I'm Moving to Guatemala

Not that this is news to anyone who, uh, actually reads the news, but the two men running for President of the U.S. are, how to put this gingerly, economically retarded.

Karl Rove did a piece in the WSJ yesterday, calling out these two pandering politicos on their blatant b.s., the most painful example of which may be the idea of taxing "windfall" profits (of course, avoiding any discussion of what, exactly, constitutes said "windfall".  Not to go off on a rant here, but wtf is up with the wind references, "windfall", "headwinds", etc?) 

Rove accurately points out that margins for the current corporate pariah du jour, oil/energy companies such as Exxon Mobil, are amongst the slimmest in any industry.  So, if these populism-promoting politicians aren't defining windfall profits by margins, they must mean by sheer size, right? 

Wrong. 

It's not the profit margin, but the total number of dollars earned that is the problem, Mr. Obama might say. But if that were the case, why isn't he targeting other industries? Oil and gas companies made $86.5 billion in profits last year. At the same time, the financial services industry took in $498.5 billion in profits, the retail industry walked away with $137.5 billion, and information technology companies made off with $103.4 billion. What kind of special outrage does Mr. Obama have for these companies?

It's one thing when the most liberal senator on Capitol Hill blabbers incoherently about things which he clearly does not understand (as a matter of fact, its pretty much par for the course, no?), but when a so-called "Regan Republican" like John MCcain allows himself to sound similar ignorant, its a sign that we're all in serious trouble.

This past Thursday, Mr. McCain came close to advocating a form of industrial policy, saying, "I'm very angry, frankly, at the oil companies not only because of the obscene profits they've made, but their failure to invest in alternate energy."

So yea, about the title of this post.  I'm not kidding.  When the next leaders of the free world (ha!) not only say stupid things, but I fear, will actually follow their rhetoric with action, bad things will happen.  Very bad things.

Comments

[1-2]

I love you Anal...wish i had seen this first.

[Lee D]

Out of curiosity, what's the tax situation in Guatemala? I imagine the *cough* amenities are comparable to Costa Rica, but are they friendlier to Gringo money and property ownership?

[Anal_yst]

@ Lee

$100 (or better 100E or 100L) in Guatemala will surely get you anything your little heart may desire, except the inevitable medical attention from satiating said desires, of course...

[Fake David Swensen]

Look my friend this is pandering and all but Mr. Rove is a very poor spokesperson for truth in politics. The man has made a career of trafficking in homophobia, bigotry, and intolerance for political gain. Further, the man wouldn't know a dead weight loss from a low carb diet, of the same name. These people are politicians their goal is to get elected. When oil prices are high the populace gets a daily reminder that their life style as know it is being altered. It has been shown that people perceive small frequent costs as much more painful than one large cost. Even though we're only talking about a few extra thousand dollars a year. If you live pay check to pay check, as most Americans do, you will have to change the way you live your life. Which is fine. That's how economics works. But anytime their is someone enduring pain another man will offer to vanquish that pain at the cost of only one vote, that is how politics works. This is just empty rhetoric, my friend, Obama doesn't give a shit about Exxon Mobil's profits. I never understood, why my fiscally conservative republican friends care about such empty talk. It's like when Obama said he was going to eliminate NAFTA.... hello, he's lying! This is how you get elected, promise people shit you have no intention of giving them and make a half hearted effort to get it passed in congress, so when it fails you can blame the other party. I just don't understand how you can not realize this is just BS.

[Anal_yst]

@fds

I'm well aware of the points you've raised (you'd have to be pretty much legally retarded not to be, no?), but obamamama scares the beejus out of me, to the point where I fear he will do some seriously stupid shit if - heaven firbid- he gets elected. Obviously that probably won't happen, but given the circumstances, and his pandering, spineless tendencies, I'm more afraid of what he may actually do, moreso than I have been in any election in the past 2 decades. Anyway, I'm @ Foxwods gettin krunk and gambling like I'm ralph cioffi on a bender (too soon?), so while we appreciate the comment, just don't expect a remotely coherent response until monday morning, if not later muwahaha

[Fake David Swensen]

I personally find that a little disheartening. I don't know what about him could possibly scare you. I think he's pretty solid, he could easily be a Partner at Skadden or an MD at Goldman. I often find it is the Reagan Republicans (particularly Reagan himself) who have very little understanding of economics, beyond "taxes bad, corporations good". If you were to ask one of these republicans for another method to ameliorate the effects of externalities besides taxes they would say, "what's an externality". I can understand where your frustration would come from if you thought he actually believes what he is saying. But he's lying, like way totally lying. Like when John McCain says how much he loved Jerry Faldwell, lying, pandering to the base cause that what you gotta do, lying.

[Anal_yst]

@ FDS

While I'm still not 100% recovered from this weekend, I (think I am) far enough along to finally respond.

1. I'm scared as hell of McCain as well; both he & Obamamama have proven their complete ignorance of all-things Economic, seemingly at every chance they get.

2. I'm approaching this election with the mindset (as always, argh) of not who is the best candidate, but which is the lesser evil. Given that both will undoubtedly suck on many fronts, I'm concerned about Obama stealing my hard-earned $ to give it to lazy schmucks who didn't do piss to deserve it. McCain may be a crazy old coot, but at least he won't subsidize the welfare state like Obama.

3. Of course they both lie with impunity! Thats their job, to lie, but make it a little believable to Joe & Jane Voter. I should have annunciated this more clearly, but I'm concerned that by running on a populist platform, Obamama is enabling, nay, instigating the populace into believing that Corporations and "Wall Street Investors/Speculators" are responsible for all of their ills. In doing so, he is setting a dangerous precedent, and the further he slides down that slippery slope (and the other Democraps in congress are guilty of this as well, if not moreso than Obama), the harder it is going to be to change those attitudes and opinions, however misinformed they may be.

[Fake David Swensen]

Well corporations are responsible for most of people's ills Analyst. The thing most people don't appreciate is that corporations are also responsible for most of people's pleasures as well. I always laugh when people talk about "greedy corporations" because, of course, most of those people work for corporations themselves. And of course even the government and not for profit employees have their saving in the market and benefit from the greed they decry. That said people are going to blame corporations for things, its just the nature of our society, they don't have anyone else to blame, when the electricity goes out, or when oil prices are high, or when their favorite restaurant gets replaced with an Applebees so they blame Applebees.

I don't buy into whole "i work hard and deserve my money" deal though. i mean you know we all like to think what we accomplish is the product of our own hard work, but to a large extent its the product of the society to which we belong. I'm not saying a command economy is ideal by any means, but I think a little social engineering actually does this nation quite well. As we all know analyst, its relative income people care about, so I don't know why you really care if taxes go up as long as everyone else has to pay the same tax increase and your social status is therefore unaffected. Especially if those taxes are invested in way the free market cannot accomplish (due to free rider or other issues) thereby increasing productivity for society as a whole (think interstate system, or army).

I guess in the end though I care much more about social justice than I don't about 4% one way or the other on them marginal tax rate. I don't really see how you people care about such things, but whatever, to each his own.

[Anal_yst]

Ahhh FDS, so true, so true, I only wish our silly congresspeople/senators would make that connection (i.e. those same evil corporations that make sooo much money are the ones who pay alot of that money to its employees and shareholders, who are de facto the same people who elect those same politicians, sigh.....

Ok, that theoretical bullshit about "people only caring about relative income" is definitely not applicable in my reality. I'll give you maybe that the 'unwashed masses' only care about relative (or whatever) and not about the absolute amount, but when i take home X dollars, and a year later i take home .9X dollars so the government can spend it on some (most likely) stupid stuff we would have been perfectly fine without, that bothers me, if for no other reason than the principle behind it.

I gotta stop before I get off on a rant here, cus the 1st version of this comment went on around 1000 words before I realized it was borderline-incoherent.

[Fake David Swensen]

No way anal, finance professionals think far more in terms of relatives dollars than more than the average Joe. The average joe has very defined expenses, mortgage, gasoline, food, clothes what have you. And a very predictable future income. He makes 50k a year and has 51k in expenses. For him an extra $100 a month is a new plasma screen on 0% financing at wal-mart, where $1,200 a year more in taxes, means disconnecting the cable or switching to store brand coco puffs. his lot in life is basically fixed, in absolute and relative terms.

You on the other hand my friend, simply want more money because it makes you feel that you are more accomplished than your peer group. You work in banking and your friend works at a HF and makes 3x what you make. You feel like shit. So you get a job at a hedge fund, but your buddy the oil trader pulled in 1 mil last year and he graduated a year after you! You're a single guy, no family, not excessive overhead, young, you have the ability to purchase all that satiates you. Your desire is not more material goods or greater means, but for the status they convey. and for that reason if you are making 300k and suddenly have to pay an extra 30k in taxes you shouldn't give a fuck as long as that oil trading bastard has to pay an extra 100k. Sure you'll be able to afford a few let shirts from Thomas Pink, but so will everyone else on the street, so net net nothing will have changed. While you all have less, your status within the pecking order remains, and for this reason you should be relatively indifferent to marginal increases taxes.

[Anal_yst]

@ FDS

Those are all solid points, but - and I know you find this hard to believe - I'm not as vain (ok thats debatable) - as the name would suggest.

This isn't leveragedsellout my friend (although we're obviously readers), don't be so quick to judge...

[Fake David Swensen]

Oh i didn't mean any of that in a negative way. Advancing ones social position is the only reason to put up with the shit you have to go through working in finance. I wasn't implying that you were some how soulless. Even if you care nothing about money, in a society where people with money receive greater respect and opportunity, it would be completely rational for you to behave as described above. As Sandy Wiel once said, the money is just a means of keeping score.

[Beau]

When you draw a difference between Oil and another market and contrast the profit amounts of each you fail to mention that A:The entire economy of many major nations can be brought simultaneously to their knees with an unstable oil market. Try that with pork bellies. B:fuck you.

McCain is voicing his personal opinion about OPEC to draw like minded voters. Maybe withhim and a liberal congress we can do something about corporatism and imperialism. Your brand of free market is just a higher wall between classes.

[reverse cell phone lookup]

Not to mention (and someone correct me if I'm wrong),