

Continue to delay a pipeline that would open new Canadian oil supplies to U.S. refineries and customers and would create at least 17,000 new U.S. jobs during the two- to three-year construction period (all to pander to environmental groups whose im is to prevent Canada from developing its huge resources in Alberta.  The pipeline critics hope to stop development of the resource; they  ignore the fact that the Chinese National Oil Company has bought 30% of one development project and has set aside $12 Billion to pipe Canadian oil to Pacific ports for new Chinese ships to move to China).

Announce with a flourish that he will “open” the Gulf of Mexico to new exploration and development leases, but never mention the fact that his action delayed those lease sales by 2 years or more.

And slow domestic exploration and development of astounding new resources of oil and natural gas, now that the oil companies have developed the technology to provide for U.S. needs for decades into the future.

So that’s it.  The President’s real understanding and goal when he speaks of “an all of the above energy policy.”

Kucinich says the revenues would fund tax credits for the purchase of fuel-efficient cars and a grant program for mass transit riders when oil and gas prices are “unreasonable.”

So, as I say, “Thank God for Dennis Kucinich.  Think about this:

As documented over and over by government and others, oil-and-gas industry profits typically run below (often far below) the profit rates of many other industries;

So if other-industry profit levels set the Board’s baseline, what would this bill do?

It would provide jobs for Presidential friends who have no pension fund, no 401(k), no IRA, no personal investments, no mutual funds, and no hope for retirement — ever.

So, thank God for Dennis Kucinich.

For years, many of us argued that the $0.45 per gallon tax credit for adding ethanol to gasoline was stupid, since federal law required oil companies to blend at least 10% ethanol into each gallon of gasoline they sold.  Oil companies agreed; a combination of a mandate and a tax incentive made no sense.

We also argued that the $0.54 per gallon tariff on imported ethanol should be abolished.  It almost was, at the end of 2010, but at the last moment Congress extended both tariff and tax credit (continuing a cost of $6 Billion per year on Americans who drive cars or who use sugar and sweeteners — all of us.)

But this year Congress let the tariff and the tax credit expire.  The mandate for ethanol content in gasoline goes on; in fact Congress raised the mandated ethanol percentages and volumes from 10 billion gallons several years ago, to 14 billion now, and 36 billion by 2022.  Shame on them.

But now we can say, “Congress finally did one thing right.”  And no one who signed the “No new taxes” pledge can call for reimposition of the blenders’ credit or the import tariff, since reimposition is different from continuation.  Reimposition would add $6Billion per year in new taxes to on Americans!

Maybe 2012 will be a better year.  Let’s hope so.  Happy New Year.

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