Audit Notes: Dark Ages, Mitt and Rupert, Chesapeake’s taxes

Stephen Moore on how "the greens" supposedly want to plunge America into darkness

The Wall Street Journal editorial page’s Stephen Moore uses the power outage in DC as a warning about what life would be like if “the greens” seize power.

Environmentalists, you see, aren’t just opposed to pollution and catastrophic climate effects from carbon emissions. According to Moore, they’re all but opposed to electricity, however clean:

Electrical power is the central nervous system of our modern economy and our 21st-century lifestyles, and living without it for a few days reminds us how vulnerable we are to being sent back to a pre-Industrial Age. Yet every initiative by green groups is focused on reducing our access to electrical power—although they never admit that explicitly.

This power outage was caused by a severe thunderstorm from Mother Nature, but I’m convinced that rolling brown outs are coming, thanks to the radical environmental movement that has taken hold of our body politic.

We’ve actually seen that kind of thing before, recall. More than a decade ago, the radicals plunging us into pre-Industrial Age darkness were caught on tape in California:

“Just cut ‘em off. They’re so fucked. They should just bring back fucking horses and carriages, fucking lamps, fucking kerosene lamps.”

That actually wasn’t a treehugger talking. It was an Enron crook manipulating California’s partially deregulated electricity markets into rolling blackouts a decade ago.

Here Moore talks, with no apparent irony, about how liberals think “things were better in the past than they are now”:

There’s one more teachable moment from our three days in the dark. So many Americans—spoon-fed by a “go green” education system and media—live under the delusion that things were better in the past than they are now. Sure the economy is bad, but all we had to do is live for 72 hours without AC, TV, a dishwasher, a hair dryer and Google to appreciate how much progress has been made in the past 20, 30, and 50 years. Today a larger percentage of poor people have access to air conditioning than the average middle-class family did in 1960.

Finally, he says that if fossil fuel-driven climate change turns out to be real, we can just burn more fossil fuel to power as-yet-unknown technology to cool things back down.

Perhaps a really, really Big Ass Fan?

(disclosure: My wife works in industrial energy efficiency)

— Speaking of the WSJ editorial board, The New York Times reports on the backstory behind Rupert Murdoch’s Twitter shots at Mitt Romney (emphasis mine):

They have met only a handful of times. Their lukewarm feelings toward each other stem from their encounter at a meeting of The Journal editorial board in 2007, when Mr. Romney visited to pitch himself as the most capable conservative candidate about two months before the Iowa caucuses.

Romney and Journal staff members who attended said that despite being deeply prepared and animated — particularly on his love for data crunching — Mr. Romney failed to connect with either Mr. Murdoch or The Journal’s editorial page editor, Paul A. Gigot. Instead of articulating a clear and consistent conservative philosophy, he dwelled on organizational charts and executive management, areas of expertise that made him a multimillionaire as the head of his private equity firm, Bain Capital.

At one point, Mr. Romney declared that “I would probably bring in McKinsey,” the management consulting firm, to help him set up his presidential cabinet, a comment that seemed to startle the editors and left Mr. Murdoch visibly taken aback.

Rupert’s not so fond of the consultant types. For that matter, few are.

— Bloomberg News has a good story on how taxpayers subsidize Chesapeake Energy’s profits and executive compensation. The beleaguered company has made $5.5 billion over its history but has paid out just $53 million in taxes. That’s a tax rate of less than 1 percent.

The company and other U.S. oil and gas producers can thank a century-old rule that allows them to postpone income taxes in recognition of the inherent risk of drilling wells that may turn out to be dry. The break may be outdated for companies such as Chesapeake, which, thanks to advances in technology, struck oil or gas in 99.6 percent of its wells last year…
When production from old wells outstrips the expense of drilling new ones, companies that postponed taxes will have to pay up. Chesapeake had a deferred income tax liability of $3.4 billion as of Dec. 31.

“If they’re a growing company, that deferral will get pushed out a long time,” said Michelle Hanlon, an accounting professor at the Massachusetts Institute of Technology and one of the authors of the 2007 study. “If you defer forever, it’s an exemption.”

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,