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Stop Demonizing Oil Profits
Posted By Nicolas Loris On May 19, 2011 @ 7:19 am In Energy and Environment | 11 Comments
Last week, Members of Congress called big oil executives to the stand to defend the high profits their companies are making. Some in Congress are using high oil profits as a reason to propose eliminating what they label “oil subsidies,” despite the fact that what they call subsidies are broadly available tax breaks. You can get a breakdown in this paper: “What’s an Oil Subsidy ?”
President Obama did the same in his weekly address . Even actor Leonardo DiCaprio is getting into the action, recently tweeting , “Big oil is making huge profits & getting billions in US taxpayer subsidies. End #oilsubsidies.”
The irony of course is that DiCaprio, a successful beneficiary of our system of free enterprise, ignores its strengths and virtues by demonizing profit. These attacks are misinformed and off-base. Demonizing profits ignores why profits matter and the ways free enterprise benefits all Americans. It also ignores the fact that oil and natural gas industry earnings, against their sales, are in line  with other manufacturers and are in fact below the manufacturing average.
So while it’s easy for some politicians and outraged denizens of Hollywood to blast high profits for oil companies at a time when families are struggling, the reality is that profits are an integral part of our economy, including the oil industry.
Profits play a critical role in our economy and reward producers for creating value for consumers. In a new video entitled “The Morality of Profit ,” the Atlas Network’s Vice President for International Programs Tom Palmer asks, “Did Bill Gates violate anyone’s rights when he organized Microsoft and brought computer programs to billions of people? No, he offered customers value and free exchange.”
The same is true for oil. Consumers value oil and will move away from it when a better alternative exists. Politicians who demonize profits are missing the nature and the importance of the profit–loss system.
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2011/05/19/stop-demonizing-oil-profits/
URLs in this post:
 What’s an Oil Subsidy: http://www.heritage.org/research/reports/2011/05/whats-an-oil-subsidy
 in his weekly address: http://www.foundry.org/2011/05/16/one-tiny-cheer-for-obama-on-drilling/
 recently tweeting: http://content.usatoday.com/communities/onpolitics/post/2011/05/oil-subsidies-leonardo-dicaprio-/1
 oil and natural gas industry earnings, against their sales, are in line: http://dailycaller.com/2011/04/25/the-truth-about-americas-oil-gas-companies-part-i/
 to the Energy Information Administration: http://www.eia.doe.gov/finance/performanceprofiles/pdf/major.pdf
 The Invisible Heart: http://www.amazon.com/Invisible-Heart-Economic-Romance/dp/0262681358/ref=sr_1_2?ie=UTF8&qid=1305753065&sr=8-2
 According to the American Petroleum Institute: http://blog.energytomorrow.org/2011/04/good-news-for-pensions.html
 The Morality of Profit: http://www.youtube.com/watch?v=SnHQammdwGQ
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