Doyle's Oily Smear Machine

Gov. Jim Doyle's hit squad, the Greater Wisconsin Committee, is running a radio ad that is driving me nuts.

WisPolitics has the GWC's press release detailing its ad on Mark Green's "Big Oil" connection.

Like the other GWC ads, it's positively dopey.

Excerpt from the ad:

SOUND EFFECT: CASH REGISTER

That’s the sound of big oil companies ringing up a record $60-billion in profits.

Money out of the pockets of Wisconsin’s middle class -- right into fat paychecks for oil company executives.

But it’s not just what you pay at the pump. Your tax dollars are going to Big Oil, too, thanks to Congressman Mark Green.

Time after time, Mark Green votes with Big Oil and against Wisconsin consumers.

This ad plays on the ignorance of consumers and the successful demonization of the oil companies.

The ad gives no context whatsoever.

Big Oil is such an easy mark. Everyone feels victimized by the oil companies, right?

Naturally, the GWC would exploit that negativity to smear Green.

I have no interest in carrying water for the oil companies. I don't like paying $3+ for a gallon of gas.

However, I do think the accusations made by the GWC need to be put in proper context to be understood.

The GWC complains about the "record profits" made by the evil U.S. oil companies and states that Mark Green is helping Big Oil to rip off Wisconsinites.

First question: How do the profits of the oil companies compare with those of other industries?

Oil's profit margins aren't excessive when compared with other industries' profit margins.

According to ExxonMobil:

Industry earnings are high, but our profit margins are in step with other industries. How can that be? Because the scale of our industry is enormous.

...For every dollar of sales, the oil and natural gas industry earned 8.2 cents on average during the third quarter of 2005. That compares to a national average of all major U.S. industries of 6.8 cents to the dollar during the same period. And many industries had larger profit margins than we did, some as high as 18 cents to the dollar.

The reason our earnings top many other industries' but our profit margins do not comes down to two words: revenues and costs.

Here are some more interesting numbers.

From The Tax Foundation:

Do oil companies currently pay too little in taxes compared to profits?

[O]ver the past 25 years, oil companies directly paid or remitted more than $2.2 trillion in taxes, after adjusting for inflation, to federal and state governments—including excise taxes, royalty payments and state and federal corporate income taxes. That amounts to more than three times what they earned in profits during the same period, according to the latest numbers from the Bureau of Economic Analysis and U.S. Department of Energy.

These figures do not include local property taxes, state sales and severance taxes and on-shore royalty payments.

Here's more.

[T]ax collections on the production and import of gasoline by state and federal governments are already near historic highs. In fact, in recent decades governments have collected far more revenue from gasoline taxes than the largest U.S. oil companies have collectively earned in domestic profits.

This puts things in an entirely different light, doesn't it?

The Greater Wisconsin Committee's ad is effective to the extent that citizens view the oil companies as slimy profiteers.

No question, that view is prevalent. It's also unfair, as the above figures show.

Of course, the GWC isn't interested in presenting the reality of the U.S. oil industry and earnings and profit margins and taxes.

It's interested in attacking Mark Green by aligning him with the Big Oil demons.

The ad conclues with this:

Why does Mark Green keep voting with Big Oil and against Wisconsin families? Maybe it’s the $40,000 Big Oil has given his campaign. (SOUND EFFECT: CASH REGISTER.)

Tell Mark Green to stop siding with the special interests and start looking out for Wisconsin families. Whose side is Mark Green on, anyway?

Is the Greater Wisconsin Committee really going to whine about $40,000?

Shall we talk about Doyle and the WHOPPING loads of money he has received from tribal gaming groups?

We know that Doyle can be bought.

The Greater Wisconsin Committee really shouldn't go there. Not too smart.
_________________________________

Read Green's response to GWC's oily ad.