How NOT to Lobby 101
The other day I had one of those lobbying experiences that makes you appreciate all the more why we live in Wisconsin.
A group of lobbyists for the petroleum industry visited my office to discuss why they thought the Governor's tax on oil profits was bad. No surprise. The local Wisconsin lobbyists were professional and polite, like you would expect.
But they brought in a "big gun" from Washington DC to present the side of the petroleum industry, an economist from a large trade association. Yikes. Now I know why I'm so glad to live in Wisconsin.
First off, using "bloated ego" and "pompous" to describe some people only makes them, well, more pompous then even before. Enter the DC suit to explain to us dairy folk about how the e-con-o-my works. You see, oil companies really don't make that much money, as a percent of sales. My first B.S. detector went off - "net income/over sales" in a specific quarter still doesn't address obscene profits, it just provides misdirection.
Then the suit from D.C. went on to lecture me (the poor fly-over country boy that I am) that this really hurts public employees and other that have pensions that invest in oil companies. B.S. detection number two. I asked a union leader who is a friend of mine about this, and after his laughter subdued, he offered to counter that arguement. Not necessary I told him.
Then, my six-figure lobbyist from D.C. went on to throw out the biggest whopper of them all, that if we tax them, gas companies will leave Wisconsin. I'll repeat that for all you Wisconsin folk eating your cheddar cheese that we are always eating. Put it down for just one minute. The glass of milk too. Gas stations will pull out of Wisconsin according to the D.C. suit.
Now I myself was almost an economics major back in college. Three classes shy of the major, I realized that the major was largely theoretical, rarely practical and most importantly, nearly impossible to get a real job in a real world (ie Wisconsin) with it. So I switched majors.
But the absurdity of saying a small assessment of about $270 million over the next two years on excessive profits would drive gas stations out of Wisconsin, making us go horse-and-buggy statewide, is ridiculous. Exxon alone made about $4.1 million PROFIT per hour last year.
When I explained to the suit that given the market forces (big concept here), if any did indeed leave the state (which I explained to him why they wouldn't), others would fill in the gap to pick up the business. He pontif....pontific.....went on and on (hell I am from fly-over country!) to tell me why he was right.
After all his huffing and puffing about the tax, he explained to me he was on his way to the Capital Times editorial board to make his case. I told him he might want to rework his presentation a bit, to which he proudly (pompously in Wisconsin) said he wouldn't change a thing. To that, I gave him an advance "I told you so" when he receives a bad editorial.
But I wanted to share just a bit of my day, when Washington types come in to impress us poor Wisconsin folks. Any side of an issue has good points and bad ones. But it's always best to stick with your best arguments, with quality over quantity. I felt bad for the Wisconsin-based lobbyists, who tried their best with their well-suited friend. But as we gear up for the budget, this is an example of what NOT to do when lobbying in Wisconsin. I just wanted to get the word out before the fun REALLY begins...
8 Comments:
W.... O.... W....
He really said that gas stations would leave Wisconsin? How in the world did he get a job? What's sad is I'm sure those talking points were worked on for days and that's what they came up with.
Mark, as you well know, the oil companies are full of shit and it doesn't take a rocket scientist to see it. How is it that EVERY brand of gas is sold for the same price? The largest difference you will see between stations is about a cent. Not a single company has developed the capacity or efficiency to undercut all the others?!
Oil companies will say of course that the reason they're all the same price is that they have to pay the same amount as everyone else for oil. First off that's blatantly preposterous as larger companies will get a better price than smaller ones (take Walmart for example) on any product, I don't care what it is. But lets say they really all pay the same per barrel of oil. Why are their profits increasing then? If the price of oil goes up they should increase the cost of gas by the amount needed to cover the increased cost of oil. Their net income shouldn't increase and yet it has (in fact in some cases its doubled!).
It's blatantly obvious that some sort of anti-competitive behavior is going on. Just make sure that you don't stop at the tax on oil company pro
Oh and by the way Mark, you're not doing a whole lot better on blogging more often.
Mark,
Coming from a man that is 3 classes shy of a Economic degree I would have thought better. The facts are that 'Big Oil' has a profit margin of 9% and has for a long time. If that profit margin had jumped to let's say 20% you have a case. You own a business Mark I know for a fact that sign companies make a hell of a lot more than 9% GTM, christ mark-ups on material eclipse 20%. If the market dictates your ability to make money I am all for it make 100% if it is allowed Quit toeing the line here. I am all for cheaper forms of energy but these people have to step to the plate.
As for Eric's line of why does gas cost the same? I don't know maybe because they purchase the oil all at the same price?? Just a guess, please Eric profit margin and profits are actually two seperate things. Here is a quick math problem for you.
If you have a product you bought at 1 dollar and want to make 10% on it you will charge $1.10 to make your 10% ($.10 profit). Then the supplier increased the price of the product to 1.50 now to still make 10% profit you will sell that product at 1.65 and you will still make 10% but yes your profit has increased to $.15.
I hope Mark with the price of oil based products on the rise you have not increased the price of vinyl/poly banners you don't want to make those profits do you??
Regarding Doyle's tax on oil profits, the profit margin percentage defense is poor. They don't tax profit margins, they tax dollars.
It really doesn't matter if their margin is 1.035%, if they show a profit of 40 zillion dollars, that's the bottom line. Some businesses have profit margins on their product as high as 32 to 35% and they barely break even.
Now I will say that his statements about gas companies leaving Wisconsin was stupid.
However an equally absurd statement was you saying:
Now I myself was almost an economics major back in college. Three classes shy of the major, I realized that the major was largely theoretical, rarely practical and most importantly, nearly impossible to get a real job in a real world (ie Wisconsin) with it. So I switched majors.
To which I ask, isn't that what politics is, Largely Theoretical,and Rarely Practical?
My next question is this: Since Wisconsin seems so intent on taxing the excessive profits of Oil Companies, how long, will it be until they start taxing the excessive profits of other companies, like for instance Roundy's?
After all they are the largest grocery wholesaler in the State Of Wisconsin, in addition to owning all the Pick n Saves, Copps, and Rainbow food stores. Surely THEY must be profiting "on the backs of poor people" as the saying goes. Which incidentally is the same argument that the legislators are using against the oil companies.
So how about Mark, how long until the State of Wisconsin will start regulating my food bill? Thats where we Wisconsinites can use the most relief!
Well, heck. Us cheese-eatin Wisconsin hayseed hicks is sho confused by yo ec-y-nom-ics. I am mighty glad we got you to represent us Mark.
I love the blog that you have. I was wondering if you would link my blog to yours and in return I would do the same for your blog. If you want to, my site name is American Legends and the URL is:
www.americanlegends.info
If you want to do this just go to my blog and in one of the comments just write your blog name and the URL and I will add it to my site.
Thanks,
David
http://www.madison.com/tct/news/stories/index.php?ntid=127473
14 x 22 weathercoated yard sign .53 cents a piece that is what I charge a guy in town that makes signs. Tax the sign makers!!!
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