Posted on 07/26/2008 7:34:34 AM PDT by Delacon
The average American voter understands no more about the contributing factors of the current price of gasoline, than they do the falling value of their national currency. That makes them easy targets for political manipulation in a very important election year.
Most Americans kind of get this one, though they are often misled about the ups and downs of natural free market cycles and how much impact government has, or should have, on the matter.
In short, the cost for one gallon of gas (or one loaf of bread) is dramatically increased when there is only one gallon (or one loaf) and 100 people want it. Likewise in reverse, when 100 loaves of bread are about to go bad because nobody wants them, the price per loaf (or per gallon) will become very reasonable.
In a general sense, America does have a very real supply and demand problem. More than 70 percent of the oil America consumes is supplied by foreign sources, some of them with a very different agenda for our country than our own.
Our government has spent the last thirty years blocking domestic oil exploration, production and refining capacity. That led America from less than 40 percent dependence on foreign oil thirty years ago, to over seventy percent dependence upon foreign oil today. There is no world shortage, only a shortage of domestic product which results in the ability of foreign producers to hold America hostage over the proverbial oil barrel.
Speculating on world demand and the lack of American production, international financiers (futures traders) have bought and re-sold barrels of foreign oil eight or ten times before they reach the end destination of an American refinery. As a result, what costs Saudi Arabia $3.00 a barrel to extract from their corner of the earth reaches $140 a barrel by the time a U.S. refinery can buy it. This is the single largest reason for today’s price at the pumps.
But watch what happened the minute the U.S. President announced he was lifting the executive ban on domestic production… Speculation changed and so did crude prices.
That’s an easy question to answer. The same people still blocking domestic production today, congressional Democrats, at the beck and call of their eco-nut constituents hell-bent upon forcing Americans to wean themselves off of fossil fuels, no matter the devastation to the American economy.
As demonstrated by the recent drop in crude prices, the mere mention by President Bush, of opening up American production for the first time in thirty years caused the market to immediately react with a drop in crude prices. Prices dropped only marginally because investors know that Bush alone can not open up domestic production and congressional Democrats immediately promised to block his efforts.
But because even many congressional Democrats would support lifting the congressional ban on domestic production, current Democrat leadership in both houses will not allow the matter to come to the floor for a vote, where the measure would certainly pass.
At present, two individual American members of congress are responsible for holding America hostage to foreign oil, Speaker of the House Nancy Pelosi and Senator Harry Reid. Neither will allow a vote in their respective house because the measure would pass a floor vote.
It would pass a floor vote for two reasons.
1) The vast majority of Americans want the ban on domestic production lifted and no member of congress hoping to keep their seat could afford to vote against it; and
2) even the average Democrat is smart enough to know that America can not remain 70 percent reliant upon foreign energy and maintain national sovereignty and security at the same time.
Hiding beneath Al Gore’s Global Warming Scam and get-rich-quick Carbon Deposit scheme, key Democrats assert that “conservation is the ONLY solution.” They intend to “force” Americans to conserve by wrecking their economic ability to do anything else.
Despite growing public support for ending the ban, even in California, Democratic House Speaker Nancy Pelosi said she won’t allow a vote. “I have no plans to do so,” Pelosi said Thursday.
Calling the current high gas prices a “Bush failure,” Pelosi seeks to saddle the current President with the results of a thirty year old Democrat legislative blockade on domestic energy production. Did it work? For some it does.
As reported by the Wall Street Journal, “Sen. Reid faces pressure from senators who want to lift the offshore ban, including some in his own party who, at a minimum, favor more offshore production and opening up oil-shale development in the Midwest.”
According to the WSJ piece, “In the Senate, Majority Leader Harry Reid (D., Nev.) said he is open to a compromise that would encourage more domestic oil and gas production but wants to focus on strengthening oversight [government intrusion] of energy-futures markets, arguing that speculation has driven up crude prices.”
Of course, every Democrat “compromise” is laden with both “power grabs” and “pork barrel” spending that weighs every piece of Democrat legislation down to a crawl and subjects it to the potential veto.
The fact is, market speculation on foreign oil products may need restraints, but only because Democrats have placed Americans over a barrel by blocking domestic production for thirty years. In an otherwise “free market,” such measures would not be needed.
Democrats indeed have a “winning” energy strategy. But the prize is not cheaper – cleaner energy. It’s more Democrat power.
Democrats are to some degree beholden to their eco-nut sycophants, without whom they would not be in political power today. But they are even more beholden to their agenda of a Democratic Socialist America, as described by their leadership at the Democratic Socialists of America.
Americans would never intentionally vote for socialism, unless properly motivated to do so.
When Americans can no longer afford gas to get to work, or food at the grocery, or heat in their homes, they will welcome Democratic Socialism as the least inconvenient means of survival. Hungry Americans will vote for socialism via democratic process, never once even thinking about the individual freedoms and liberties they are trading in for a mouthful of food.
Democrats are blocking domestic oil production not for ecological purposes, but for the economic impact on the masses they need to support Democratic Socialism, in this and future election cycles.
Whatever it takes to break the free-spirit of the average American voter and force them to vote for socialism, more central power, is only a means justified by the ends.
That’s why Democrats continue their legislative blockade on American energy production and they will continue that blockade through the election cycle, even if gasoline reaches $10 a gallon. The higher the better frankly… More Democrat seats will be won this fall.
Their current demands that the President release supply from the emergency strategic reserve is nothing more than a political cover story aimed at misdirecting the attention of their idiot minions. Such a move only deepens the domestic supply shortage, making it even easier for foreign oil producers to hold America hostage going forward. It does nothing to break America free from foreign oil, short term or long term.
Whether dealing with international terrorists or modern Democratic Socialist in command and control of today’s DNC, voters must come to grips with the reality that both play by a different set of rules than most Americans are accustomed to.
The tenets of radical Islam and Democratic Socialism are the same in that neither is in the least concerned with the damage caused in pursuit of their agenda. Both seek to bring Americans to their knees by any means available.
And in the end, it won’t even matter which one America falls to… Either way, Americans will die or live in bondage.
And that’s the truth, whether you care to believe it or not.
Only the people can force Pelosi and Reid to allow a floor vote to free America from energy hostage… Be a part of the solution here - Drill Here. Drill Now. Pay Less. [4]
ping
What's a shame is that we don't have a candidate that represents a clear choice between good and evil but even at that, McCain represents a relatively positive choice in most of the important issues and certainly in the ONE BIG ISSUE.
Will the sheep be able to connect the dots??
That is the question.
It’s a campaign ploy.
Most years, it would have worked without a hitch. But Barack Hussein Obama, Jr., the charismatic, messianic Magic Negro, kind of spilled the beans a little early, when he mentioned that he did not mind the higher prices for motor fuel and other petroleum products, but that “they rose too quickly”.
This is the old tale of the frog in hot water. Try to drop a frog in a pan of water that is too hot, he will react by springing out immediately. But keep the frog in a pot of cool water, then heat the pot up gradually, and the frog never knows he should hop out, until it is too late.
As it is, WAY too many frogs have stayed in until too late, and do not know to jump out. Now.
Ah, it makes frog soup.
Not true..WRONG.. because "they " also want to shut down mining, lumber production, manufacturing, and even farming.. There are forces hidden under ecology (and other) blankets trying to gut Americas ability to PRODUCE.. weakening America.. And these are AMERICANS.. not foreigners.. Domestic economy terrorists..
Hat Tip: Michelle Malkin
Without a doubt, that old-school ideal has been ripped away over at least these issues (in no particular order):
1. The price of energy ripping away any semblance of disposable income amongst the masses.
2. Taxation levels -- same deal.
3. Illegal immigration. Gee, if there were even HALF as many illegals running amok in this country, how much easier would it be for American workers to find good jobs? And by the way, I'm gonna lump in the issue of business outsourcing with this one... both parties are highly guilty here.
4. Support for the military. Is there any place where the All-American men and women show themselves to be the best of our culture other than right here in our armed forces? Based on sheer heritage, it is the Democrats who should be the ones to embrace our fighting forces the most.
5. Social Security protection. In the history of the Democrat party, this issue is probably is the top five all-time of the laws that 'made' the Dem party. Yet they aren't lifting a finger to even admit that it will collapse within the next 2 decades.
On these pages, we all know why this is the case: the Dems are sold out to the forces in opposition to each of these issues (although I still frankly can't quite understand #3, even from their point of view).
My personal hope is that finally, maybe; the veil will be lifted and the average Joe will finally see that the Rats haven't been on their side since (at least) the days of JFK.
The GOP has become more and more part of a “Republicrat” party who's primary goal is continued incumbency and power rather than conservatism, defense of US national interests and doing what is right vs what is expedient.
Unless, incumbents fear that they will lose their seats because of their obstructionism, only sham laws will be passed rather than real, effective energy independence and development programs.
Inconsistent.
On Supply and Demand - What would reduce [gas] prices quicker - increase supply or decrease demand? Substitute another product [tomatoes] for [gas] and answer again.
Is it only gas that is increasing in price or is it many, many retail products?
Would making all items we import make them cheaper?
Would stop inflating money make prices decrease?
Why do the Democrats want the oil companies to make so much money?
See also the old Brock Yates book, “The War Against the Automobile:”
Dimocrats hate cars because cars exemplify freedom from government control, freedom to go where you want and do as you please.
Nothing annoys Liberals more than this.
(Plus they hate having their limousines stuck in plebeian traffic...)
Unfortunately, this is nonsense.
There IS a world shortage of supply relative to demand, which is why the world price is so high.
If America was presently getting 100% of its oil from domestic sources, we would still be paying the world price unless the government stepped in and placed price controls, export restrictions, or some other means of isolating the US oil market from the world oil price.
Otherwise, US oil producers, no dummies they, would sell their oil to overseas customers paying $140 as compared to domestic customers paying $50 or $100.
Where the oil is produced or consumed is irrelevant to the market price as long as there is a single market.
The answer remains exactly the same regardless of what word you put in the blank.
Tomatoes?
OK, ever wonder why the price of tomatoes drops during the summer?
That's right: increased supply.
Still wondering why so many retail products are increasing in price?
They arrive at the store by truck, right?
And the truck runs on (very expensive) Diesel fuel, right?
Connect another dot or two and call back...
The entire eco-nut movement is a socialist movement, forcing America deeper and deeper into democratic socialism via economically devastating eco policies...
The GOP needs to hit these envirowackos and hard. our society is an oil petroleum based society. until they come up with a better plan, DRILL, and DRILL some more.
or this nation will sink.
Hey, the line isn't answering.
| Unfortunately, this is nonsense.
It must suck to be a refinery, because you can only buy oil from guys who bought the oil from other guys, who bought the oil from other guys, marked up ten times for no reason. Any attempt by you to buy oil directly from the guy who drilled it, and hire your own ship to bring it in, is against, well, I don't know what it's against, but this author is telling us you can't do that. Which is BS. |
Ah...never had frog zoop.
Probably after the November elections I'll have some but first I'll be heading across to the other side of the mountains to avoid the effects of the blast.
I totally disagree. For one, any increase in supply will bring the price of oil down. Econ 101 dontcha know. Second, the current price of oil is artifically high even when you take in the current demand. That is because a few oil producing countries formed a cartel and set the price by limiting supply. If the US were able to up its supply of oil to the world market, then they could undercut other oil producers. Europe would be happy to buy its oil from the US even if the US was offering its oil for 1 dollar less per barrel. That would increase the US’s market share. Opec and others in turn would have to offer its oil for the same price to remain competitive. Then the US oil producers would drop the price again by increasing supply. And on and on.
“What would reduce [gas] prices quicker - increase supply or decrease demand?”
ANSWER: Both increased supply and decreased demand impact prices. However, since the current high gas prices are largely due to speculation on future consumption by a nation 70% dependent upon foreign product, opening domestic production would have both the fastest and best long-term effect on retail pricing by ending the speculation of a domestic shortage and continued foreign dependence.
“Is it only gas that is increasing in price or is it many, many retail products?”
ANSWER: No, RETAIL pricing are climbing as the value of the dollar falls. They are climbing even faster at the moment due to high fuel (TRANSPORT) costs.
“Would making all items we import make them cheaper?”
ANSWER: No...Because the cost of manufacturing products in the U.S. is much higher than the combined cost of manufacturing and importing them from abroad.
“Would stop inflating money make prices decrease?”
ANSWER: In concept, yes. Deflating the dollar also plays a part in current rising prices. But it depends upon how we stop the merry-go-round before we step off. Just jumping off could be deadly.
“Why do the Democrats want the oil companies to make so much money?”
ANSWER: They don't. They want the federal government to strip oil companies of their private industry and their earnings by “nationalizing” energy. But it isn't U.S. Oil Co's who is gouging consumers at the pumps. They have maintained their margins at the pumps throughout, which are much smaller (a fraction) than the federal tax portion at the pumps.
Your questions seem very confused and intended to misdirect.
I assume you are for nationalized energy...?
Democrats love high gas prices because they damage the economy.
A bad economy is always good news for Democrats.
When the economy tanks and people lose their jobs, homes, and savings they become dependent on government handouts and eventually become addicted to government. And just as drug addicts keep going back to their dealers for a fix, government addicts likewise keep going back to THEIR dealers. That would be the Democrat politicians. A tanking economy means more government addicts and therefore more votes for THEM.
Sabotaging the economy is job #1. It’s what the Democrats strive for.
This ain’t rocket surgery.....
Absolutely. If there is increased supply, whether from the US or elsewhere, then the price will come down.
However, as long as we have a global market, the world price (and the US price) will not be significantly affected by whether a given barrel of oil is produced in Texas, Iraq or Nigeria.
I agree that the present world price is affected by the cartel. However, from a market price standpoint, it doesn’t matter whether the supply is restricted by a lack of oil production or by a government’s decision not to produce or market that oil. Supply is supply.
I support drilling here. I’m just pointing out that in a global market, oil is fungible. The price will be essentially the same everywhere, absent government controls.
And if the government artificially restricted the price here, production here would drop. Supply and demand again.
Which is precisely why we need TERM LIMITS, NOW AND FOREVER (even if it requires a constitutional amendment or mass protests to achieve).
Nope. I am for the national energy policy that has been promised for 30 years by both Republican and Democrat Presidents. Election year finger-in-the-dike gimmicks need not apply.
Sadly, you are dead wrong...
You confuse (manipulated) “ready supply” with “world supply.”
There is NO “world shortage.” There IS a (manipulated) shortage of “ready supply.” America alone has oil deposits that would supply U.S. needs for the next 200 years or more. But the supply is not “ready” for consumption (market) due to thirty years of legislative blockades.
U.S. Oil companies have been between .06 and .08 cents per gallon margin for more than 40 years now. It makes no difference to them whether that margin comes from U.S. consumers or China.
Oil profits are up simply because consumption is up and expenses are down due to no new exploration or investment in new refining capacity.
Your comments demonstrate that you know nothing at all about the subject. Sadly, this is true for most Americans.
You should study the topic before attacking a column which happens to be dead on! Your comments only help the left further confuse the electorate.
AMEN!
“tday america, tomorrow ze brave new vorlt of international socialism...”
bulls eye.
Hopefully, with the current low popularity of the House and the Senate, we’ll see some good changes in ‘08 election. Unless the RATs change the rules, I don’t think even haters of Bush will let them continue to jack up our prices, and the gorebull warming smokescreen is rapidly losing its teeth.
Prove it’s B.S.
If it is as you say, B.S. - prove it!
Research and you will find that a barrel of crude is currently costing Saudi $3.00 out of the ground.
Then research the financial futures trading markets and how many times those barrels are bought and sold (on paper) before they reach final destination at a refinery... 8 to 10 times.
This is why congress is pursuing legislation to put curbs on how much “speculation” trading can continue on oil.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aI3KfJ0v2akE&refer=home
The author tells is exactly right... Too bad you are willing to comment before researching his claims. He’s right and you are horribly ill-informed.
In the future, please research first and comment second. You are contributing to ignorance.
That’s putting a fine point on it!
Well said!
Such a policy would look like what?
The Democrats know their audience. Isn't there something about never underestimating the general populations stupidity?
Will the sheep be able to connect the dots??
That is the question.
How can sheep get smart? It isn't in their nature.
The real question is what should we do. Democracy is broken.
Ready supply is all that is available now. Oil that could theoretically be available in 2 years or 20 if we start working on it right now is irrelevant this week. We can't burn theoretical oil.
All authorities are in agreement that oil production has been below demand for several years now. It doesn't matter whether supply is below demand for technical reasons or political reasons, what matters is that actual oil is not being produced in sufficient quantity to keep up with the demand.
Oil profits are up simply because consumption is up and expenses are down due to no new exploration or investment in new refining capacity.
You do realize that this is one of the liberals biggest reasons for attacking the oil industry, that they are making no effort to explore for new oil because they're making so much money without doing so? If this were true, which I doubt, government intervention in the market might be justified.
Marx was right. “Democracy is the road to socialism.”
Jefferson was right too... “A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.”
Return to “republican” principles or be vanquished by “democracy.”
The masses of ignorants are running the asylum...
You are correct, but and this is a big but, the problem is that the House of Saud can simply pump enough oil to flood the market and put any other oil producers out of business.
It is a manipulated market and I don't have a solution.
This could be the most backwards ill-informed statement I have ever read on the subject...
“You do realize that this is one of the liberals biggest reasons for attacking the oil industry, that they are making no effort to explore for new oil because they’re making so much money without doing so?”
Do you mean “one of Democrats biggest lies?” If not, if you mean “reason,” you couldn’t be more wrong.
The oil industry has been BEGGING congress to allow for new exploration and refining capacity for decades now and Democrats have blocked them at every turn, just as they are doing today. It is not possible for you to have this more backwards wrong than you have it here...
“If this were true, which I doubt, government intervention in the market might be justified.”
Obviously, it’s not true. They want control of another private cash cow. Only their useful idiots have missed this obvious message.
Are you suggesting that it doesn’t matter “where” the oil production comes from? Domestic or foreign, so long as it comes?
..and commercial fishing
Sad truth.
Thanks for posting.
Econ 101 is generally a macroeconomics course which addresses a national economy where the buyers and sellers are operating under the same rules.
International Economics is a different matter and few international markets meet the macroeconomic definition of a free market due to state owned producers, government subsidies and other interventions into the market.
Trying to apply Econ 101 to international situations might be one of the reasons, or the main reason, we find ourselves in such a predicament with energy costs and international trade deficits.
And, no, the Dems. are not solely responsible for the current energy price crunch. They are more responsible, and they are the most responsible for preventing any corrective action now, but the following is true, and has been linked several times:
1. The first offshore drilling moratoriums were put in place under Reagan, attached to Interior Department spending bills. Over several years, they covered all of California, Florida and New England, with the support of a number of Republicans, especially those from Florida and California. Perhaps Reagan did not want this, but he also did not use his veto power to fight it.
2. GHWB singed an executive order that extended the existing offshore moratoriums and added more states to it. Congress also approved these.
3. Clinton just continued the existing moratoriums, though he did put some interior land off limits to coal mining, and maybe some other actions.
4. W. Bush continued all the existing moratoriums for seven and one-half years, and only very recently took steps toward lifting them. And, he and Jeb got together to reaffirm the moratoriums off Florida, to help Jeb’s re-election bid.
5. The Republican Congress did approve drilling in ANWR and Clinton vetoed it. And they passed it again recently, but the Dems. in Congress managed to kill it.
6. But the only things Republicans can really claim over the past thirty years is that they tried to make drilling in ANWR legal. All these offshore drilling moratoriums and bans, Republican presidents signed and Congress gave support to all of them, extended them, and did nothing to reverse them until this summer, 2008.
7. And, the ONLY thing John McCain has committed to is to life offshore bans IF THE STATES AGREE..Not much. He still opposes ANWR drilling, though he says he might rethink it. And, he is proposing a %5,000 tax credit for people who buy an electric car.
8. If McCain has made some specific new proposals, maybe someone can provide links.
Not sure what good it does to continue perpetuating myths about the past 30 years of energy policy, or the total lack of an energy policy, for which the Dems. are more responsible, but for which the Republicans are also plenty responsible.
You would think by now there would be enough of a snit whenever they goof this. What is a beck? At the beck and call? No.
Its at the beckon call
Now dont do that again.
Second, speculators are both long and short in various markets that they trade in - generally balancing out, or going broke by betting wrong.
Try it, use Monopoly Money - bet long or short oil? Let us know how it works out.
Third, eliminate the moderating influence of speculation in any market, and you get much wider swings in the instant market prices of the underlying commodity.
The only thing that affected oil prices in the past few weeks (IMHO) was Bush's pronouncement removing restrictions on offshore drilling - which any participant in the oil futures market recognizes as at least a modest signal that the unbelievably foolish policy of the US to not exploit its natural resources may be about to change. More supply - lower price.
Not this American. I'll be taking up arms, ready to die for my freedoms like my forefathers did.
An excellent overall post.
My latest theory is that opening up drilling would cause an immediate price fall. The markets would know that America’s political tipping point had been reached, and there would be no stopping the collapse of the bubble.
The Dems CAN NOT allow this to happen. It would alter the election lock they planned on. They must keep this away from a floor vote, at all costs.
I'm saying it doesn't matter to the price of the oil, as long as there is a single market.
It matters greatly with regard to our national security and balance of payments, but not to the price the customer pays at the pump or to the utility company.
Unless you think American producers would be willing to sell below the world market price because the buyer is an American. If they were, of course, most of the buyers would promptly resell the oil at the market price.
Well done...
Now, having muddied the water again by throwing spineless Republicans under the same bus with anti-American Democratic Socialists, tell everyone what to do in this election...
No, it’s not me who misunderstands, it’s democrats...
“First off, restricting futures trading in the US will only increase it in the international market.”
TRUE - Which is why I don’t support this move by Democrats.
“Second, speculators are both long and short in various markets that they trade in - generally balancing out, or going broke by betting wrong.”
HALF-TRUE - At the moment, “short” and that’s the issue.
“Third, eliminate the moderating influence of speculation in any market, and you get much wider swings in the instant market prices of the underlying commodity.”
TRUE - And again, why I do not support Democrats on the topic.
“The only thing that affected oil prices in the past few weeks (IMHO) was Bush’s pronouncement removing restrictions on offshore drilling - which any participant in the oil futures market recognizes as at least a modest signal that the unbelievably foolish policy of the US to not exploit its natural resources may be about to change. More supply - lower price.”
EXACTLY!
Now, what did I misunderstand?
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The article is full of nonsense. I especially liked this one: