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Tuesday, May 6, 2008

The Disingenuous Oil Confrontation

Well, we know we are in the middle of campaign season. That's because politicians are stomping over each other to sound more tough with regards to oil, and the culprits they see for causing gasoline prices to go sky high. The problems embedded in the sky high gas prices can be traced back years and even decades, however politicians proclaim that they will now tackle the problem with seriousness. Of course, it goes without saying that 1) there is little if nothing anyone can do in the short term to reduce the price of gasoline 2) all politicians have sold us out in the long term to create this mess and 3) their so called tough talk will lead to little if any effect.

First, there was Hillary Clinton. On her widely heralded interview with Bill O'Reilly, she made three proposals: 1)suspend the gas tax for the summer 2) create a new windfall profits tax for oil companies and 3) confront OPEC.

Now, I am all for the suspension of the gas tax, but that's just because I hate most taxes. There is little if any effect that this will have on the price of gasoline. The windfall tax, on the other hand, will only put upward pressure on the price of gasoline. The windfall tax is nothing more than a political stunt. Everyone hates the oil companies, and by taxing them, it is yet another strategic offensive in Hillary's campaign of class warfare.

The most ludicrous proposal though is Hillary's proclamation that she will confront OPEC. Again, Hillary has picked an easy target. Everyone hates OPEC. I hate OPEC, and no doubt, every struggling American hates OPEC everytime they fill up. How, exactly, will she confront them, and what will she do? She says that she will complain to the WTO. I don't know exactly what that will do, however Hillary seems to be totally oblivious to the loose cannons that run OPEC. In this relationship, OPEC holds significantly more power than we do. We need their oil. Our economy can't survive without it, and the more it costs the better off they are. Any confrontation will subsequently lead to their lowering production even more and jacking up prices even more for oil. So, while this confrontation sounds nice, it is nothing more than campaign rhetoric.

Then, there is Barack Obama and the rest of the Democrats. He, like Clinton, is in favor of the windfall tax. Disingenuously, he is against the gas tax on economic principles. The rest of the Democrats cynically cry for the same mantra. This is the same group that wants to raise taxes during a recession and cut off trade at the same time. If they were of sound economic principles, they wouldn't be proposing these two ideas. Furthermore, the windfall tax has absolutely no roots in any sound economic principles. The bottom line is that the tax was proposed by McCain, and thus they found reasons to oppose it.

They have come up with an even more cynical political stunt. They want to create something called NOPEC. This bill would include OPEC under the Sherman Anti Trust Act. Let's nevermind the fact that the Sherman Anti Trust Act has absolutely no authority to completely foreign entities. What exactly is this supposed to accomplish? Will OPEC's oil not be allowed to enter the United States? Will they be cut off from trade? Again, the Legislators seem to forget who holds the power here. We cannot survive as a country without oil. We don't have enough on our own. We have to have their oil. Any confrontational maneuver can and will be met with actions that will only increase the price of oil exponentially.

Finally, every legislator on each side of the aisle is using a two new buzzwords: energy independent and alternative fuels. Of course, energy independence stops as soon as anyone suggests we actually drill for our own oil. Politicians like Barack Obama scream energy independence out of one side of their mouths, and vote against any bill to drill in places like ANWR with the other side of their mouths.

As far as so called "alternative fuels", the only tangible step in so called alternative fuels were mandates for increases in ethanol based fuels as part of last year's energy bill. Liberal estimates say that full optimization of ethanol would only power one in six cars. Yet, that didn't stop politicians from creating all sorts of mandates to force farmers to use their crop for ethanol. The effect on gasoline prices and energy independence has been negligible. What hasn't been negligible is the effect on food prices. By forcing farmers to grow more corn that would wind up in gasoline, that left less crop space for food that winds up in mouths. Simple laws of supply and demand thus forced food prices to sky rocket.

Thus, what we have is tough talk and nice sounding rhetoric. The masses may in fact believe that once and for all we have politicians that will seriously tackle the problems that have caused the mess we are in. Those folks would be wrong. The politician are long on rhetoric and ready to tell the folks that they will take on every boogeyman that has caused the price of oil to skyrocket. It's too bad that people don't realize that among the biggest boogeymen are the politicians themselves.

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