A Satirical Look at the Energy Crisis

Many years ago a teenager named Jimmy Shell lived on a dairy farm located in the American Midwest. His father owned a large cattle operation that supplied the area with premium milk and also shipped it to neighboring states. The residents of the area enjoyed the quality and affordability of the milk. Jimmy loved working on the farm and planned to take it over when his father chose to retire. Mr. Shell raised Jimmy with good business sense and showed him the different aspects of running a business. At that time, the farm employed a dozen workers and had thousands of dairy cows. Mr. Shell had been in the business many years and wished for nothing more than for his son to take over and make the business even more successful. Competition from milk importing companies demanded a cutting edge business model and the aspiring young Jimmy would be just the one to enlarge and expand operations. Milk was then sold for $2.00 a gallon and Mr. Shell explained the concept of a profit margin to Jimmy. A profit margin simply was the amount of actual profit for every dollar of revenue that came in. It was very commonplace for most businesses to earn anywhere from 8% to 25% on every dollar that they took in. It was not important what the total revenues were, but how much the business was able to realize as net profit. Even though he was a young man, Jimmy clearly understood this concept and he would discover later just how hard this was for some to grasp. For every gallon of milk that the dairy farm sold, $1.00 went to expenses, 60 cents to taxes, and 40 cents went to profit. This ratio meant that the farm had a 20% profit margin. Even though annual earnings were over $1,500,000, the net profit was only $300,000. After paying himself a salary, Mr. Shell didn’t have a large amount left to expand operations with. He still had to pay his regular income taxes because he was one of those “evil rich people” who earned over $250,000. Thank goodness most people didn’t know how much he earned. You see, a lot of people who earned that amount of money were small business owners who had to file this business income on their personal taxes. Wealth envy is a powerful thing though. Many people thought that high income earners should be punished because they obviously did something wrong to earn that much. The rich kept getting richer because they kept doing the smart things what made them rich in the first place. Mr. Shell was a prime example of fulfilling the American dream. Because he was getting older, he felt that Jimmy would be just the one to get the business booming. Employees were treated well, customers loved the product, and everyone looked at Mr. Shell as a pillar of the community.
During the course of the next few years, Jimmy was able to successfully transition into his new position of operations owner. He immediately saw ways that the operation could be streamlined to produce more efficiently, but one problem loomed very quickly. Shell brand name milk was in increased demand and the supply was just not meeting the demand. He had two choices—either raise prices or increase supply. The herd of cattle that he owned was not getting younger and their output would eventually decrease. As a result, Jimmy bought additional dairy cows which increased the supply of milk. He did not have to raise actual prices and customers were relieved. The operation continued to grow and Jimmy decided to lower prices due to increased competition from nearby dairy operations. Everything flowed along smoothly until a local government problem emerged. A disillusioned politician had lost an important election and quickly faded from the public eye. To bolster his public image and to earn large sums of money, he created a documentary attempting to prove that the planet was warming as a result of carbon emissions. The film was based on computer models that disregarded the hard data that scientists presented to the contrary. Nonetheless, a mass hysteria developed in the typically uninformed segment of the population. They felt that emissions had to be reduced to meet the threat of global warming. A study released by a group of researchers “concluded” that methane gas emitted by animals contributed to the emissions greatly. Local government officials wanted to appear that they were doing something about this issue, so they came up with a comprehensive plan to convey to voters their brilliance in solving a problem. All area dairy farmers were summoned to a meeting to be informed of a new law that was passed. The legislation was called “The Cattle Emission Cap and Trade Act.” New emission standards were set that the dairy farmers had to adhere to or be penalized with heavy fines. Large operators could buy emission credits from smaller farmers to make the playing field even. Jimmy’s operation was directly affected due to its size. Since his profit margin had enough of a span, he was able to lessen his margin and absorb the new expense without raising actual prices. Because revenue still rose due to volume, Jimmy poured a large portion of this back into his business. He was able to hire new employees and create more economic growth in the community. His operation eventually became so large that he purchased an even larger herd of cattle but still needed outside capital to bolster the investment. His operation officially became Shell, Inc. and he took the company public. Many shareholders flocked in to buy shares of this wonderful business. Investment managers made large investments of pension and retirement funds because of the potential return. Jimmy was finally able to purchase more dairy cattle and increase his milk output. His profit margin was the same but due to increased volume, his profits surged. Teachers, auto workers, blue and white collar employees who had their retirement accounts and investments invested in Shell, Inc. were very pleased to see their portfolios grow. Jimmy Shell became a well respected businessman and many admired what he had done with the now very successful company.
Success always runs into some trouble though. The issue of carbon emissions was a continued irritant as environmentalists protested the methane gas produced by the farm. They put increasing pressure on government regulators to do something about it. The best method introduced to accomplish this came in the form of soy milk, also known as soythenal. Soybeans were raised heavily in that area of the country. Its primary use was for animal grain. It was also used for people’s food products. The negative side of soy milk was that its benefits did not outweigh the cost. It took large volumes of soybeans to produce a single gallon of soy milk. The emissions caused by producing all the extra soybeans did more damage to the environment that regular cows possibly could have. Most politicians and environmental Marxists were nominally educated and did not understand this basic principle. The cost simply outweighed any potential benefit. Nevertheless, legislation was passed to require regular milk to consist of 10% soymilk. The idea was supposed to lessen demand for regular milk, thereby lowering the amount of carbon emissions put out by dairy cattle. However, farmers continued to sell soybeans to local food and grain companies because they could earn more profit that way. To increase the production of soymilk, congressmen quickly passed legislation to subsidize the soybean farmers. They would be given taxpayer money in return for selling their soybeans to soy milk producers. In fact, farming soybeans became quite lucrative. Through government funding, raising soybeans for soy milk was worth more than for conventional growth. Many farmers signed up for the plan and harvested their soybeans. Sadly, this adversely affected the food and grain markets. Food and grain prices skyrocketed because of decreased supply. The demand for regular milk did not decrease as a result of the program. In fact, the booming population of the area was not factored in previously. Demand increased while supply decreased. Jimmy had one of two choices—either increase output or raise prices. Because of the size of his business, purchasing more cattle was always an option. Or was it? The environmentalists were not pleased that demand did not decrease for milk. They believed that it was a moral crime to not reduce carbon emissions more drastically. In the meantime, a group of scientists had conducted a study discovering that methane gas had no impact on global warming. In spite of this, radical extremists once again turned to legislation when they could not prove their agenda scientifically.
Perhaps the most extreme conservation group was an organization called P.E.T.A. (People for the Ethical Treatment of Animals.) Through their internal “research,” they came to the conclusion that milking a cow was cruel and should be classified as torture. Although highly controversial, this new belief permeated the thinking of many activists and new actions were demanded. Politicians were not too thrilled about enacting new laws regarding this, but extremists groups were vital donors to their campaigns and they were not about to lose that support. They had to ride the fence because farmers would be especially outraged. Bowing to pressure, legislators passed a law that allowed the existing milking of dairy cows, but prohibited any additional cows to be milked. Activists were convinced that regular milk would become a thing of the past and soy milk would be an alternative use that would be much more environmentally friendly. The Dairy Farmers Association appealed this ruling but got nowhere. Their production would now be capped while demand continued to slowly increase. At first, Jimmy’s operation was able to absorb the cost impact by cutting expenses. He was forced to downsize his workforce and let a few of his employees go. This alone would not be a long term fix. By doing a cost analysis, he discovered that his milk prices had to be raised $1.00 per gallon to keep up with his ever increasing expenses and in response to increased demand. Soybean prices continued to rise and grain costs along with them. His profit margin was actually lowered to about 12 cents per gallon. Because most consumers were government educated, their grasp of economics was very limited. They just knew that all of a sudden they were paying a lot more for milk than they had in the past. The finger of blame needed to be pointed somewhere, so who would be most likely to suffer the blame? Jimmy Shell. You see, some reporters looked at the public financial records of Shell, Inc. and saw that he was making millions of dollars in profit every year. People were very upset in hearing this and didn’t think it was fair that they should pay a high price for milk while Big Milk was making millions. No one paid attention to the fact that Shell Inc. was making only 12 cents a gallon for all of its work while the government collected about 70 cents a gallon in taxes. The government had nothing to do with milk production, but was ready and willing to collect tax revenue and regulate the milk companies. In fact, these taxes were in addition to the income tax that was paid by Shell, Inc. The company paid millions in taxes every year but consumers thought that it was getting off the hook completely. They would have even paid more, but there was an existing tax break that had enabled the producers to expand their business and provide more jobs to people. The stark fact was that people became so emotional about the issue that they felt the milk companies should not be allowed to make profit. This was the first time in American history that public attitude demanded that a business making a product was expected to find an alternate to drive itself out of business. Instead of trying to figure out how this problem got started, people became increasingly outraged that Shell, Inc. was making “excessive” profits on the back of the middle class. In everyday conversations, people only had to talk about milk profits and they somehow sounded smart.
This was the same public that would normally look favorably upon hard work and success. If a little boy were to sell lemonade at a little stand and make 50 cents a cup, he would be admired for his work and creativity. If that same young man opened a large lemonade distributing company selling cans at 50 cents apiece but earned billions in profits, this would just be too much. How dare someone earn “too much” money while working people bought that product? People looked at only the amount of money made and not the actual margin of profit. They were willing to spend $2.00 on a bottle of water and become outraged over $4.00 a gallon milk. Forget the price of a latte at Starbucks. Cosmetic companies could earn over 20% profit margin and no one cared. Big milk was such an easy issue to demagogue so politicians used it whenever possible.
There seemed to be no real solution for this problem. However, this time was different. This was an election year. Because many politicians lacked basic knowledge of economics, so-called “solutions” were suggested to fix this problem. A section dealing with supply and demand in an economics textbook would have yielded valuable information. Supply needed to be increased to bring down prices. The suggestions were quite comical to observe. A leading senator from the Northeast stated that neighboring importers of milk should be forced to produce more milk from their decreasing supplies or face economic sanctions. Why not allow milk companies to obtain more dairy cattle to increase the milk supply? Liberal politicians countered that the dairy farmers had enough cattle already but didn’t get them to produce enough. This was laughable because any normal person would have known that some cows just don’t produce like others. Some cows had abnormalities which caused them to produce milk that was unusable. Two presidential candidates introduced the concept of a “windfall profits tax” on the milk companies. Since when did the government decide what a private business should make in profit? A couple presidential candidates were very enthusiastic about the idea because the mindless masses would love it. What was not told was that this had already been tried. Just a few decades earlier, a president had decided to impose a windfall profits tax that actually lowered government revenue and drove prices higher than before. A Midwest senator among others loved to give Congressional floor speeches demonizing the milk companies and how much profit they earned. She and the presidential candidate she endorsed spouted off numbers regarding how much the milk companies earned per minute. Due to their size, it was no wonder that milk companies earned massive amounts of money. The presidential candidate tried to compare what they made per minute to what a single employee could earn in a year. Since this candidate’s personal income in the previous year was over $4 million dollars and the average income of an American was $45,000, wouldn’t it then have made sense to impose a “windfall income tax” on his earnings? He was a politician so he was exempt from wealth envy. That is why the speaker of the House could be worth over $50 million and no one blinked an eye. These politicians were content to direct anger at private business instead. Society had shifted from embracing free markets and competition to try increased government regulation. This had never worked in other countries but people wanted to try it here. This crisis was reached by design. The global warming “threat” was merely a propaganda vehicle for anti-capitalist groups who wanted to destroy the economy. This would force people to rely on the government. Many environmental groups consisted of members who were once a part of or had sympathies to socialist groups. The effect of cows and the so called carbon producers were not a factor at all. These activist groups just wanted to create a disdain for profit and a free market economy.
Public sentiment against Big Milk continued to rise until it seemed at almost a breaking point. Politicians previously did nothing about the milk shortage but now stuck their fingers in the air and figured out that the issue was very heavy on the minds of voters. Rather than look for ways to increase the supply, they summoned Jimmy Shell to a congressional hearing. Jimmy had already been to dozens of these hearings and it was always the same old story. Congressmen would berate him for charging so much for milk “on the backs of working people.” These hearing were broadcasted on cable news and voters saw images of milk company owners raked over the coals for seemingly gouging consumers. One such senator who was the senate whip asked, “How could you do this to us? You are making millions of dollars in profits while low income people suffer.” This same senator proudly posted this video on his website as did other senators. What was not shown was the response of Jimmy and other milk producers. They informed Congress that prices would go even higher if they were not allowed to expand production. In response, a senator from the West Coast suggested that a government sociali……she meant “government takeover” would be the answer instead. This suggestion seemed so outrageous because every program that the government ran including Medicare, Medicaid, Social Security, and other entitlement programs were either a disaster or teetering on the edge of bankruptcy. This would go against logic but then again, uneducated voters wouldn’t know the difference anyway.
Since this was an election year, presidential candidates joined in too. They promised all kinds of fixes that would end this problem. The majority party in Congress had promised two years earlier that they would lower prices that seemed high at the time. Rather, under their leadership, the price of milk per gallon was on track to double in the two years time that they were in power. They instead blamed the sitting president because it was a well known fact that he caused bridge collapses and natural disasters. Even though he pushed for milk expansion, the other party could not allow that to happen. They wanted their candidate to win so badly, they could not afford for the economy to improve and prices to decrease while he was still in office. Promises were made that milk prices would be lowered under a new president, but no one seemed to pay attention to their disastrous track record that had the opposite effect. Maybe that is why an “unpopular” president had an approval rating of about 30% and the Congress sunk to a new low of 9%. When two prominent candidates emerged for the majority party, each had their own ideas on how to solve the problem. Both of them loved to vilify the milk producers as causing the problem, but they had slightly different approaches. One candidate suggested that Jimmy Shell and other should have their profits confiscated from them and be used to develop alternate sources of milk. Her idea coincided with the socialist views that her party held. The other candidate proposed the failed idea of a windfall profits tax. He wanted to confiscate that money from the milk companies and redistribute it to the “working people.” We know from history how that went the other time it was tried. A new government agency would be created to determine what amount was too much for milk companies to earn. Who was so naïve to believe that this agency would stop there? There were companies that had much higher profit margins, but were less easy to demagogue. Internet search engines, cosmetics, and some other service industries made a much higher profit margin but that didn’t matter because people didn’t care. It only mattered that prices were higher on things that they needed. They thought that somehow taking the profits of a company would magically cause prices to drop. This same presidential candidate was also emphatic that expanded milk supply had to be hindered at all costs. Instead, he watched companies begin to fail and unemployment rise as many industries were forced to raise prices and lay off employees to cut costs. This was irrelevant though because naturally the sitting president would get all the blame, even though it was the inaction of the Congress to allow milk expansion. He used popular catch phrases and slogans to convince people that prices would magically drop if only he were elected. Under his administration, milk companies would be investigated for gouging poor consumers. His best alternative? Make sure that all milk transport trucks had properly inflated tires. What a presidential and ingenious way to solve the problem.
Jimmy Shell watched all of this unfold and the future looked very bleak for him. It was obvious to see that he would be eventually regulated out of his business. He saw growing trends that reinforced his fears. In a neighboring country, citizens had adopted the carbon emission hysteria and took steps to reduce their contribution to it. Small air tanks were created that cows were required to wear on their backs. This would collect the methane gas emitted by cows. As usual, all those ridiculous ideas cost a lot of money and milk prices there continued to skyrocket also. That would eventually come true for Jimmy someday. He was already battling the proposal of a politician that introduced legislation mandating a national cow registry. Every cow would have to be tagged and registered in a national I.D. system so the government would make sure dairy farmers were not obtaining milk from cows illegally. Any person with common sense would have realized that eventually the entire milk producing population would die off. All these cumulative problems produced a result which the average citizen did not expect. Government intervention was supposed to punish Big Milk and lower prices for everyone. Forcing producers to cut emission had a heavy financial toll on businesses to comply with all the regulations. Soythenal proved to be a disastrous alternative. The amount of carbon emissions produced actually was a larger number than to produce the same amount of regular milk. Because such a high volume of soybeans were used to produce soythenal, food supply was affected. Prices skyrocketed and the very people that were supposed to be helped were the most impacted. Regular milk that used to be an inexpensive necessity turned into an expensive luxury. People became outraged and demanded action from their elected leaders. The majority party insisted that people needed to drink less milk and buy soy milk as an alternative. Since pure soythenal was at least three times more expensive than regular milk, consumers had to bite the bullet and use their money for this. Politicians who were supplied milk without charge through their benefits package really cared less that the economy suffered. The more important issue to them was the fact that carbon emissions were reduced, even if by a small percentage. Or was this something to be proud of? As a result of objective research, over 20,000 scientists concluded that the earth was not warming. Research previously done on computer models were not an accurate indicator. In fact, in the previous entire century, the Earth had warmed one degree. And none of the alarmists had any idea what the ideal temperature of the planet should be. Just 30 years earlier, global cooling was the environmental threat
A proposal had been introduced 15 years earlier that would have helped immensely to alleviate the problem. The sitting president vetoed that legislation. It would have expanded domestic dairy expansion and currently produced millions of gallons of milk per day. Since this was now such a pressing issue, the minority party tried to bring this up again. The majority quickly halted the idea, citing erroneous and idiotic reasons for doing so. The leadership contended that new dairy herds would not produce enough milk to lower the prices. The Senate Majority Leader actually said that milk would “make us sick” and eventually should be eliminated. One old veteran senator from the East Coast vehemently resisted the prospect of building a soythenal plant near the ocean bay outside of his home but wanted mass amounts of them built elsewhere. They needed to be where he couldn’t see them. He was an elitist who felt others should have to bear the load instead. It seemed ironic that at the same time they were demanding that importers should raise its milk production. There were enough cattle here that could have produced far more than those importers combined.
It did not matter to the environmental alarmists that the economy suffered. Manufacturers that made products containing milk were hit hard. They were forced to cut costs and raise prices. Inflation was rising because milk was the life blood of the economy. Many companies laid off employees. These employees came to the stark realization that the politicians had hoodwinked them. The voices of the people demanding that milk production restrictions be lifted were not heard. The leadership’s countered that there was no way to milk their way out of the problem. They wanted to instead use some of the critical reserves that were set back by the government in case of a crisis. The House Leader continually demanded supply be released from the critical reserves but did not allow any voting on expanded milk production. She called opposition congressmen “handmaidens of the milk companies.” She was trying to save the planet of course. To suggest that more milk supply should be put into the market but at the same time hindering production at home seemed ludicrous. Their other answer was to encourage soythenal use. Many people wisely realized that a milk distribution plant had not been built in over 30 years. Also, foreign countries were erecting dairy farms a short distance away from the country’s borders. Why would the people be forced to buy milk from countries who disliked them? Was it to satisfy the disillusion of a small segment of the population? Could it be possible that letting capitalism and the free market’s brilliant minds come up with a way to solve this problem? No, because politicians and the government always know better. Forcing people to rely on alternatives that were not currently viable through cost and technology yet was premature. Many party leaders had never run a business in their lives or had to make difficult business decisions. Yet the very same people who were so unhappy with their government were considering the possibility of electing a president whose best accomplishment was that of a community activist? Big problems called for big solutions. In this time of important consequences, the Congress decided to go home on a five week vacation. The party leader felt it was more important to hawk her book which almost no one bought. It actually sold enough copies to be slightly behind the book, Watching Paint Dry. The leadership just wanted to buy time until they could have all the power and increase government power and regulation. Increasing the role of government seemed beyond the pale. Many times people dislike situations but are unwilling to do anything about them. Why would a citizen gripe about the current state of affairs but never think to contact their elected representative and voice their opinion? Is it possible that through situations such as these that a nation can become a nanny state? The very government who has a horrible track record of solving problems is then expected to solve bigger ones? Perhaps the new biggest oxymoron should be, “We’re the government, and we’re here to help.”