Following Joe Biden's threat to take out his powerless fury at OPEC+ head Saudi Arabia on US producers by slapping them with a windfall tax, this morning we already observed a battle royale between Hunter Biden Consulting, LLC (surely the titanic brain trust behind the White House's ingenious scheme) and Jeff Epstein pal #1, Larry Summers (and yes, we can't believe that we actually agree with the former for once).
If it is a fairness argument, I don’t quite follow the logic since even with the windfalls Exxon has underperformed the overall market over the last 5 years.— Lawrence H. Summers (@LHSummers) November 1, 2022
Cartoonish Lolita Express frequent flyers aside, here is Morgan Stanley putting to bed any speculation that the latest idiocy of the White House has any hope of passing:
Windfall tax unlikely, could have negative impacts on investment. In a speech this evening, President Biden encouraged Congress to consider a windfall tax on "excess profits" in response to strong 3Q earnings from large energy companies last week. Importantly, any such tax initiative would require legislation and, in our view, would struggle to get the necessary votes (60 in the Senate as stand-alone legislation, or 50 as part of budget reconciliation). Moreover, a tax on profits could further constrain much needed investment in oil & gas at a time when spending and production are still recovering from the Covid-19 pandemic.
So if it has no chance of passing why push so hard a week before the election in hopes of appeasing the socialist fringe of the democrat party? Here's your answer.