What Does The Presidency Have To Do With Gasoline Prices?

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The former Shell Oil president who claimed the BP oil disaster could be cleaned up by attaching a big vacuum cleaner to a supertanker is now making a new claim: he's saying that by the time the presidential election rolls around, gas will be at $5 per gallon.

What does the presidency have to do with gasoline prices? Everything. Just ask George W. Bush.

But I'll go out on the limb here to make an easy prediction. That if unemployment stays unelectably high for Obama - gasoline prices will probably stay relatively flat or low. But if unemployment starts looking like a non-issue by New Year's 2012 AND the Fed continues to flood the market with dollars - they will start racheting gasoline up to $5 or higher by August 2012, regardless of supply and demand. Corporate America is fully prepared to take it up to $7 if Obama's economy really starts booming. One way or another, they're going to do all they can to get rid of Obama - and $5+ a gallon will do it if the unemployment picture won't.

Business Will Challenge Tax That Can't Be passed Down?

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Saturday's Janesville Gazette contained the newspaper's expected WMC and WEDA collaborated editorial rant supporting the misguided "anti-business" publicity campaign against the state of Wisconsin. This partisan driven editorial was apparently also the paper's attempt to muster public support in favor of government sponsored capital hand-outs and bidding procedures to 'woo' business development.

JG Editorial Excerpt:
Two local Democrats, Sen. Judy Robson of Beloit and Rep. Mike Sheridan of Janesville, earn credit for the DOZ proposal. But they are part of the Democratic majority in Madison that is backing billions in new taxes. Many of these target businesses and won't help Wisconsin's economy thrive.

A tax targeting business? That's constitutionally impossible according to Stan Milam's column on the very same page titled "Will Democrats take stand against oil company tax?" In it, Milam repeatedly parrots the notion that a provision in Wisconsin's oil tax proposal prohibiting companies from passing along the cost (of the tax) onto the consumer is unconstitutional.

JG Excerpt: (Milam)
Rep. Mark Pocan, D-Madison, says he's not sure the tax and the prohibition on passing along the costs is constitutional. Mind you, this is after Pocan's committee approved the provision.

Milam's column creates a revolving contradiction with the editorial perception that businesses pay taxes and are now targeted to pay more. But he does re-enforce the notion that most taxes meant for business are rarely challenged by business in the courts because companies are free (constitutional?) to bury the cost burden in punitive price hikes on consumers or wage and benefit cuts on workers. So, are businesses truly taxed if they pass the cost down to the next in line?

So the argument that businesses are targeted or pay too much state tax doesn't hold water. But Doyle and the Democrats may have actually stumbled upon some tax language that may work as it is intended. Otherwise, why bother to challenge it?

I'm not trying to pretend I know the legal structure on which the proposed oil tax is founded. But judging from Milam's subjective reactions to it, it appears the oil tax - unlike all other taxes - will work as intended. If not, let the courts decide. It's definitely worth the effort and a challenge may open up the right doors to make it work. How will we know if we don't try.

Republicans and their supporters can't have it both ways. They can't say Wisconsin businesses are overburdened with taxes, yet are willing to go to court the moment it occurs they are expected to actually pay one of them.

NOTE: Milam's column is not available on the open Web.

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It is my belief that the federal government, acting as the premier equalizer, should prohibit states, counties and local jurisdictions from using cash, legislated tax credits, rebates or any other creatively inspired capital derivative as a bargaining weapon against each other in the quest for private venture economic development. We should stand together as a united country with each state and region participating in a cooperative economic meritocracy based on the people's ability to improvise and innovate, available resources along with transportation, housing and education, to land private business start-ups and expansions - not to be decided by the wealth of participants in a capital-based bidding process.

Of course, the current practice involving capital bartering for economic development under governmental ordinance and oversight is nothing new. It has been going on for decades. It is the status quo. And those encouraging and advocating for these short-term solutions to our deep and long-term problems are only fueling the status quo continuum. Once it takes root it is like a train rolling downhill with no brakes. Those jumping onboard are not slowing it, their weight is only increasing the power of the virtual impact that awaits. It is a defacto morality that works in tandem with campaign finances, government corruption and corporate cronyism.

We must not allow cities or regions, big or small, to suffer economically merely because they were unable to muster a capital hand-out to the wealthiest entities among us. It should be a crime. The cash hand-outs and tax credit derivatives legalized in our state houses under the guise of an economic incentive package should anger each and every one of us.

I realize many will think these statements are from an impossibly hopeless idealist, but I call it the only way forward to a sustainable and prosperous future. Nothing is impossible.

Congressional Challenger - Wrong Party, Wrong District

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Peter Theron, launched his official candidacy to run against Rep. Tammy Baldwin for Congress on Saturday using the GM plant in Janesville as a backdrop. The bespectacled math teacher couldn't have picked a better example than the job losses at the plant to illustrate the economic policy failures of its congressional representative - except for one minor detail.

Capital Times Excerpt:
Theron went down to Janesville for his first campaign announcement because he wanted to pose in front of the recently closed General Motors plant there to dramatize his point. No matter that the plant itself is not in the 2nd District, it is close enough and its shutdown affects thousands of workers in the district, he said.

The GM plant is not located in Baldwin's district. Instead, it had the unfortunate luck to reside in the district of the chosen one for status quo low-wage conservatism - Rep. Paul Ryan. Many believe this election will be a referendum on George W. Bush and his congressional enablers. It's no secret that Paul Ryan ranks right near the top in that group.

Capital Times Excerpt:
"When my opponent was first elected to Congress the cost of gasoline was about $1.20 a gallon. Under her watch, gasoline has passed $4 a gallon. A tankful of gasoline that used to cost $30 now costs $100," he said in his announcement speech. "Some shrug, others suggest walking. I insist on drilling." -- Peter Theron, Republican Candidate for the 2nd Congressional District of Wisconsin

Is this even a legitimate talking point? Under her watch?

Theron, including Republicans like Ryan think the best way to wean an addict off of the junk is to give 'em a booster shot?

Gasoline prices have been marching upward beginning with the Bush war on Iraq rubber stamped by a GOP–led Congress. In effect, they got their booster shot from this ill-begotten war, oil production in Iraq is at its highest level since the US-led invasion of 2003. At over 2.4 million barrels a day it's more than twice the oil we can ever expect to pump out of ANWR, yet prices continued to climb. Remember, Iraq's oil was nearly off-line before the war and was limited to minor trading under a corrupted oil-for-food program. Prices for oil and gasoline were relatively low back then.

While Bush continues to veto democratic legislation, the repeated call for more drilling drums to the beat on the assumption energy prices will fall. Iraq's booster shot to global oil supplies is clear evidence to the contrary.

Will Gasoline Prices Plummet Into Election Day?

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Prices have just started coming down in election year fashion during the last week of July and Republicans have already tried to take psychological credit for it when Bush lifted the Executive moratorium on offshore drilling.Historical portion of graph from GasBuddy.com.

If the election year effect on gasoline prices ring true as many Americans believe, the price of a gallon of gas can be expected to precipitously drop into the $3.15 to $3.25 range by Election Day 2008.

However, it is my opinion the corporate command in the White House has abandoned the "Energy Task Force" doctrine empowering Big Oil to do whatever pricing control is necessary to guarantee "no shortages" at the pump. In effect, the GOP may have less power to make it happen this time around. Also, investors have pulled away from real estate and the capital markets and have dumped most of their eggs into oil, inflating the price.....until something better comes along.

Americans Blame GOP For High Gasoline Prices

CNN Money Excerpt:
On the other hand, only 31% of those polled think congressional Democrats are a significant cause of high gas prices - 43% termed the Democrats a minor cause - and 26% said they are not a cause at all.

Funny how the CNN article reported polling results only on the democrats and neglected to summarize the polling on Republicans for the high gasoline prices. The word "republican" is nowhere to be found in the article. But apparently they didn’t have to, since most already know that Big Oil, the GOP and Bush policies are one and the same.

Exxon Breaks Own Windfall Profits Record

Wisconsin Republicans Vote Against Domestic Oil Production

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Another week has come and gone without the Democratic-led Congress able to wean the country off of foreign oil and force oil and gas companies to “use or lose” the lands they have leased from the federal government. The bill H.R. 6515, also requested that Alaskan oil cannot be exported.

The Hill Excerpt:
In addition to requiring energy companies to either drill on 68 million acres of approved and leased lands or vacate their leases, the new Drill Act also included language to speed up the leasing of 20 million acres in the National Petroleum Reserve-Alaska, to reconstitute the ban on the foreign export of Alaskan oil and to urge the president to facilitate the completion of oil and gas pipelines from Alaska.

The three Wisconsin house republicans helping stall energy legislation and voting against the "Drill Act" were Sennenbrenner, Petri and Ryan.

Free Republic Excerpt:
A similar partisan dynamic is stalling energy legislation in the Senate, where Democrats and Republicans are at a standstill on a measure (S 3268) to tighten regulation of energy futures trading. Democrats acknowledge the measure is only a short-term, partial solution to the rising cost of gasoline, but Republicans have threatened to thwart action on the bill, unless GOP members are allowed to offer amendments that would open new areas for oil drilling.

In the House, nearly all Republicans and eleven democrats voted “no.” As record gas prices continue to soak family budgets and leave municipalities in dire straits, Republicans have found an excuse why not to drill and why not to lower gasoline prices. They found their excuse by opposing the democrats plan, and are willing to exploit those misconceptions for the sake of their corporate donors and political careers.

Ten Good Things About $4-up Gasoline

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From Time, 10 Things To Like About $4 Gasoline.

1. Global Jobs Return Home
2. Sprawl Stalls
3. 4-Day Work Weeks
4. Less Pollution
5. More Frugality
6. Fewer Traffic Deaths
7. Cheaper Insurance
8. Less Traffic
9. More Cops On The Beat
10. Less Obesity

These are all good and beneficial. But if we like these things as a result of $4+ gasoline, why would we like them any less at $2 gasoline?

Janesville Planning For Economic Reality

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JG Editorial Excerpt:
Do you care about Janesville’s future? Are you concerned about our community’s economic health beyond the expected closure of the GM plant? Do you want our city to keep prospering without skyrocketing property taxes? One last question: Do you have plans for Thursday afternoon?

No, these questions were not asked by the Janesville Gazette when the Janesville GM factory just missed the corporate chopping block less than two years ago. Or when Feingold and Ryan were making the rounds taking their positions on CAFE and how urgent things were back then to coerce GM to bring a gas miser vehicle into production at the Janesville plant. And these questions weren’t asked, much less considered when the UAW was striking outside the plant in September of 2007. No, no. These questions were finally asked in Tuesday's Janesville Gazette editorial. But before this for the past ten years at least, the Gazette did what they always do. They ran vicious anonymous comments against the workers twice a week, editorialized against the workers to do whatever it takes for the strike to end, all the while remaining willfully complacent about gasoline mileage issues.

Back in July of last year, I was one among a very few vocal others who insisted that GM should not wait for Congress to impose better gas mileage standards through stricter CAFE standards. Back then, after the Gazette wrongly accused Sen. Russ Feingold of turning his back on Janesville for voting for CAFE, I wrote this…..

Rock Netroots Excerpt:
If autoworkers really believe gas guzzling trucks and SUV’s are the future, stick with Paul Ryan. If anyone thinks that gasoline will never pop to five dollars a gallon or more within the next ten years, stick with Paul Ryan. Building EnergyStar Trucks and SUV’s will be the future market and to the contrary, Janesville can be the future if we don’t turn our backs on this reality. Don’t be fooled by the satisfaction of complacency or the blindness of a partisan newspaper.

Now the Janesville newspaper is promoting a city sponsored pep rally of ideas to reform the local economy?

I can’t even begin to imagine how different things might be, had the city’s only newspaper taken a philosophical U-turn from their wingnut propaganda and took on an activist’s role like this in support of the GM workers for the sake of the Janesville economy, if not, at least for themselves.

Can you imagine the impact had the newspaper sponsored a media campaign asking 25,000 Janesville area residents to flood Delavan to Kellogg and the surrounding streets around the Janesville GM factory on a Thursday evening in July or September of 2007 marching in support of demanding corporate GM to do whatever it takes to keep the doors open for business? High oil/gasoline prices were the best reason to bring in a new model and the poorest excuse to betray the workers. I can imagine only because it's the right town. Reality tells me it's the wrong newspaper.

Supporting Gas Guzzler Future A Big Gamble

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On Wednesday, the Janesville Gazette published an open letter by Forward Janesville to the Citizens of Rock County about their position on new CAFE standards and to my surprise, they (Forward Janesville) did not call out politicians or political parties by name. Coming from a heavily politicized right-wing organization such as them, this is a change for the better, but they certainly have not convinced me that gas guzzlers are the way to the future for the Janesville GM plant.

They offered their view that when it comes to purchasing vehicles, consumers control what they buy, and government should not try to change that.

JG Excerpt:
Why have CAFE standards failed? Because consumers control what they buy, not the manufacturerers. — Forward Janesville

Not only does that statement ignore the high cost of gasoline, the entire letter avoided the gasoline price issue.

Sure, politicians will always say that strict mileage standards will lower our dependence on foreign oil because it sounds good, but the average Joe at the pump could care less about the foreign-sourced oil concern. In the past just like now, strict CAFE standards were imposed because of the high price of gasoline, and CAFE standards fail or should I say became irrelevant when gasoline was cheap and plentiful as it was through the mid 80’s and 90’s. People really did buy what they wanted, mileage, foreign oil or automaker be damned. Can anyone in good conscious say that nothing has changed since then?

Although I would admit today we have the added awareness of global warming, pollution, conservation and poor gasoline infrastructure issues, this only adds to the urgency to impose dramatically tougher fuel efficiency standards. But the single biggest reason why we are even talking about CAFE is because Big Oil is woefully inadequate as the vendor of the nations gasoline fuel supply. Gasoline is now expensive. That their ineptness is rewarded by huge profits runs contrary to everything most individuals hold dear as basic fundamentals to prosperity. Our values have been compromised and our stubbornness has turned us into fools.

But I return to this open letter.

Right now, the price of gasoline (not government) is nibbling away at our freedom and changing our buying habits. We can no longer ignore the price of gasoline when we set out to buy a new vehicle. Unless something positive happens on the refinery scene (don’t hold your breathe), light-truck plants like Janesville GM can build the finest most durable trucks in the world using micrometer tolerances on body fit - and market share will dwindle. But don’t take my word for it – look at recent sales reports. Here.....here......and again.....here.

The ups and downs of auto and truck sales closely mirror the gyrations of pump prices. Only the intellectually dishonest will blame politicians and government meddling for these poor sales results.

JG Excerpt:
It’s simply more politically expedient for Congress to force these standards down the throats of auto manufacturerers than entice consumers to make different choices when buying vehicles. – Forward Janesville

I wish I could call them on their position and watch the consequences of weak fuel standards unfold and crush the American light-truck and SUV industry, but I am not a sadist. Those opposed to tough CAFE standards seem willing to ignore recent sale's reports, the current price of gasoline, world history, middle-east instability, global oil supplies, refinery manipulation and consumer trends. It would be funny, if it weren't so true. Just ask Rep. Paul Ryan why he opposes CAFE, he probably won't mention anything from above.

Obviously, there is a lot more politically going on with people when they suggest to others that government should not meddle in corporate affairs, but imply it's perfectly fine for government to offer consumers enticements to make different buying choices. I assume by enticements they mean the government should offer tax credits, rebates and subsidies to encourage people to buy vehicles they supposedly don’t want. But this can work both ways, why not tax people to help pay for the added burden their gas guzzler imposes on the environment and the country's fuel supply? Taxes are enticements too. But enticements as credits or taxes are not the answer to this challenge. In this case they just create another class-dividing bureaucracy that tells people that if they have enough money – they can simply buy the privilege.

Twenty years ago, American automakers lost the auto segment to imports over quality, and if we learned anything from past history and recent trends, they are on track to lose the truck segment by thinking only quality matters. Granted, it's different this time around. If we do nothing, low demand for gas guzzlers will force automakers to shrink the light-truck segment in faster time than Congress is willing to give them to attain higher fuel standards.

I’m not willing to gamble on that, and I have a lot less to lose than many others including Forward Janesville.

Surrender To Big Oil And Shut Up

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Borrowed from the Philadelphia Enquirer, Wednesday’s Janesville Gazette Editorial titled, ”Congress ducks harder choices on gas prices” was one of those rants attempting to prove that Democrats are no different than Republicans and just as helpless when it comes to doing something about the high price of gasoline. But if that were true, then why oppose democrats efforts and waste ink accusing them of grandstanding?

JG Editorial Excerpt:
“The American people can no longer afford the Republican rubber-stamp Congress and its failure to stand up to Republican Big Oil and gas company cronies,” House Democratic leader Rep. Nancy Pelosi of California said at the time. She said the Republicans had given the public “empty rhetoric rather than join democrats who are working to lower gas prices.

And that’s just it. Pelosi accused the Republicans of empty rhetoric, in other words, they made no attempt to enact legislation to hold Big Oil accountable. And to the contrary, that’s all the democrats are trying to do now, hold Big Oil accountable. Some way – some how. And you know what? The same people who claim democrats are ducking the issue now are the same people who rip Gov. Doyle for trying to tax oil profits, they are the same people who blast Rep. Judy Robson for standing up for people over profits, and they are the same people who accuse democrats of grandstanding because unlike the republicans, the democrats have held hearings on alternative fuels, climate change and hydrogen research.

JG Editorial Excerpt:
A year later, Democrats control Congress, Pelosi is Speaker, and gas prices are at a record nationwide average. Some analysts predict gasoline will hit $4 per gallon this summer in many parts of the country. Should we presume that Democrats are now in cahoots with Big Oil? No. Democrats can’t control prices now, just as Republicans weren’t responsible for rising gas prices a year ago.

This is classic. Again, the problem here is Republicans were accused of doing nothing at all and still do nothing about profits gouged out from record high prices. In fact, Bush and his beloved republicans call the record profits a sure sign of success and a direct result of the “free markets.” I have yet to hear that from those "same as republican" democrats.

JG Editorial Excerpt:
Though oil companies may not be gouging, they make enough to forego governmental charity. The House did vote this year to rollback $14 billion in subsidies to oil companies but couldn’t agree on a version that might get past President Bush’s veto pen.

It might not get past Bush’s veto pen? Shouldn’t ANY version of cutting off $14 billion to profit-gouging Big Oil be better than none at all?

After ripping Democrats about doing nothing about gasoline prices, then ripping them again for trying to do something, the writer(s) of this article then slams renewables including ethanol and bio-fuel as potentially poor alternatives to gasoline. It's a can’t fail if you don’t try mentality and a sure sign that the Republicans answer to high gasoline prices is to surrender to the manipulated markets of Big Oil.

JG Editorial Excerpt:
It should levy a higher tax to discourage consumption and raise desperately needed revenue to repair crumbling highways and boost mass transit.

At the closing of this piece of work, the writer implies that paying the high gasoline prices to Big Oil now (assuming prices fall) is better than the government taking that extra revenue in the form of taxes to discourage consumption and repair our crumbling roads, mass transit systems or worse yet, pay back the money borrowed from Social Security. God forbid if that were to happen.

Protest Gasoline Prices How-To

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I for one salute the gas station owner shutting down his business for 24 hours in Mequon,Wisconsin in order to protest the high gasoline prices. His courage and willingness to forfeit a day of earnings is a rare occurrence in today’s atmosphere of cut-throat competition and where dissent of the status quo is viewed as a negative attitude. His one-man protest is something I can certainly relate to, but I have to agree with some of those who didn’t think it would make much difference.

JG Excerpt:
IMPACT: Industry experts say the move, which Pollack estimates will cost him $1,500, won't make a long-term difference. Pollack says he doesn't disagree, but he hopes the protest will prompt others across the nation to speak out as well.

The least I can do is speak out, so I thought what would really make a long-term difference?

Well for starters, don't boycott Big Oil. That will only lower prices by a nickel or a dime for the short term. Instead, consumers should organize and boycott everybody else. By everybody else I mean all the big box stores, restaurants, hotels, boutique shops, theaters, amusement parks and shopping malls. All the brick and mortar institutions. As far as gasoline is concerned? Buy as much as you keep in your tank, in fact top off constantly. You’ll need gasoline to drive to work and visit family and friends. Anywhere other than your job or the grocery store to sustain yourself are off limits to drive to. Only shop for frivolous consumer goods at places you can walk or bicycle to. What will this accomplish? It will force all the businesses other than Big Oil to send their lobbyists into Washington, DC to put real pressure on Congress to finally put real pressure on Big Oil in order to get their customers back at the stores.

Obviously, Big Oil is not going to lobby Congress for lower gasoline prices and for the most part, politicians work for and listen to corporate business interests more than anyone else. In a way some people pinched by the high prices are already doing this on their own but it needs to catch fire with the kind of enthusiasm that would finally force the issue.

Believe me, the businesses effected by this will send their lobbyists into Congress before they consider laying off employees or shutting down their business.

There is no other way to let Congress know that despite an oil glut, Big Oil has not been able to keep the country supplied with a steady flow of gasoline, and have been gouging huge profits because of doing an extremely poor job - extremely well.

Oil Is Cheap - Its The Barrels That Are Priceless

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THE NUMBER ONE REASON why gasoline prices are high and expected to get higher is because RAISING THE PRICE IS THE ONLY WAY BIG OIL CAN DISCOURAGE DEMAND AND ARTIFICIALLY BOOST SUPPLY HIGH ENOUGH TO AVOID REAL TIME SHORTAGES AT THE PUMP ACROSS THE COUNTRY. Expect record profits. That this is happening without terror attacks, oil pipeline explosions and hurricanes only means that the profits posted this year will probably be a world record AGAIN.

Big Oil experts and economists have no scapegoats to blame it on this time. So for once we are at least hearing half the truth about the insufficient number of refineries which in effect keep production on a tightrope, as I have been saying for the past year. The price of gasoline is high, but not because BIG OIL has to pay more for distribution costs, raw product, infrastructure or manpower. But this time around, I don’t think prices will plummet in Rock County to $2.19 a gallon by Oct. 20th like it did last year because THIS YEAR IS NOT AN ELECTION YEAR.

Post Election Gasoline Prices:
VP Dick Cheney held secret meetings years ago with Big Oil in the White House and it can be safe to assume that Big Oil has been given free rein to do whatever it takes to ensure a steady supply of gasoline at the pump. If you have to raise prices to accomplish some level of control over consumption, then by all means, do it. The Bush Administration could care less about high prices, that's “free market” in their view, just don’t repeat the energy crisis the nation experienced in the 70’s with widespread shortages, long lines and rationing. It would doom his presidency. But we'll never know for sure because, the meetings were "secret."

INSTEAD OF platform drilling off the coasts or violating the sacred wilderness of Alaska, we should petition the U.S. Government to build at least four new refineries with taxpayer money to process the current glut of oil that privately held refineries can’t or won’t. Certainly the refining business is profitable as witnessed by Big Oil’s $10 billion quarterly profits and besides, if Big Oil can’t supply the country with enough gasoline, they leave no choice but to have the U.S. government intervene to guarantee a sufficient supply.

By the way, Congress will be allowing for more oil exploration in the Gulf of Mexico and Alaska, but will this bring the cost of gasoline down? Ahh – no. Will it at least help us to become more oil independent? Ahh - no. The bottom line on this resource give-away is profits – nothing else. Arabs have the cheapest oil in the world no matter what anyone says.

DUE TO logistics, good percentages of Alaskan oil are being sold for a higher premium to countries like Japan and China. The Alaskan oil is then indirectly replaced by purchasing cheaper Arab oil to be used in the states. The more Alaskan oil pumped, the more dependent we become on the Arab oil needed to replace it, while greedy oil companies pocket the difference. But the Bush administration will swear that we need to open protected wildlife areas to wean ourselves off of terror sponsored oil. They have even defended the sale of Alaska Oil as a way to decrease our trade deficit with Japan. Their excuses to exploit our resources for the sake of America in the name of profits never ends.

WATCH FOR Republicans/Conservatives to once again blame gasoline taxes for the high price and demand for the taxes to be rescinded. In reality, this slightly lower price would work temporarily against Big Oil's objective to dampen demand thus forcing Big Oil to boost the price to the taxed value, but instead of the state collecting much needed revenue, Oil profits grow even larger.

Bush Not Just Speculating

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State of the Union Excerpt:
“And this dependence leaves us more vulnerable to hostile regimes, and to terrorists -- who could cause huge disruptions of oil shipments, and raise the price of oil, and do great harm to our economy.” – President Bush

Apparently, the terrorists have not been doing their share impacting the price of oil. Neither have India, China, peak oil, hurricanes, failing infra-structure or the general violence in the middle-east. These things must have fallen off the planet for the time being. Our President will know what to do.

The price of gasoline has been falling a few cents a week for the past month. On Monday, the day before the SOTU speech, the price for a gallon of gasoline in Janesville was $1.99. By Thursday, it was $2.19.

USA today excerpt:
The price of crude oil, which accounts for about half the price of gasoline, rose last week after President Bush in his State of the Union speech called for doubling the nation's emergency fuel supply — the Strategic Petroleum Reserve — starting with a government purchase of about 11 million barrels of oil this spring.

The President of the United States, a former oilman backed up by a fully staffed energy department with the latest information technologies and some of the top economic experts and consultants available – could not connect the dots and realize the impact this announcement would have?

You know, out of all the crooked deals, secret energy task force meetings, behind closed door meetings and other information blacked out in the 9-11 commission report, one would think Bush would have shown the proper discretion proposing the doubling of the national oil reserves. If there ever was a proper time to keep his mouth shut and invoke presidential powers to declare this as “insider information,” to be kept secret in the name of free markets and national security - this was it. But nooooo.

He did the only thing he could have done to stop the price of oil from falling further. He may have also saved the ethanol industry from having the carpet pulled out from underneath in doing so. The price of oil has been falling because speculators are putting their money elsewhere. He is a lot of things, but George W. Bush is no dummy.

Bush Political Capital: Spent on Gasoline

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Republicans are noting with some satisfaction that gas prices are falling. The specter of gas costing significantly more than $3 a gallon this fall had worried Republicans who feared that voters would take it out on their party in November. But prices are well south of $3 and dropping. In Janesville the prices are now averaging about $2.58 a gallon, down from $3.09 a gallon a little over a month ago.

The declining gas prices have left many confused who accepted the idea high prices earlier were because of middle-east volatility, China and India increased demand or simple economic laws of supply and demand. The artificially inflated prices of the spring and summer dampened demand for gasoline in the U.S. which helped increase domestic supplies without finding new oil and put downward pressure on prices, but how does that influence the price of global oil?

However, fears of a total geopolitical meltdown in the Middle East still exist with Iran in pursuit of nuclear technology, Iraq in worse shape than it was three years ago, and a still shaky Israel/Palestinian cease fire. Under past circumstances, the recent attack on the American Embassy in Syria would have caused oil to pop another dollar a barrel overnight. Al-Quada is back in the news threatening more mayhem. The hurricane season is in full swing and will threaten Gulf of Mexico oil facilities into November. But the price of oil is going down.

Other reasons given by experts for the high oil prices earlier was the suddenly new heavy demand from China and India, while others have said we have reached “peak” oil and global supplies will begin to decline and raise prices further. None of this has changed. Throw in the recent Alaskan pipeline failure and the overbearing fear propaganda of the Bush/GOP election and all the ingredients are in place for even higher prices. Because of Big Oil’s ties to the Bush administration and the GOP-led Congress, there are some sound theories that dropping gas prices have more to do with politics than markets.

For instance, at an energy forum held at the Congressional Black Caucus conference last week, Rep. Carolyn Kilpatrick (D-Mich.) suggested the price drop right before the November elections has raised her suspicions. Similar comments were offered on the nationally syndicated Tom Joyner radio show yesterday.

People must remember that gasoline was oddly low during the summer and fall of 2004 and rose steadily to all time highs after the election with all the same excuses in place for the high prices today. The only difference here are the upcoming mid-term elections. President Bush has probably used up what may be the last of his political capital by requesting for lower prices to soften voter rebellion in November. With huge and obscene profits, Big Oil can easily afford to give away a little and undoubtedly owes some favors to the GOP Congress for their loyalty as well.

Venezuela: Friend or Foe?

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On Citgo Gasoline:
Tired of supporting the war in the Middle-east? Start buying Citgo gas. It comes from Venezuela.
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A previous Sound Off caller(above) said we should buy Citgo gas because it comes from Venezuela. Its nationalized by Venezuela; its state-owned, and Hugo Chavez, Venezuela’s president, has sworn to dig the grave of U.S. imperialists. He’s one of the worst U.S. enemies and controls Citgo. I won’t buy it.

This is an interesting comment only because the Bush Administration has no problem in principle buying crude from Saudi Arabia or other Islamic states in the Middle-East. But the Administration views Venezuela as a major problem primarily because the government of leftist President Hugo Chavez has retaken possession and control of their countries most prized natural resource – the oil fields. Chavez has literally cancelled oil contracts and booted out some western oil profiteers and members of the Bush base. There has actually been suggestions to assassinate Chavez from the likes of Christian (thou shall not kill) TV evangelist Pat Robertson. In the meantime, Chavez has donated energy supplies to needy people in the U.S. despite Bush Administrations threats. Charles S. Shapiro, the State Department's principal deputy assistant secretary for Western hemisphere affairs cried foul, said Chavez is providing oil for low-income people not for the sake of monetary profits but for "for political gain." Chavez is no enemy to the people of the United States.

Why its a good idea to buy goods made from state-owned and nationalized forced labor in a communist country like China but a bad idea to buy state-owned gasoline from a democratic country like Venezuela is something only a corporatist can explain.

The reference defending U.S. imperialism is more troubling, assuming the caller supports it. Imperialism draws heavy criticism on the grounds it has been frequently employed for economic exploitation in which the imperialist power makes use of other countries as sources of raw materials and cheap labor, shaping their economies to suit its own interests, and keeping their people in poverty. One can hardly blame that Hugo Chavez opposes this agenda. When imperialism is accompanied by overt military conquest of non-human rights abusing nations, it is seen as a violation of freedom and human rights.

It turns out that the U.S./Venezuela relationship is just another failure of the Bush foreign policy, and unfortunately Hugo Chavez is being driven to ally himself with other troubled and indifferent nations.

Should you buy gas from Citgo? There is no reason not to.