Democrats Know How to Fix Economy: Take It Over

Remember the windfall profits tax?

Not that long ago, Barack Obama was proposing to tax the "excessive" profits of energy companies. Hillary Clinton endorsed a windfall profits tax -- as did just about any Washington liberal within shouting distance of a microphone. In May, Senate Democrats introduced a windfall profits tax that, they said, would "address the root causes of high gas prices." Sen. Chris Dodd suggested excess profits (whatever those were) ought to be reinvested or rebated to consumers.

Pennsylvania Democrat Paul Kanjorski wanted to go even further. He suggested a federal "Reasonable Profits Board" that would decide how much money oil companies could make. And California Rep. Maxine Waters warned energy company executives that if oil prices kept going up, "this liberal will be all about socializing -- would be about -- basically taking over and the government running all of your companies."

Two years ago, Sen. Charles Schumer floated a similar idea: "I'm proposing an amendment on the floor today or tomorrow, depends on the schedule, that will begin a full-scale investigation as to whether the oil companies should be broken up," he said. "When you only have five competitors, you don't get price competition and they're all so happy with their profits, they avoid looking for alternatives to fossil fuels." He raised the idea again in 2007.

On and on went the litany: Michigan Rep. Bart Stupak proposed a bill, signed by 100 co-sponsors, that would have given 10-year prison terms to oil-company executives who were found guilty of price gouging. Washington Sen. Maria Cantwell wanted to use new rules and laws "to police the oil markets and stop any kind of activity that is spiking the price of gasoline and ruining our economy." In 2005 Cantwell joined with Sen. Dianne Feinstein in sponsoring legislation that would have allowed the president to declare national energy emergencies and penalize energy companies for "unconscionably excessive" profits.

"The oil companies told us it is all about supply and demand," she fumed, but "we believe the American people deserve real answers about the causes of the recent run-up in fuel prices."

FAST-FORWARD a couple news cycles. Nobody is grousing about windfall profits now. (If only!) The current problem is an economy that has collapsed like a soufflé. Prices -- including gasoline prices -- have tanked as demand has shriveled up.

The Big Three domestic automakers are in serious financial peril, and Washington is all about -- you guessed it -- socializing . . . .Basically, taking over and the government running all of their companies.

Earlier this month Senate Democrats cobbled together a plan to fork over billions in taxes, take an ownership stake in the automakers in return, and set up an auto czar to remake the industry.

They knew just how to do it, too. According to The Washington Post, Democrats held that "part of the long-term inefficiency of the auto industry was its reliance on gas-guzzlers that no longer sell."

As Florida Sen. Bill Nelson said: "I want to see the automobile industry, in exchange for federal assistance in order to keep them solvent, that they agree to a retooling of the industry to make fuel-efficient vehicles on a fleet-wide basis, instead of what they've done in the past, which is to build gas-guzzlers when the price of gas was cheap. I would also like to see an overhaul of the leadership of the Big Three. They are the ones that drove this industry into the ground, that it's nearly bankrupt, and for a fresh start they need new leadership."

Sen. Diane Feinstein agreed, insisting that auto companies should be forbidden to use bailout funds to build "especially inefficient vehicles." So did Schumer -- who insisted that Detroit abandon the "business model based on gas." What Detroit needs, he said, is "a business model based on cars of the future, and we already know what that future is: the plug-in hybrid electric car." Oh.

SO, JUST to recap: When gasoline prices were sky-high, the "root cause" was not consumers who bought gas-guzzling SUVs, but rather greedy oil-company executives gouging the hapless consumer. And when the automobile companies got into trouble, the problem was mismanagement by executives who had foolishly planned around the profitability of gas-guzzling SUVs.

But it doesn't matter what the problem is or where it started. The answer is always the same:

When companies make too much money, the government should take them over. And when companies make too little money . . . the government should take them over.

Well, maybe. Given the size of the national debt, that's one surefire way to solve the windfall-profits problem.

My thoughts do not aim for your assent -- just place them alongside your own reflections for a while.

--Robert Nozick.
Contact A. Barton Hinkle at (804) 649-6627 or .