We've seen this gasoline movie before
With gasoline prices topping $4 per gallon, Senate Democrats want the government to grab some of the billions of dollars in profits being taken in by the major oil companies by instituting an extortion scheme called a "Windfall Profits Tax." Aside from unfairly punishing an industry we have been conditioned to hate, it won't work economically and we know this is true -- it was tried before.
A major problem with this smarmy tactic is the fact that the oil companies only make approximately 12 cents per gallon on gasoline -- they make their "obscene profits" elsewhere. Fortunately for our economy, outnumbered Senate Republicans managed to filibuster the extortion scheme and temporarily kill it.
But those of you 40 years of age or younger and upset about gasoline prices are clueless. What's worse, you have allowed yourselves to be brainwashed into believing that we are living through the worst economy in 50 years. You haven't the vaguest idea about what a bad economy is REALLY like.
Carter: America's worst president
During Carter's administration, the economy suffered double-digit inflation, double-digit interest rates, double-digit unemployment, severe oil shortages, and stalled economic growth. Productivity growth in the United States had declined to an average annual rate of less than 1 percent! Investments in fixed income (both bonds and pensions being paid to retired people) dwindled to almost nothing.
America was suffering through stagflation (economic stagnation coupled with price inflation) as well as staggeringly high interest rates. Price inflation (a rise in the general level of prices) created uncertainty in industrial budgeting and promoted nationwide labor strikes for pay raises -- a course that only made things worse.
The prime lending rate hit 21.5 percent in December 1980, the highest rate in U.S. history under any American president. The high interest rates led to a sharp recession in the early 1980s, a recession finally overcome by President Reagan.
"... the only economy worse than that during the Carter administration was the Great Depression of 1930-1939."
Everyone who lived through the gas lines and rationing at filling stations, the inability to buy houses or pay for groceries, heating oil, clothing, and durable goods remembers. You under-40s don't, but the next time you complain about the economy you had better remember that the only economy worse than that during the Carter administration was the Great Depression of 1930-1939. We live in a boom time by comparison.
But what about gasoline prices?
Without doubt, the grossest economy-related blunder of Carter's, abetted by his willing accomplices in a Democrat-controlled Congress, was to invoke a windfall profits tax on Evil Big Oil -- thinking they could tax their way out of the messes they made and punish the major American oil companies for their trumped-up charge of greed in the process.
Well ... you know what happened. The punitive and unwarranted taxes discouraged domestic oil and gas exploration, stifled refinery production, caused oil prices to rise instead of fall, and dealt a near-death blow to the nation's economy. Major corporations faced bankruptcy and small businesses were devastated.
This is important to remember because we now have a Democrat-controlled Senate and a Democrat presidential candidate who want to do exactly the same thing! What's bad for America is good for the Left. What's good for America is bad for the Left, because they want you in pain, your anger directed at the administration so that you'll demand "change."
Keep what you just read in mind the next time you hear this year's clueless Democrat candidate, his congressional toadies, and their lap dog Drive-by Media utter the phrase "failed policy of the past."