The Gigantic Idiot Just Keeps Talking

Tim Geithner seriously needs to shut his mouth. Every time he opens his trap, the Dow falls 200-300 points. It would probably help matters if he had ANY idea what the heck he was talking about. Here's the latest:

US Treasury secretary attacks oil, gas tax breaks

First, he says oil and gas companies shouldn't get tax breaks because their businesses contribute to global warming. Why is global warming still being touted as fact? Why is dissent to this crazy concept totally ignored? But, for the sake of argument, let's roll with the assumption. Are oil and gas companies the only ones contributing to global warming? How about their contributions of jobs and an enormous amount of taxes to our economy? I guess that doesn't really matter when we're fighting a phantom enemy.

Second, he makes the following statement:

"We don't believe it makes sense to significantly subsidize the production and use of sources of energy (like oil and gas) that are dramatically going to add to our climate change (problem). We don't think that's good economic policy and we think changing those incentives is good for the country," Geithner told the Senate Finance Committee at a hearing on the White House's proposed budget for the 2010 spending year.

Let's examine just how exactly this stance is good for the economy. I've talked about this in a previous post, but we'll take the quiz again. When oil companies are forced to pay higher taxes, who ends up paying for that? WE DO! Everyone who goes to fill up their car with gas, turn on their AC, or even turn on their lights or plug in their refrigerators will have to pay this tax. Not Exxonmobil, not Chevron, not Shell. We do. Does Geithner really not understand this concept? Is fighting "global warming" really more important right now than helping the American people out of this recession?

Finally, we get this unbelievable lack of economic and business logic from our fearless economic leader:

Geithner said the additional taxes "can be absorbed" by the oil and gas companies, given the billions of dollars they have earned from high energy prices.

"The impact of these subsidies are very small relative to revenues produced by U.S. oil and gas producers," he said.

To address this, let me explain this like Oscar explained a surplus to Michael on The Office: assume your mommy gives you $10 to start a lemonade stand. You spend all $10 on lemons, sugar, and cups. With all your supplies, you're able to sell 10 cups of lemonade at $1 per cup. What is your revenue? $10. Now, what is your profit? $0.

See how that works Mr. Geithner? Revenue does not equal profit. But let's not ignore the fact that Exxonmobil keeps setting profit records every quarter. What is the largest profit Exxonmobil has made? Approximately 10%. Why is a 10% profit so exorbitant?

But, that is neither here nor there because Exxonmobil will not be paying this tax. It will not be absorbing anything. This tax, just like every other cost, will be passed on to the consumer. So, yes Tim, you get your extra billions in tax revenue. But it provides no disincentive for oil and gas production and further taxes the consumer into the ground. I don't know where you got your economics degree, but that institution needs to be shut down immediately.