“The point is, ladies and gentleman, that greed — for lack of a better word — is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms — greed for life, for money, for love, knowledge — has marked the upward surge of mankind. And greed — you mark my words — will not only save Teldar Paper, but that other malfunctioning corporation called the USA.”

Sound familiar? It’s the speech made famous by Gordon Gekko (played BRILLIANTLY by Michael Douglas in Oliver Stone’s “Wall Street”) as he addressed the stockholders of Teldar Paper.

Just what was Gordon getting at? Let’s ask him. “Well, ladies and gentlemen, we’re not here to indulge in fantasy, but in political and economic reality.”

And that’s just what we’d like to do. We’d like to toss aside what makes us feel good so we can focus on a hard truth.

Broadly, we’re advocating against the confiscation of private property.

Specifically, we’re raging against Hillary Clinton’s desire to tax Big Oil to fund Big Government.

(Editor’s Note: Before you roll your eyes, this is not a political rant and we’re certainly not bashing Democrats to benefit Republicans. As our friends and clients know, we’re Libertarian. We’re equal opportunity -– we hate both parties! OK, we don’t hate them but we’re not writing this piece for anyone’s benefit. We’re arguing purely from an economic perspective. Whew — we can get down from our soap box now.)

Here’s what “Hugo Chavez in a pants suit” (credit to P.J. O’Rourke — author of “On the Wealth of Nations” — for that gem) had to say in a May 23, 2006 address to the National Press Club:

“I plan to introduce legislation to create a strategic energy fund to be paid for by an excess profits tax on big oil companies which earned a combined $113 billion in profits last year. The money raised will pay for new research initiatives for wind, solar and other alternative energy resources.”

What’s wrong with profits? ExxonMobil recently reported the largest annual profit ever by a U.S. company –- a whopping $39.5 billion.

Look behind the headline and you’ll see that’s about a 10% margin on sales of $377.5 billion. The banking industry has a profit margin that’s nearly double. Shouldn’t we be going after them for a windfall profits tax? Intel has margins north of 50%. Where’s the righteous indignation?

Profits aren’t something to fear or to be scorned. Profits are the foundation of capitalism. They support our economy by providing businesses with the resources to grow through increased production and the hiring of additional workers. It’s why we have jobs and how we earn our incomes to spend on our needs and wants.

Look, Hillary, we’re with you. You’ll get no arguments from us. You want to reduce our dependence on foreign oil? Fine. You want to cut off funding to nations that hate us? Fine. You want to help the environment? Fine. You want to do it at the expense of violating private property rights? No way!

Markets work – period. Interference of any kind (Big Government in this case) creates market externalities. No way around that one.

Inefficient markets won’t work. It’s as simple as that. Confiscating private property – that is, absconding with the profits of shareholders – isn’t part of the solution. Taxing Big Oil isn’t part of the solution.

Sit through any beginning Macroeconomics class and one of the first things you’ll learn is that private property and the right to do with it as the owner sees fit are fundamental. There’s just no way around it.

How so? Let’s consider something near and dear to all of us. Think about housing.

The reason we’re willing to pay $800,000 for a home is because we can exclude others from living there. We can put up 10 billion holiday lights. We can mow a swear word into the lawn. Whatever makes us happy.

This is where the home gets its value. Would we really be willing to spend this kind of money on a home if we couldn’t stop anyone else from living there? Would we put ourselves out of pocket hundreds of thousands of dollars if we couldn’t use or do with our property as we see fit? No way!

And that’s where the oil tax is headed. Tell a company they can’t earn profits above a certain point and guess what they’ll do. They’ll explore, extract and refine just enough oil to maximize profits and avoid Hillary’s tax. The result is no funding for her Big Government research initiative and, oh by the way, less oil coming out of the ground.

It’s back to Econ 101 at this point. The guiding function of prices (that’s Adam Smith’s “Invisible Hand” at work) serves its market based purpose of incenting more supply when the market allows for higher prices. If government says profits have to be capped, we get less oil from the ground and an overall lower supply. Less supply means higher prices at the pump and for heating our homes. We’re complaining with $2.25/gallon gas – what are we going to do when it goes to $4 or $5?

This can’t be what Hillary has in mind. Is it that she doesn’t get it?

Hardly. She’s quite intelligent. We think there’s a far more nefarious plan afoot. We think it’s all about greed.

It’s not greed for life or money or love or knowledge the way Gordon Gekko described. It’s greed for power. Look no further than Hillary’s attack on health care back in 1993. History does repeat itself if we’re not careful.

We’re not bashing Hillary. We just hate the idea of a solution that isn’t market-based and we abhor the confiscation of private property rights.

This greed thing is inherently neutral. It can be used for ‘good’ or ‘evil’. Gordon Gekko’s greed was one thing. Hillary’s greed is for political power…and at the expense of the American citizen, taxpayer and stockholder. That’s shameful.

Power is a zero sum game. It cannot be created nor destroyed. When Hillary talks of taxing Big Oil to fund Big Government, she’s talking about shifting the balance of power from private enterprise to ‘the people’ – only she’ll be running the show. It’s greed for all the wrong reasons.

Adam Smith can’t help from beyond the grave. Gordon Gekko can’t help from the movie screen. But we can help by thinking not about political parties, headlines or rhetoric when we step into the voting booths in 2008. We can help by remembering that market-based solutions work, that private property rights are why we fought with England for our independence and that no amount of rhetoric can change these facts.

Greed is neutral. Hillary’s greed is at our expense. Gordon Gekko’s greed is one of free market capitalism. Remember, when used properly, greed isn’t such a bad thing. In fact, “Greed is right. Greed works…And greed — you mark my words — will not only save Teldar Paper, but that other malfunctioning corporation called the USA.”