Fraters Libertas

Under The Radar

It seems hard to believe that you could describe a columnist who writes for the editorial page of the Wall Street Journal as underappreciated and underrated, but when it comes to Holman Jenkins I think the tags are appropriate. Despite that fact that on a weekly basis he turns out what I consider to be some of the sharpest commentary in the land for what is clearly the nation's finest newspaper, I rarely hear his name mentioned or see bloggers linking to his writing (possibly due to the Journal's on-line subscription requirement). Which just ain't right when you consider the gold that he's spinning. Here's a sample from his latest "Business World" offering in which he applies a few lessons in economics and a few more lashes to one of favorite whipping boys:

Sen. Byron Dorgan, who keeps himself deliberately uninformed about the workings of the private sector lest it cast him into doubt about his easy demagoguery, recently castigated the oil industry for "buying back stock, hoarding cash and drilling on Wall Street."

Now, that's what you call an attention getting opening.

He is one of several who've backed legislation to confiscate the industry's "windfall profits" if companies don't reinvest the money in new energy projects.

In fact, the capital markets are in charge of deciding where money is best invested, and oil companies are only in charge of doing what corporate governance reformers insist all companies should be doing -- being careful with their shareholders' money. That's why the six biggest oil companies, Mr. Dorgan's fury notwithstanding, are expected this year to allocate more than 60% of their profits to dividends and stock buybacks while reinvesting only about one-third in the oil business.

Mr. Dorgan perhaps hasn't noticed but Big Oil has become a pygmy. It accounts for less than 16% of the world's current production and less than 10% of the reserves that will supply our needs in the future. The industry doesn't reinvest more in energy development because, bluntly, most of the opportunities are off limits to it.

The real powers today are the Saudi state oil company, the Iranian state oil company, the Venezuelan state oil company, etc. Not only are governments in control of most of the world's oil and gas reserves, but increasingly they decline even to make use of the technical and management skills of Big Oil anymore.

His withering wit is non-discriminatory as well:

Consider the perfected idiocy of Sen. Maria Cantwell of Washington, who bought her Senate seat with a now-diminished dotcom fortune and has reason to worry about whether voters will find her worth re-electing. This undoubtedly explains her sudden and shrill emergence as the most unhinged of oil-industry bashers.

"Perfected idiocy." Beautiful.

Folks like Ms. Cantwell and Mr. Dorgan should look up from their polling data once in a while and take stock of the world, as statesmen are supposed to do. Their juvenile and myopic electioneering strategies are a big wet favor to the likes of Messrs. Putin and Ahmadinejad. Now is the time our leaders should be seeking to strengthen a profit-motivated global oil industry to balance the power of oil-controlling governments that don't have America's interests at heart.

Holman Jenkins appears Wednesdays in the Journal. Catch him if you can.