Windfall profits are good.
Well, no they don't. "America's oil companies have earned every penny of their profits," says Alex Epstein.
To characterize any portion of them as an unearned "windfall"--like manna dropped from heaven--is a vicious smear. It is to evade what is truly responsible for their profits this and every quarter: the great value they create and the tremendous thought, effort, and risk-taking that goes into creating it.So it is. 'But the oil companies are making huge profits,' you say? Good. They have earned them.
Virtually forgotten in the condemnation of oil profits is that the great--and growing--global demand for oil reflects its great value. Producers and consumers have been willing to pay $70 a barrel for oil because it is worth that much to us. Oil is used by us to get quickly from point A to point B by car, train, or jet. It is used by efficient factories overseas to produce the ever-cheaper goods we get at Wal-Mart. In the event of a natural disaster, it allows us to drive to a safer place or to generate power to begin a recovery.
The critics of oil profits take all the benefits of free-flowing oil for granted--with not a word of acknowledgement to those who sell it to them at agreeable prices. They treat oil production as an effortless, risk-less task that requires little more of oil executives than shuffling paper and watching their coffers fill up with mega-profits.But the continuous mass-production of oil, under all economic conditions, is a tremendous achievement.
Linked Article: The 'Windfall Profits' Smear
Related topics: Economics, Politics-US, Politics