Want Cheaper Gas and Oil? End the Damned Wars!
By Dave Lindorff
Americans are in a panic over rising gas and heating oil prices, and with reason. For months, the price of a barrel of crude oil has been rising steadily, hitting a record $127 yesterday.
Analysts keep getting trotted out on TV and in print, attributing the dramatic price rise to everything from “peak oil”—the idea that producing countries have reached their peak of productive capacity, and that the only direction for oil supplies looking forward is down, while demand continues to rise—to increasing demand in China and India, to supply bottlenecks, to specific news events, like a pipeline break in Nigeria, or a closed refinery in California.
Politicians, like Republican presidential candidate John McCain and Democratic presidential candidate Hillary Clinton, have called for a two-month moratorium on federal gas taxes, but with taxes running at something on the order of 18 cents a gallon, this is not going to do much to bring prices down—in fact it might do nothing, since retailers would be free to just raise prices to match the tax break, and pocket the profits.
One analyst, economist Ismael Hussein-Zadeh, a professor of economics at Drake University in Des Moines, Iowa, has a different explanation for the price rise, and American motorists and homeowners should pay close attention.
“Oil prices have gone from the mid $20 range in the fall of 2002 to $127 yesterday—a rise of $100/barrel in just over five years,” he says. “And the bulk of that increase can be attributed to the US wars in Iraq and Afghanistan, and to the threats of war against Iran.”
Hussein-Zadeh’s analysis looks at a number of ways that the Bush/Cheney wars have contributed to rising oil prices. Chief among these are two factors: the threat to supplies, particularly from the Persian Gulf region from which 20 percent of the world’s oil supplies come, and a falling dollar, because oil is priced in dollars, and as it loses value, oil producing countries raise their prices to compensate.
In an article titled Worried About the Price of Gas? End US Wars, Hussein-Zadeh writes, “Soon after the invasions of Afghanistan and Iraq the price of oil began to escalate in tandem with the escalation of war and political turbulence in the Middle East.” Furthermore, he says, “Anytime there is a renewed US military threat against Iran, fuel prices move up several notches.” If the US were to actually make good on Bush’s and Cheney’s threats to attack Iran, in Hussein-Zadeh’s view “the sky would be the limit” to oil prices, with $200/barrel being a starting point.
The dollar’s fall, too, is significantly a result of the wars—particularly the Iraq War, he says. That war has been costing the US $200 billion a year, all in borrowed funds. That in itself is a huge hole that has to be funded by borrowing from China, Japan, Saudi Arabia and other nations. But as Nobel economist Joseph Stiglitz has pointed out, the true cost of the Iraq War, when interest on debt, health costs of injured veterans and other long-term costs are factored in, is more like $3 trillion and rising. And when currency speculators and traders—the ones who really set the value of the dollar—make their bets, they’re looking at that bigger number, not the little one.
Moreover, it’s not just oil that has been driven up in price because of the war. As energy costs have gone up, so has the cost of food, in no small part because most fertilizer is oil-based, and because transportation costs are also largely a reflection of oil prices. As well, to the extent that American’s food is imported, they are paying in shrinking dollars, whose value is being driven down because of the war.
Hussein-Zadeh says the Bush/Cheney administration and its neoconservative war promoters have worked hard to offer other more benign explanations for the crippling rise in energy prices, and food prices. As he puts it:
Neoconservative forces in and around the Bush administration and beneficiaries of war dividends—wishing to deflect attention away from war as the main culprit for the skyrocketing energy prices—tend to blame secondary or marginally relevant factors: OPEC, China and India for their increased demand for energy, or supply-demand imbalances in global markets. Whatever the contributory role of these factors, the fact remains that the current oil price hikes started with the beginning of the Bush administration’s wars against Iraq and Afghanistan. Furthermore, a closer examination of these factors reveals that their roles in the current price inflation of oil have been negligible.
Common sense bears him out here. China’s and India’s economies have indeed been growing rapidly, and with them, demand for oil, but over the past five years, oil prices have risen 400%, and the same cannot be said for demand. Even if Chinese and Indian growth figures of 7-9 percent per year were accurate (and there is reason to believe they are grossly inflated), that at best would amount to perhaps a 50% increase in economic activity over five years. In fact, during this time more efficient energy use in the developed countries has largely offset much of the increasing demand for oil in China and India, and even in China and India, much of the energy growth has involved replacing inefficient vehicles and power plants with more efficient ones, so oil consumption isn’t rising in lock step with economic growth.
The answer then, to rising oil prices, is obvious then. It is not some silly two-month moratorium on federal taxes—what Sen. McCain referred to, in a candid moment, as a “little gift” to American vacationers. Nor is it opening up the Artic refuge to drilling—a move that would take years to lead to any significant new supply, and which in any case would have minimal impact on overall supply, or on prices. Nor is it opening up the Strategic Oil Reserve—another drop in the barrel. Nor is it boycotting Exxon/Mobil. Nor is it hammering OPEC to boost production—something they have already done. No, it is much simpler. As Hussein-Zadeh so eloquently puts it:
The political implications of this discussion are clear: to bring down the prices of fuel and food requires bringing home the troops. By lowering the energy costs of production and transportation this will help save our own and many other economies from the plagues of inflation and stagnation. It will bring relief to hundreds of millions worldwide who are burdened by crippling energy bills and the crushing costs of feeding their families.
Got that people? If you want to see gasoline drop back below $3.89/gal, if you want to cut your food bills, if you want to see people in the developing world having enough to eat, get Congress to end the war! Meanwhile, each time you pull the trigger on that gas pump, think of the liquid that's running into your tank, and the money that's flowing out of your wallet, as blood, because that's what it all comes down to.
It’s that simple.
______________
DAVE LINDORFF is a Philadelphia-based journalist. His latest book is "The Case for Impeachment" (St. Martin's Press, 2006 and now available in paperback edition). His work is available at www.thiscantbehappening.net
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high gas prices solution
Go to c-span.org and see the Energy commerce talk about the speculators who are the problem with the rising gas prices and how it can be fixed. You won't believe how it can be done in 30 days.
I can't believe it isn't on the news today, as it was on last night Mon june 23rd.
You won't believe what you hear from Micheal Masters and Fadel Gheit.
Take the time to watch them because the information is so easy to understand.
Have a great day after you watch the tape. I guarantee that you will and then someone tell Obama about it too.
where are our assets ?
What about the real estate that is owned by large franchises, companies and other corporations ? For example McDonald's , Burger king , Coca cola , Pepsi , etc. If we have large portions of our money invested overseas or across borders where does the money go? If much of their investments is in acquisition of real property in foreign countries how does the money circulate back in our own economy if billions of or perhaps trillions of dollars in real property are vested in those countries how does this translate into helping our economy? all it does is line the pockets of the rich and create a stagnant economy over here , for example if the U.K. or China has so many American franchises running over there and the corporations are the owners of the real property like Wal-Mart and or a McDonald's spend billions in establishing these businesses , they are subject to taxes on the monetary value of such properties but the actual properties value is of no existence in our country in other words there is technically no real assets for the U.S. Government to attach itself within its budget for the U.S. economy. Foreign countries get paid property taxes etc. and get paid normally as if it were a home made business because the asset is an asset of their country , so instead of the franchises and corporation bettering our countries infrastructure it worsens it by selling us out carrying the assets of our infrastructure with them overseas . All the money in real property which is spent by large corporations is spent liberally . If millions and or billions of acres of land are owned overseas by franchisers and corporation , those assets and the money spent on those assets create a negative cash flow away from our economy because title and deeds to properties mean that the money used for these purchases sit within the foreign countries banks and is used to stimulate their economy , If I were to make a land purchase in Canada of 1 billion dollars and did next to nothing with it or even if I started a business and the income I generate from a 1 billion dollar purchase is insignificant , then the U.S. lost 1 billion dollars of their economy and has to rely upon taxation to compensate for my purchase and hope that I am extremely productive generating income , the Canadian economy was well stimulated , I am now their asset , as well as the U.S Governments. And if foreign economies take a fall and American corporations cannot sell back the property then it is at a further loss through devaluation or bankruptcy . If we asset ourselves to foreign countries we take a big gamble in collapsing theirs as well , we may show them economic boosts but once the bread and butter is gone , starvation hits their table as well. But this is just one third of our economic issues......
When we talk about our economy we should be talking about assets and infrastructure , the things that back up the actual value of our dollar , the material worth of the actual real properties of the U.S.
Do we own the land in Iraq , NO ! So where are the assets of Oil ? They are the military , The army , The air-force , the tankers etc. there is no real property for Iraqi Oil ! So exactly How much money comes from where if many of our asset to our economy are overseas ? where does the U.S. find the money to purchase the oil from Iraq ? Through McDonald's ? Through Coca-Cola etc. ? No !
Do Oil companies own the rights to the military , the army , the air-force , do they reserve the right as a corporation to protect their interest over oil to facilitate profits ? No! Since when does our government give corporations military presence in conducting business ? Never !
So if we are at war protecting our oil interest , remembering the Kuwait Oil fields , dessert storm ? Why then do oil corporation reserve the rights of profits ? Is the oil of the U.S Government and not the Oil corporations ? We do not fight for the rights for Exxon to have economic fun gathering profits at the cost of our men and women who serve our country ? Or the oil companies to rights as fuel dictators gauging when ever they feel they need more money !
Our oil is paid for by the men and woman who serve and protect our fuel interest , paid for by our taxes our economy , not by employees of corporations , our men and women serve to make sure they can do their job obtaining the oil safely , our taxes do not pay for Exxon employees to be over there drilling but to be largely stationed to protect the workers who are doing the job extracting and delivering resources , which should and IMO is 100% a Government operation , otherwise why would we want to protect a handful of idiots drilling in countries that will shoot them dead ? Oil companies have contracts with countries like Iraq , The Government Does Not ! The Government just oversees the Oil Companies interest. This Nations oil reserve is purchased from corporations and is not acquired on behalf of itself. Otherwise Oil would be much cheaper !
This is why we cannot legitimately call this a war for oil !
Here is how large Oil corporation work out their Taxes with the Government !
They keep our country filled with just so much in oil reserve in exchange for partial tax payment at any one given time , 300 million barrels or so for example , Their taxes are always on the "Tap" (literally) When the fiscal year rolls around president Bush is always happy to spend that reserve , meaning if he rolls out our reserve as aid for low income families or foreign aid and expends the reserve he is in fact creating a loophole that allows big oil companies to strategically refill our reserve by use of this "tap" and big oil companies pay next to no taxes in actual money , only through acquisition of oil goods , this tap allows no monetary exchange , just fancy paperwork evading actual taxes. I wish I could pay my taxes with the goods I acquire ! do you think the government gets an unlimited supply of Coca-Cola for payment of taxes, I highly doubt it! Matter of fact these oil companies may even be getting away with total tax payment by filling the government reserve ! Now the Government can actually start making some money , by reselling the reserves at a 100% profit to low income families etc. This is the way Big Oil companies say thank you for serving us !
Because Big oil is not owned by Government , people like Bush and Cheney are loving every moment of it , because even they know the Government at any one time can seize oil companies for the sole purpose of regulation . The second the Government were to seize the oil companies is the very same second they no longer make record profits and their money tap would dry instantaneously and come to a screeching halt! What better way to dictate the biggest industry in the world , get paid to be president and vice president , control the resources control the profits !
If the Oil was Government owned and regulated at the current tax rate people would have probably already paid for their fuel needs 100 times over since the beginning of the bush administration over the last 8 years because all the profits were sucked up by oil corporation and not the Government. Give the Government the Purse of the big oil companies and you watch how much oil will drop and how much of our economy is mislead by big oil !
With Big oil "Money" is the asset the government cannot account for because there is no real property behind the big oil profits , Exxon and Big oil companies do not own the land , they purchase product , so billions of dollars in product is being spent with no guarantee that this money will ever make it back into our economy ! Foreign oil should not be exclusive to big oil companies it should be exclusive to government! What does big oil have as assets if oil production were to stop ? Nothing , just a few tankers that they might as well see sink to the bottom of the ocean ! The walk away billionaires without a care in the world because they are not responsible for producing an asset , something the government would perhaps look for to ensure that the money comes back and flows through our economy , like production plants, facilities , jobs , land here in the U.S. to keep the money recycled. If I purchase and cut trees for resale and I do not own the land the only asset I have is what I have paid for the trees and the potential price of demand for them ! So what is the demand , what is our competition ? If we were talking about a limited resource then we would be put into a state of rationing and the government would step in for sure , So we know this is a B.S. answer , If I was the only one with cut trees for sale and they were the last of the source then you can imagine how treasured my trees would become , they would be far more worth their weight in gold!
Milk is priced equally to gas and oil , I see more milk or dairy consumed than gas and oil , does this mean that dairy cows are dwindling in numbers ? Shouldn't we go and use strict military procedures and defend our dairy resources , after all what good is heating your home if your going to starve in it anyway right! If we cannot protect the staples of our economy what the heck is the whole point anymore ? Where the heck is the truth ? If the prices of our resources are falling in line with one another not out of competition but out of sheer greed then something has got to give , because there is a hidden truth in it all ! If gas prices rise and it causes products to do more than double , it is no longer about fuel cost shipping these items , it is about others like big oil only those in our bread basket too doing the same thing to us , adjusting the economy to compensate for rising gas prices does not mean that product can double in price or triple , those who are in control of our bread basket and so on are just like the big oil , the are corporations that source and resell with no assets ! Only the companies who do have assets have cheaper more reasonable products , because they must keep up with the cost and maintenance of such facilities and pay property taxes and income taxes and are accountable on all levels .
It is called "FLIPPING" ! it is not limited to the real estate market , no, no , no!
Boy! you just got to love those wall street people , flipping stocks to make a buck ! Churning out facts and figure with computers to calculate the best profits , how to F**K the economy over with the help of large investors ! There are no real intentions of making the economy work , the only intention is how big can it get before it busts ! Who wins when the game is over , The one with the most toys wins !
The middle men and women of our country have screwed us over , they don't care if we cant eat or pay our bills , only money lenders care about that !
where are our assets
Our assets are in the hands of the speculators. Proof of this is c-span's TV June 23rd (you can see the tape at c-span.org) There were 8 experts on imvestment companies and offshore investors or speculators, as the crooks are called. These experts including Micheal Masters and Fadel Gheit showed how if the Trade Commission would set the rules, that we could be buying oil at 40 to 60 dollars within 30 to 90 days.
I've been blogging all over the internet to get this across to others who are suffering from these crooks, who just deal in paper, never buying an ounce of oil themselves and push the price of oil up. It sould be illegal don't you think?
There were several republicans, and democrates who were there and no one is speaking out.
If they ever watched these experts explain the whole issue they would see how simple the solution is. The tape is there for all to see thru c-span.
All of you just go and watch this Enery Oversite committee and see what you think. It is 4 1/2 hrs. June 23rd, at c'span.org.
Both parties are helping to screw us over.
big oil and paid for politicians
Ok so not only do we have some current politicians either supporting indirectly, lobying for or maybe some have jobs waiting when politicing days are over but now a group of expoliticians is also speaking for drill drill drill.
This was on yahoo yesterday -partial
Energy tsunami coming, ex-policymakers warn
15 hours ago
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WASHINGTON —
A bipartisan group of 27 elder statesmen is sending an open letter to
both presidential candidates and every member of Congress saying the
country faces "a long-term energy crisis" that threatens the security
and prosperity of future generations if swift action isn't taken.
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Somehow they have been led to believe that this is the only way to securety and prosperity. Hogwash! the only ones who are secure and prosper with this plan are big oil and their close friends. We need other solutions. Other technologies and they are out there. For example in the sixties Chrysler had a turbine engine that would run on almost anything with alchohol in it. What happened to that idea? Also it really burns me that all these fat rich politicians are saying that we, the American people are the ones with this great big appetite for energy. Again Hogwash! It is the makers of all the crap that 37 commercials an hour on tv tricks us into buying that is the energy hogs. Why not regulate them or blame them. There are twenty year old cars on the road that get the same gas mileage being offered in some new cars. Alll the electronic gadgets they spend millions of dollars on marketing to us telling us we must have them, all have standby mode that consumes energy even when they are turned off. A new gaget, is the digital television converter. We need this so we can continue to watch the 37 commercials an hour on tv in digital that tell us we need to buy their power hungry crap. If thees politicians want to earn their pay then they need to regulate these industries to lower power consumption. They could also regulate the amount of commercials like they used to. Oh I forgot, we are a shopper society now and a patriots duty is to go out and spend money buying all this crap that consumes all this energy so we can be told that our consumption is a problem. Status quo will not work anymore. Big oil has millions of acres of land including offshore to drill in already. They just wnat more and more and more. And I would ask right now that any congressmen or senators vurrently lobbying for , representing or awaiting jobs when they retire for big oil , step down immediately as that is considered a conflict of interest and not allowed under our laws and rules in the constitution of the United States of America.Can we vote some clear and unbiased thinkers into our governemt for a change or is that not possible anymore. Big oil and drill drill drill is not a solution.