BBC: Biased Brit Correspondent

Christine Lawrence at Newsbusters catches this doozy, with the BBC reporter standing next to a big rig:

Many Americans drive private cars not much smaller than this truck, and the risk is that they use their tax rebate simply to buy fuel, boosting the profits of the oil companies but doing little or nothing for the wider American economy.

For the record, I drive a KIA Optima with a hot little 2.7-liter V-6 that gets about 23 miles per gallon.

The suggestion that "many" American commuters travel in vehicles "not much smaller than" a semi tractor is so spectacularly wrong that one hardly knows where to begin. A Cadillac Escalade gets about 18 mpg on the highway; a diesel semi rig gets about 6 mpg.

Beyond that, the BBC reporter is a complete economic ignoramus. What in God's green earth do "the profits of the oil companies" have to do with the intended stimulus effect of the rebate? If we are to be concerned about what uses taxpayers will make of their rebates, what about the profits of, inter alia, whiskey distilleries and big-screen TV dealers?

What about this "wider economy" to which the BBC reporter refers? It's people buying and selling goods and services. If I get a rebate check of $2,000, then I'll have an extra $2,000 available to buy such goods and services.

Gasoline may be part of the extra goods and services I get for that extra $2,000, but please tell me, why do I buy gasoline? To travel to work? To go on vacation? To go to the shopping mall? Each of those activities -- work, vacation, shopping -- involves multiple economic transactions, part of the "wider economy."

So if the tax rebate enables consumers to buy more gas, then it will indeed do something for the "wider economy," no matter what the BBC says.

I'm almost tempted to give a mini-lecture about the importance of transportation to economic growth, but instead will just say a few things about capital and profit, given the BBC reporter's evident obsession with oil company profits.

Profit is an incentive to investment.

Please read that sentence until you understand it. Investment is essential to economic growth, and nobody would invest without the hope of profit.

• Exxon-Mobil's net 2007 profit margin: 10%.
• Starbucks' net 2007 profit margin: 7.1%.

Which is more important to the "wider economy" -- petroleum production and distribution, or mocha lattes?

• Exxon-Mobil has 106,400 employees worldwide.
• Starbucks has 194,807 employees worldwide.

So Starbucks has 83% more employees than Exxon-Mobil. Given that Exxon-Mobil is No. 2 on the Fortune 500 list and Starbucks is No. 277, what does this tell you about differences in the economic output of the average employee of the two companies?

Exxon is the more productive enterprise; its product is more valuable; its capital investment is larger. It is, therefore, more profitable -- and I certainly hope it continues to be profitable. If Exxon ever loses money, we're doomed.

The world's largest petroleum refiner is only clearing 10 cents on the dollar of its revenues, which scarcely justifies the demonization they get from the economic ignoramuses in the media and on Capitol Hill.

Microsoft's net profit margin is 30.4%! Since I'm using Windows software on my computer, does that make me the victim of "price-gouging" by Microsoft? Do you hear Nancy Pelosi, Hillary Clinton or Barack Obama denouncing Bill Gates for "profiteering" at the expense of hard-working middle-class computer users? Are Bill Gates' salary and his company's profits denounced as "obscene"?

The BBC reporter's fixation on "the profits of the oil companies" -- which he juxtaposes against "the wider economy" -- exposes him as an economic ignoramus.