- Snopes: Obama Lends $2 Billion to Brazilian Oil Company
Heard the one about how the President Obama is spending billions on offshore drilling…in Brazil? Snopes rates it “mostly false.” This is another case of conservatives getting riled up about something that's not true and dates from President Bush's time in the White House. - ThinkProgress: Exxon Makes $30.5 Billion, So GOP Votes Unanimously To Give Them Tax Breaks
All the Republicans and 7 Democrats in the House voted to block a bill that would cut $1.8B in annual subsidies to the oil industry. Republicans voted unanimously to keep them in March, too. Remember, kids: welfare is bad, unless it's going to the world's most profitable industry. - NASA: Results of Epic Space-Time Experiment
I love theoretical physics. Albert Einstein came up with all of these ideas about how space and time should work, based solely on doing math on paper, and as science catches up with him, we keep finding that he's right. In this case, Einstein forecast that mass should curve spacetime. For instance, the mass of Earth should cause the very fabric of the universe to twist and warp around it. By launching some gyroscopes into space seven years ago—containing the most perfect spheres ever made—and observing how their spin drifts, it was observed that Einstein's calculations were spot-on. NASA's work on the project began 47 years ago, culminating in this magnificent confirmation of how the universe works.
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Hey, it’s a double-link day. (Really, Postalicious? You couldn’t wait another hour? Perhaps some part of “Keep at least 24 hours between posts” is unclear?)
Sometimes I wonder who writes for Snopes, and how their writers are vetted. That piece read like it came out of the white house press office.
The WSJ said, “Americans are right to wonder why Mr. Obama is underwriting in Brazil what he won’t allow at home.” That seems to me the main takeaway.
Let’s not forget that this loan was OKd by a board appointed entirely by President Bush, before Obama could appoint his own, since the process—which began under Bush—was completed in April 2009.
Not incidentally, Forbes agrees with Snopes, with author Kenneth Rapoza even smacking down the WSJ for their editorial, writing:
(Rapoza covered Brazil for the WSJ for five years, until March of last year.)
Everything on Snopes is written by Barbara and David Mikkelson, the couple who own the site. As a rule of thumb, when you find yourself disagreeing with Snopes, it’s time to reassess your own thinking. :)
IP: I guess you missed the part where it was a LOAN.
I won’t ding the Bush bank appointees for making this decision because what most people don’t know is that 1) Petrobas leads the world in their ability to do deep drilling. They are the best. And, 2) the estimated deep water oil reserves in this play represent a huge source of oil in our back yard. And it will be for sale because unlike the USA, Brazil has made a big switch to ethanol. Brazil loves their north American neighbors, but they are happy to take the Chinese money. We need to be a bigger player in the Caribbean basin. Since Monroe, these have been our people. We need to act like we mean it.
“As a rule of thumb, when you find yourself disagreeing with Snopes, it’s time to reassess your own thinking.”
Really? Because some dude and his wife put something on their site, it’s instantly gospel? Wow.
I don’t think you appreciate the sort of scrutiny that Snopes comes under. These are two people who have made a career of being the country’s flawless arbiters of what is real and what is a hoax. They have done so perfectly for something like a decade now, becoming a primary source for all things hoax-y.
“Some dude and his wife” is a term that could describe anybody, from the president to…well, not the pope. He’s just “some dude,” without the benefit of a wife. Guinness is “some beer company,” and they are the arbiters of world records. Because, really, there’s no masters degree in “world records,” any more than there’s one in “figuring out what’s real and what’s a hoax.”
Thanks for posting the NASA story. That experiment rocks. Big tip of the hat to all the folks who took part in that over the life of the project. It’s just an amazing story.
The world’s most profitable industry is finance (can it get better than gambling other people’s money?). In terms of profit margins, the majors aren’t spectacular. That aside, what tax breaks are we talking about removing? If we are talking about credits and tax treatments that every company gets, it seems unfair to single out Oil & Gas.
Also, it is not as if the oil companies don’t pay a lot of taxes now. As is state laws vary so much that they alone can end up taxing more than 100% of revenue. For companies like Exxon, they have nexus in every state. They pay royalties on the revenues from the production activities. And they serve as very large unpaid tax collectors. So, what is deserving of wrath?
It has been, but it’s not right now. Pharma also used to be right up there, although I recall it was a few years ago that they were surpassed by oil.
The Center for American Progress provides a rundown of the subsidies that are under debate. I have no problem with tax breaks for small businesses doing expensive, innovative work on solving energy problems. That’s swell. But I do have a problem with providing tax breaks to enormous multi-national companies that are some of the world’s most profitable corporations. They clearly have no need to be the benefit of public largesse, since they’re doing just fine. Hell, we can even keep those breaks, but we should limit them to oil companies who actually need them.
Well, I ran a stock screen just to check what I was saying. And when I run by sector highest quintile of profit margin, the number of companies in the Financial sector beat out all other sectors by a multiple of at least three. When I do it for highest quintile of EBITD, Financials still beat others out by a multiple of at least two. In either of those screens, none of the oil majors show up. Apache, Diamond Offshore Drilling, Anadarko and other very profitable domestic producers (yet not international, integrated oil companies) do. But the subject of the Senate bill anyway is just Exxon, Chevron, Conoco, Shell and BP. How would you define most profitable and doing fine? The latter would suggest a great deal of corporate tax payers.
The rundown is a little skewed I think. They make it sound like everyone else uses a straight line method for tax purposes. And that is not true. Everyone gets accelerated depreciation. And a lot of folks were able to take advantage of bonus depreciation. Hardly anyone is expensing a lot for tax purposes past the early years of an investment’s useful life.
If we want to get rid of depletion and the treatment of certain exploration and development costs, we should do it for all Oil & Gas companies. If we want to get rid of LIFO and the Domestic Manufacturing Deduction, we should eliminate those all together, not just for a select group of tax payers. The intent here seems to be to just punish a handful of taxpayers because they just filed 10-Qs with the SEC. I don’t see how this makes for good public policy. And certainly if they wanted the tax code to follow US GAAP for reporting income (the same basis as reported earnings in 10-Q and 10-K filings), they could do that. But pigs would sooner sprout wings.
I certainly understand the politics. Gas prices up = time to bash oil companies. And not just any oil company, just the handful of international, integrated, oil companies. Never mind that the big banks are bigger players in the commodity futures market because they allegedly have a risk that needs hedging. Never mind that by far the most exceptional profits are made by state run oil companies. But I understand you can’t get the president of Saudi Aramco to show up to a congressional hearing and you can’t tax them. It’s silly. Though I can’t feel sorry for Republicans getting shamed on their own we-care-about-the deficit-but-not-enough-to-raise-taxes position.
Clearly you’ve got access to more timely information about the economic wellbeing of industries than I do! :) Of course, there’s been a great deal of change in the past few years—no matter how a given industry was doing 3–4 years ago, it might be doing badly today, and vice-versa. Regarding punishing large companies, I think what would clearly be better than targeting individual businesses is simply establishing standards for when it no longer makes sense to provide particular tax breaks. It doesn’t make sense to provide incentives beyond a point where it’s necessary to incentivize. We want to provide tax breaks when they serve as a competitive obstacle, but eventually they’re not necessary, whether because of a lack of better markets in which to do businesses, because the scale of the business renders those breaks quaint, or because we’re subsidizing something that we actually want to discourage, if only relative to other behaviors that we want to encourage.