Campaign Promises and Cheap Oil

In her speech to the Democratic National Convention this past summer, Senator-elect Elizabeth Warren exhorted that the system in the United States is “rigged against” ordinary people, citing numerous injustices, one of which being that “Oil companies guzzle down billions in subsidies.” The oil industry has become a frequent target of the democratic party, including President Obama as many find their consistently high earnings reports difficult to reconcile with a lackluster economy.

With a showdown in congress looming over the rounds of tax breaks set to expire alongside spending cuts, lawmakers are looking for places to balance the budget. It is clear that there is little hope of agreeing on anything that could be termed a 'tax increase,' attention has shifted to the oil and gas industry, as Speaker John Boehner has even admitted he 'won't rule out' targeting oil industry tax breaks.

Why do oil and gas companies receive assistance in the tax code?

The United states levies taxes not only to fund the operations of government, but also to help encourage a growing economy by spurring investment and job creation. Each industry receives different treatment by the tax code, depending on the particularities of their product. The oil and gas companies make record profits from a product that is unlike any other. It is the magnitude of their earnings that arouses suspicion over the tax credits, as President Obama elucidated in his campaign speeches, saying that we needed to end subsidies that “oil companies don't need.”

What makes the oil and gas industries unique?

Oil companies such as ExxonMobil and British Petroleum have an uncommonly global reach. Former CEO of ExxonMobil Lee Raymond repeatedly stated during his tenure that the top priority for his company was 'reserve replacement,' meaning that they tried to match every barrel extracted from the ground with discovery of new 'equity reserves,' or proven oil wells. It was a corporate tactic aimed at fighting the criticism of an industry that was so clearly unsustainable. As a result, oil companies have sought reserves in more and more far-flung regions, and have acquired a role in numerous regional conflicts while navigating a path between their corporate interests and regional stability. They seek a uniquely obfuscated product, one that is finite and often difficult to extract. The costs associated with all of these factors could render the companies unable to compete in a global market, as many of the world's oil reserves are under control by state-owned companies. While the credits are aimed at leveling the playing field for the large corporations, critics question if they are a bit too generous.

What are the tax credits?

There are a plethora of subsidies and deductions that benefit the oil industry, the following are a few that have aroused particular interest in the budget debate. Percentage depletion allowance is meant to encourage investment in high-risk, exhaustible commodities, this tax credit allows a 15% deduction based on average daily production (roughly 1,000 barrels of oil.) Given the nature of the oil and gas industries, this deduction is considerably higher than comparable credits in other sectors, and makes a sizable portion of a company's earnings tax free.

The government also funds new tactics in petroleum extraction in research and development funding through the Office of Fossil Energy, while President Obama last year proposed cutting their budget last year by $417.8 million, some conservative groups, such as the Heritage Foundation suggest that he go even further, by leaving only enough money in the budget to maintain the strategic petroleum reserve. Could this potentially be an area of common ground for the two parties?
Finally, the foreign tax credit is available to any company that operates and pays taxes overseas, but it has drawn particular attention because of the amount of savings oil companies can glean from it. The credit is meant to prevent a company that already pays taxes on earnings in other countries from 'double dipping' and paying them again in the United States. The credit keeps companies competitive against many state-owned corporations that pay taxes only in their home country.

How much money would ending them provide?

The real savings are a source of debate, relinquishing all explicit oil tax credits could save the government $21 billion over 10 years. President Obama has pushed for a more moderate elimination of almost $40 million in oil industry tax loopholes over the next ten years. The question is which credits to target, and whether to remove them entirely, or leave them in place with a smaller reach. Some subsidies, such as the foreign tax credit and the percentage depletion allowance are available to companies in different industries; critics of the cuts claim that disallowing large petroleum corporations from claiming them would be a type of fiscal bullying.

Would it affect the price at the pump?

While ending subsidies for the petroleum industry could have enormous implications for the federal budget, this is the question most relevant to ordinary Americans. While gas prices often define the national mood and have a galvanizing effect on presidential approval ratings, they would be equally unaffected by elimination of oil company subsidies as they are by the fiery populist rhetoric surrounding the issue. The fact remains that the issue of pump prices is far more complex than even our arcane petroleum industry tax rules. It is subject to commodity speculation, OPEC and factors far beyond the reach of the United States government such as the fluctuating price of crude. If oil companies took any actions against decreased federal assistance, it would not be to inflate their prices, as it would drive away consumers. They would instead seek other cost-reduction tactics which they have been long familiar with, namely cutting jobs.

My Experience Volunteering

It took a while, I used the usual excuses. You know, the easy ones like "I couldn't find anything," or "It seemed like they didn't need any more people." These are the easiest ways to avoid volunteering, and I used them all. I've spent the past week cleaning out flooded houses and helping affected homeowners return to a version of normal. Only after doing this did I realize how silly my excuses were in the first place.

I spent yesterday out in Far Rockaway, an area previously known to me as a summer beach destination, a working class neighborhood with a beautiful boardwalk. This time, however I didn't see much of the beach.

Americorps/Team Rubicon and New York Cares have established an aggressive, well organized ground team dedicated to helping people in the area. There is a shuttle service from lower Manhattan, and volunteers may either help with food distribution or assisting residents, many of which have lost everything, and are still living without heat, water or power.

My team spent the day at a fisherman's property. His boat had been lifted by the water and wedged into the side of the house, blocking the entrance. His possessions were organized in piles amidst the dirt of the front yard. The storm had destroyed the house, which needed a complete gutting. We spent the day ripping out ceilings, walls and removing appliances. The remains of the man's house were dumped unceremoniously on the side of the road. There has been so much to clean up lately that the sanitation trucks have been operating with plows, instead of picking up bags. He plans to move into the shed adjacent to the house after installing a small space heater and a floor.

Despite all of the physical destruction, the most striking experience of the day was listening to the fisherman speak about the financial troubles facing the community as a whole. The federal and city government have been quick to disperse aid, (provided that the residents have Internet and phone access, which many do not.) The scale of the disaster, however cannot simply be measured in flooded basements and wrecked ceilings. While much of New York has moved on in their lives from Sandy, the residents of Far Rockaway simply cannot. As the fisherman reminded me yesterday, it will be a considerable amount of time before residents can return to work and earn any money. He could fish, but lacks the customers to buy the catch.

We cannot fix the financial troubles of the Rockaways, but we can commit our time and energy to helping residents, many of whom have lost everything. I cannot possibly overstate the need for volunteers.

Create an account with New York Cares

It takes 5 minutes, then sign up for volunteer opportunities.

Do it.

A Technicolor Diet

Every year around Easter time, a mysterious box of Marshmallow Peeps would without fail make its way into my cupboard. It was my mom’s one guilty pleasure, an annual indulgence in a tradition that spanned to her own childhood. For the record, this was unusual because the rest of the year almost every edible morsel in my house had the word ‘organic’ stamped on it. Aside from their glorious sugar loaded goodness, another aspect of them intruiged my childhood sensibilities. Why were the little tiny birds sitting below plastic so colorful? Why were some blue, some yellow and others pink? The more I thought about it, I could scarcely remember ever having seen a yellow bird, let alone a pink or purple one. It set my mind in motion, why did the fake birds need to be colorful? Was it because they would otherwise look inedible? (probably.) Was it to celebrate the Christian-pagan welcoming of spring in the pre-approved color scheme? (again, probably.)
With the FDA reopening debate about the safety of food dyes, I think its time we examined what real function they serve in our edibles as well as the broader effects of their consumption. When we really start to look at our processed foods, the necessity for coloring becomes less and less clear. One could only say that it makes the food look more appetizing; but some could easily find fault with that assertion. I am one of them.
I had fully abandoned candy by the time I arrived at college. As a kid I loved M&Ms, devoured Mountain Dew and counted the days every year until that one, magical morning when I was allowed to have Lucky Charms for breakfast. As an adult I have mostly lost interest in the Technicolor diet. These days I mostly eat brown things. Hmm. It is certainly clear that children are the most frequent consumers of sugary, colorful ‘foods.’ For this reason it is especially troubling that recent research has linked food dye consumption to hyperactivity in younger people. The population known to be most affected by the products are consuming them most.
However it is not only the youth who enjoy dyed edibles. These ‘appearance enhancers’ have found their way into many of our foods; usually offering the façade of an ingredient that isn’t really there. Take these examples from the St. Petersburg Times:
• Aunt Jemima Blueberry Waffles contain no blueberries. The blue bits are Red 40 and Blue 2.
• McDonald's strawberry sauce? Call it McRed 40 sauce.
• Kraft's Guacamole Dip doesn't get its greenish color from avocados (because, we're told, there are hardly any in it). A better name: Yellow 5, 6 and Blue 1 Dip.
^{http://www.tampabay.com/features/consumer/article636211.ece}
It would be safe to say that Aunt Jemima could probably not afford to put actual blueberries in her waffles, nor could McDonald’s eke out the Strawberries for their sauce, and Phillip Morris would probably go out of business if it sprung for real avocados in its Kraft dip. There is no debate when it comes to the companies’ motives for food dye use, the alternative: real food would clearly be far too expensive for these companies. The question then remains, why are they trying to fool us? Can we not handle the truth, that everything would otherwise probably look some shade of brown without coloring?



Perhaps we are all a little bit too comfortable; we all like our food to look a certain way. If any scary government regulators tried to take away the artificial colors we would probably wind up huddled and shivering in a corner staring at the deep fried corn snack in our hand that WASN’T fluorescent orange. Researchers at Cornell’s Food and Brand Lab actually determined that people who ate the Cheetos without coloring (let alone the FD&C Yellow No. 6) did not register the cheese flavor, nor did they consider them “as much fun to eat.”^{[* ]}
There is no doubt that eating is a psychological experience, and the food industry certainly understands that fact. They know how much we will enjoy something, based on what color it is. After the government of the United Kingdom recently banned artificial dyes in British foods, the industry making the switch to all natural coloring. I wonder if this would ever be possible in our lovely corporate-ruled country. Alls I know is that the McDonalds customers of Great Britain get real strawberries in their sauce, and we are still stuck eating our fruit-inspired Red 40 glop.

^[*] Gardiner Harris, 'Colorless Food? We Blanch.' New York Times, April, 3, 2011. (http://www.nytimes.com/2011/04/03/weekinreview/03harris.html)

A Surplus of Hatred

^{source: http://www.moodle.munsw.org.uk/file.php/1/un_flag.jpg}

Pastor Terry Jones finally realized his vengeful ambitions this past month, alighting copies of a book, a religious book, a book considered the holiest text for millions of people across the world. Last year on the anniversary of the September 11th attacks he garnered a plethora of attention by announcing these plans, sparking international outcry pleading restraint, even from Barack Obama. The President warned of retribution for Mr. Jones’ actions abroad, that it could spark incidents that would put innocent lives at stake. (Remember the Dutch cartoons of 2005?) Given the lessons of the past, it would be hard to argue that Obama’s warnings were without merit.

After many months and many other news stories that shifted the lens of scrutiny from Mr. Jones, he proceeded in shocking the world on March 20th by overseeing the planned Qur’an destruction. What has unfolded in the following weeks has been shocking and deeply troubling, once more reminding a world often shrouded by denial, of the simmering anger that resides below the delicate civility of the people of the world.

In this past week parts of Afghanistan have erupted in chaos and rage. Thousands of protesters throughout the country have congregated, peacefully denouncing the destruction of the holy book, but more extreme actions have also overshadowed these In the normally placid northern city of Mazar-i-Sharif, knife wielding mobs assaulted a UN compound, causing the deaths of at least 15 people. In Kandahar, violence claimed the lives of at least nine during a planned protest of the Qur’an burning. Some have argued that Taliban factions covertly orchestrated the killings, manipulating the wants of ordinary civilians. Some would also say that the United Nations workers died in a violent retribution for the actions of a Florida Pastor. It is hard to comprehend the actions of any mob. We must, however not fall into the easy trap of finger-pointing, trying to link one petty, dangerous action to another.

Individuals like Mr. Jones often benefit from a media circuit in which the loudest voices receive the most attention. Without the media, Mr. Jones’ actions would simply be the deranged antics of a lone sociopath. With media coverage, he gains the status of spokesman. His crazed ideas become opinions, as legitimate as the words of any talking-head TV commentator or print columnist. The Pastor’s widely publicized event does not deserve media attention; his stunts and accompanying statements are nothing more than expressions of hatred, NOT types of speech protected under the first amendment.

Amy Davidson in The New Yorker asks: Did Jones feel, with all the other news in the world, neglected, as if people were talking about air strikes in Libya, and the tsunami victims in Japan, rather than about him?” (Full Article) In other words, did Mr. Jones help destroy the Qur’an through jealousy to merely reclaim the public spotlight? By even talking about him we are rewarding his childish actions. We are playing into his hands, blowing into a fire that threatens to consume the world.


^{Terry Jones surrounded by television cameras}
(tampabay.com)
It is foolish to look for links between the Afghan mobs and Qur’an burnings; it would be an escalation of the intolerance and prejudice that sparked this disastrous situation. It should perhaps make us question the almost decade-long United States involvement in the middle east, the continued military actions in Afghanistan, and our government’s general disregard for the autonomy of other nations. Perhaps this is why people in Afghanistan are angry, I would be too. In the future I only hope that mutual respect, understanding and love can overcome the stunning prevalence of hatred in our public discourse.

forward

Perhaps I should start at the beginning, why I decided to write a blog. I guess you could say I had a lot on my mind, or maybe too little. Its hard to say. Either way I wanted to articulate whatever thoughts that could be grasped before they floated away to wherever thoughts go. (Can they actually disappear?) Sometimes a bad thought germinates in your mind, the awkward shriveled fruit of an idea that can be painful to acknowledge. Won't it always reappear if brushed aside? My mother once told me that you can choose to change thoughts, but never actually rid yourself of them entirely.

That aside, it is pretty evident that I think a lot, mostly about politics ethics and movies (things I am highly unlikely to ever understand,) and I've also learned that no thought is truly good or bad; our thinking is simply a universal truth. I am going to try and write my thinking, we shall see how it turns out.