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Economic Sense

RSS By: Matt Bogard, AgWeb.com

Matt's primary interest is in the biotech industry and ag policy.

'Boot' on 'Throat'? How American is That?

May 29, 2010
By Matt Bogard

Recently our political leaders have been using some very harsh and vitriolic language in reference to citizens and private corporations, such as “we will keep our boot on the throat of BP” (YouTube video). Of course BP is a foreign company, but many Americans work for BP and depend on its products. Of course BP is in the middle of what could be one of history’s worst environmental disasters, but is that sort of language appropriate considering the government’s contributions both leading up to the disaster and the sluggish response?

By recently giving that very oil rig an award for safety, capping liabilities for drillers, and subsidizing the cleanup (funded by a 1 cent per barrel tax funded by oil companies) the government once again set up a roulette game encouraging risky behavior. And just like the financial crisis, when businesses respond to the governments risk taking incentives we get a crisis on our hands. And, just like with the financial crisis, it looks like the government’s response is going to be more corporate handouts and incentives for more risk taking. We saw the same thing in the auto industry as well.

From Breitbart “Responding to the massive BP oil spill, Congress is getting ready to quadruple—to 32 cents a barrel—a tax on oil used to help finance cleanups. The increase would raise nearly $11 billion over the next decade.”

They are again incentivizing more risky behavior, except with a much higher tax that will likely be passed on to you and me- so now if this goes through the government will be putting its boot on our throats every time we fill up.

But let’s not stop with BP. In recent headlines we see that government is putting its boot on the throat of a farmer near the Canadian border through eminent domain, taking a portion of land critical to their dairy operation.

“We have a buyer holding a gun to our head saying you have to sell or else.’’ “It’s like taking a leg off a stool. If you reduce the hay, you reduce the herd; if you reduce the herd, you immediately affect the viability of the farm,’’ Brian Rainville said. “Last year, the farm lost money. Right now, we are hanging on by our fingernails.’’ (Boston Globe)

With proposals like cap and trade, legislation like the Clean Water Restoration Act ( which hasn’t passed as far as I know but keeps reincarnating itself under different names), attacking farmers for obesity, proposed tax increases on thousands of farms, and the continual onslaught of biotech regulations, eventually it looks like the government’s boot is going to come down on one American farmer after another. It may not happen publicly though until they have taxed and regulated the industry into bankruptcy or some crisis occurs, so just like with the auto industry, the financial industry, and the oil spill, they can walk in and act like they had nothing to do with it and say 'we'll keep our boot on their throat until this is fixed.' How American is that?

References:

REFERENCES:
David Filipov, Globe Staff / May 17, 2010 Vt. farmer draws a line at US bid to bolster border (link)

Oil tax increase would help pay to clean up spills
May 24 04:20 PM US/Eastern
By STEPHEN OHLEMACHER
Associated Press Writer

Beef Magazine (online) Nov 2, 2008 By: Joe Roybal

AP IMPACT: Fed'l inspections on rig not as claimed
By JUSTIN PRITCHARD, Associated Press Writer Justin Pritchard, Associated Press WriterSun May 16,
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COMMENTS (7 Comments)

Matt Bogard
Correction: the previous oil cleanup 'bailout fund' I mentioned was funded by an 8 cent tax, not 1 cent.
11:47 PM Jun 8th
 
Anonymous
Bert your socialist/marxist comment fits McCain/Palen. She came from the closest thing to socialism in this county, Alaska. Take the oil money and spread it around and she has the nerve to stand in front of us and preach socialism.
10:01 PM May 31st
 
 
 
 
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