Harley: Cutting Jobs Better Than Tax Credits To Keep Them

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In this article, it's reported that Harley-Davidson turned down $25 million in state tax credits to keep manufacturing jobs in Wisconsin.

Chicago Tribune Excerpt:
In a statement issued Thursday, Harley officials said the company declined the tax credits because its employment plans might not work with the state's terms.

Sure, the tax credits are honored only if Harley-Davidson would honor the technical requirements of Wisconsin's statute for job retention or growth. They could not make that committment for $25 million. But, H-D's decision should send a signal to state officials that cutting taxes and tax credit's for jobs are not worth the effort. They don't create or retain jobs.

Cut In Demand - Utilities Ask For Rate Increases

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Wisconsin Power and Light (WPL), much like the Janesville Water Utility, announced they will “likely’ file an emergency rate increase because of lost sales volume.

JG Excerpt: (Jan.22, 2009}
The chief executive of WPL's parent, Alliant Energy, projected WPL's sales will drop 6.4 percent this year, or $30 million. Because of that, Alliant CEO Bill Harvey says they "will likely file an emergency rate case" to the Public Service Commission.

The status of this request reached the "emergency" stage when the CEO did the math on a sales drop of 6.4% after the board of directors increased their annual common stock dividend by 7.1%.

MSN Excerpt: (Dec.18,2008)
The Alliant Energy board of directors has approved an increase in its 2009 expected annual common stock dividend to $1.50 per share from the current annual dividend of $1.40 per share.

Near the same time, the PSC released this statement.

PSC Excerpt: (Dec.18,2008)
MADISON – Today, the PSC ordered that there will be no increase in electric rates and a slight decrease in gas rates for Wisconsin Public Service Corporation (WPSC) and Wisconsin Power and Light (WP&L) customers in 2009.

“Declining fuel costs have played a major role in allowing us to successfully hold the line on electric and gas rates for many Wisconsin ratepayers,” said PSC Chairperson Eric Callisto. “With Wisconsin in the clutch of tough economic times, lower fuel costs have been a silver lining, and I am pleased at how PSC staff, the utilities and ratepayer groups have come together to look at ways to turn this into relief for Wisconsin ratepayers.”

Alliant CEO Bill Harvey said that rate settlement was based on 2007 figures. Could their dividend increase also be based on old figures?

I urge Wisconsin utility customers to contact the PSC and tell them to keep their word on no increases for 2009, and with further declines in commodities, demand the lower costs be accurately reflected on our utility bills.

Just before Christmas, the Janesville Water Utility also requested a rate increase for the same reason - low sales volume expected from the closing of the GM plant.

JG Water Rate Increase: (Dec.20,2008)
To account for the reduced revenue, the city has approved a wastewater rate increase and is anticipating a water rate increase for next year. Rate increases also are planned for 2010.

The Janesville water rate increase and WPL's increase are two sides of the same coin and both must acquire PSC approval before becoming law.

Send all complaints against rate increases by water, heating gas and electric utilities to the PSC.

Janesville residents, in addition to sending complaints to the PSC, can send complaints regarding the proposed water and sewer rate increases to the Janesville city manager and all council members here.

Note: WPL is a subsidary of Alliant Energy. For all practical matters - they are one and the same.

'Credit Crunch' Scam Used To Sell TARP?

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AlterNet Excerpt:
There is something approaching a consensus that the Paulson Plan -- also known as the Troubled Asset Relief Program, or TARP -- was a boondoggle of an intervention that's flailed from one approach to the next, with little oversight and less effect on the financial meltdown.

Of course, no one disputes the fact that as the economy has tanked, the number of new loans being issued to American families and businesses has plummeted. But is because credit has dried up for qualified borrowers?

Economist Dean Baker doesn't think so. He explains the situation in simple terms: The media, he argues, "are blaming the economic collapse on a 'credit crunch' instead of the more obvious problem that consumers just lost $6 trillion of housing wealth and another $8 trillion of stock wealth."

Some of that wealth Baker mentions was lost in property value, numbers and personal equity only, the basic essentials you need in order to borrow money. No question, if a country loses $14 trillion in equity, things will begin to spiral out of control. What I believe played just as big a part was the $700 billion a year in hard cash that was confiscated from American pocketbooks for artificially overpriced gasoline. Over a period of several years, this could have drained as much as $3 trillion out of the U.S. economy alone. Again, this was not in numbers or equity - but real paper currency.

My point here is not about energy independence or the money leaving the country, but about regular folks being left with little money in their pockets after they filled the tank, week in and week out and year in and year out beginning in late 2003. Under the fear of media induced pipeline bombings, hurricanes, phony supply and demand explanations including Bush Administration propaganda rhetoric, international speculators ran wild inflating the price of a barrel of oil, thereby draining the liquidity out of the global economy.

Countries whose national budgets and programs are fueled and paid for by revenue from oil like those in the middle-east were reaping huge surpluses, not in stock or commodity swaps, but in liquid cash. That can only go on for so long before the world runs out of money. So, many different events and actions transpired to bring us to this point, but if I had to choose which one of the two arguments played a larger role in the global economic decline, I would think it's more about a lack of liquidity – and less about a lack of credit.

I also believe that's why our Federal government is printing more and more currency and creating tax and rebate stimulus plans. They want to put liquidity in pockets quickly, through any and all tools and vehicles they have at their disposal.

On the credit side, the Fed lowered interest rates to zero and threw billions (liquidity) of dollars to the banks - yet, none of that really helped borrowing or mattered on the global scale. It's a solution for a different problem. Credit will magically re-appear when any collateral necessary to secure debt and spur borrowing gains value - that includes most importantly - the collateral offered by good job security. They can throw hundreds of billions at that problem and accomplish nothing but a gargantuan national debt.

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.

Bill O’Reilly A Closet Populist?

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The most recent Bill O'Reilly rant titled, Fight back against Big Oil offers a clear idea just how loosely his head is bolted on. For instance, Billo really thinks that…..

Townhall.com Excerpt:
If a big oil company wants to tighten supply, for example, it's a snap. Just slow down the refinery process by ordering extra "maintenance" or something.

Think about it. If Big Oil would want to tighten supply (yet avoid shortages at the pump and really, really bad publicity), why in the world would they purposely slow down the refinery process when all they need to do is raise the prices slightly. Again and again if necessary till they balance the supply with the demand. In our digitally interconnected world, THIS is the snap. Why in the world would they want to send the message they can’t meet the demand at the current prices by slowing the process – they’d lose money. You don’t make $15 billion quarterly profits by deliberately failing to supply the product……..at any price. You sell what you have at the MAXIMUM the market will bear. Even if it hurts. But Billo still believes and that’s good enough for his Klingons.

But his rant gets better because near the end he not only encourages people to empower themselves, to do a left-wing thing, he actually says if he were president he’d name the greedy CEO’s making millions off of us poor schmucks. My friends at Leftyblogs must be finally getting to this guy. Empowering the people? Strike at the profiteers? Bill O'Reilly? An idealist? A populist?

Instead of taking the typical GOP stance and blaming gasoline taxes, regulations or liberals, Billo asks the people to get ANGRY. Oh, please!

Townhall.com Excerpt:
But if Americans would get angry and begin punishing the oil bandits, prices would drop.

Punishing? Gasp! Watch what you say there, Billo. You're only one more verb away from becoming a person of interest by the authorities.

Are you saying people should organize a mass boycott? How socialist of you! How left-wing of you? A consumer strike? What about all the investors, risk-takers and poor seniors collecting Big Oil dividends? Remember, mega-profits are a sure sign those special and talented CEO's are worth their millions according to Wall Street.

Well, I guess when a self-righteous whacko like Billo tells people to get angry, it’s ok. But when some citizen rises up and pushes back at the greed-fueled power train running downhill on greased rails, well, that’s different. Only then, it must be the irrational outburst of a combative and negative person with an axe to grind. Perhaps in Billo's case, they’d be right.

Competition At The Core Of High Prices?

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The editor at the Beloit Daily News believes government is not responsive to the peoples needs. To that I can agree, but the needs he mentions are high price and cost problems that have snowballed as the consequences of the drive to create wealth free of government interference.

HERE'S WHAT he thinks may turn voters' heads for 2008:

Election 2008: They still don’t get it:
* The price of gasoline and household energy.

* Rising prices for groceries, airline tickets and all the other items tied to energy/transportation costs.

* Continued stagnation in wages for workers. And those demoralizing frequent reports about how the super-rich are enjoying the best times ever.

* The migration of manufacturing jobs to other countries.

* The soaring price of sending a kid to college.

* The persistent whining for bigger government budgets, and spending that consistently rises at above-inflation rates.

* The pain of mortgage payers as adjustable rates set higher.

* Declining values for home sellers.

* Debt-ridden Americans who no longer can use their homes as ATM machines.

* The government's duplicitous performance and unwillingness to seal the borders.

* And, perhaps most important, the growing cynicism as Americans sense the politicians don't really care about them, that the political class is, (1) in it for themselves, and (2) a more-or-less wholly owned subsidiary of the rich and powerful.

I would have thought nothing of this editorial had I just not finished reading their take on Wisconsin's legislative action pertaining to the cable competition act.

Nowhere in the list of voter's concerns is the mention of Social Security, the Iraq War or health care, things the government and politicians can actually do something about.

According to the editorial, it’s all about high prices and costs in energy, food, outsourcing, education, home values, debt and airline tickets!! – consumer goods and business activities running unfettered according to faux free-enterprise market principles supported at it's core by none other than competition. Competition, the key word and ingredient espoused by newspaper editors, economic analysts and other "educated" capitalists as the golden road to lower prices. You can't have it both ways.

But after reading this, I can only guess the editor believes the rich getting richer and the poor getting poorer is not a problem, it's just those damn demoralizing reports that report it.

Other than restoring America's respect and trust throughout the world, particularly in the middle-east and South America, I don't know what any presidential candidate can do to lower market prices.

This editorial message can't be serious if the author really believes government should intervene in free enterprise to lower prices - so long as it doesn't involve Social Security, health care or taxes.

Speculators Riding A Broken SeeSaw

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Is oil worth $89 a barrel OR….is our dollar just worthless.

There really hasn’t been much going with the global oil supply. No hurricane or pipeline explosions, no tankers grounded in some pristine wildlife area, and with most of the heavily populated industrial northern hemisphere entering the “slow” season, no heavy petrol demand. Yeah, there's a problem between the Turks and the Kurds but it involves Iraqi pipelines. Tensions are rising, but isn't there a war going on over there? I mean, if we believe all the war hype....how much worse can it get?

But what has changed dramatically over the past two years is the global supply of the U.S. dollar. The Iraq War arguably has dumped a couple hundred billion dollars into the mid-east economy with almost no accountability.

Oil Hits New Record:
Many analysts argue that the supply and demand fundamentals don't support oil in the high $80 range, and believe speculative investing is the real culprit behind high oil prices.

Add to this the recent housing mortgage lending crisis and the Fed literally pumping tens of billions into the domestic economy, the lowering of interest rates and the return to easy money. Simple laws of money supply and demand. I'm barely scratching the surface here.

If Dollar Free falls, then what?:
If the dollar trend continues spiraling downward, the risk is that nations like China – or Japan or Saudi Arabia – which have been buying U.S. Treasury bonds and thereby funding America's deficit, would stop that practice.

This is one area where American officials disagree. Many think that China and the others wouldn't dare trade in their Money Bonds on the low.

The U.S. dollar has fallen in value against five major currencies, the Japanese Yen, the Euro, S.Korean Won, British Pound and the Canadian dollar. For the first time in over 30 years, the Canadian dollar is equivalent in value to the U.S. dollar all the while President Bush seems unconcerned or oblivious. The high price for oil may have less to do with the global oil markets and more to do with global financial markets, particularly the value of the U.S. dollar. It’s going downhill……fast.

Read additional:U.S. Currency Strategy With China

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Healthy Wisconsin Revival
Well……that settles that. Now that the Assembly Republicans wouldn’t pass a state budget even without Healthy Wisconsin, we know that wasn’t the problem. Now is a good time for Senate Democrats to re-introduce it.

Big Oil Knows Which Cow To Milk

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This headline caught my eye.

Dean Foods cuts forecast as milk prices soar

I became suspicious after reading this and thought how come we never saw the headline, “Exxon cuts forecast as oil prices soar.”

Dean Foods Co., the biggest U.S. milk processor, cut its profit forecast for the second time this year because of soaring raw-milk costs and lower prices for organic dairy products. The shares fell the most in a month.

High costs never stopped Big Oil from turning in record profits. Ok, besides milk being a perishable, there are other differences between the two industries but, high raw material costs are high raw material costs no matter what you're trying to sell.

Throughout the article, I substituted the word “milk” with “oil” and “diary” with “refinery” and wa-la. For some reason, the milk industry and the oil industry seem to work off of two completely different business theories. Sure, I know this sounds elementary but in one industry, high raw material costs lead to losses, while in the other, high raw material costs lead to record profits.

"Supplies are going to be tighter because when the weather heats up you don't get as much production from your cows," said Peter Turk, a dairy trader with Rice Dairy LLC in Chicago. "The market is going to be higher."

When Big Oil blamed the weather (hurricanes) or shortfalls in production (pipelines bombed or refineries shutdown), not only did the price of gasoline skyrocket, but so did the profits. Why should Big Milk be any different?

"It has become increasingly likely that conventional raw-milk prices will reach all-time highs by the third quarter," Engles said in today's statement. "We expect this steep rise in dairy costs to put pressure on Dairy Group profit growth, especially in the second and third quarters." Prices already are at or near records.

High raw material costs along with higher distribution costs coupled with inflation usually lead to fewer profits – unless - you’re Big Oil.

Big Milk should deal with higher raw material costs like corporations deal with taxes on profits – just pass them onto the consumer. Expect milk prices to reach record levels.

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.

Poor Direction For Cheap Fuel

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The March 3rd Janesville Gazette editorial titled ”Focus on fuel economy is critical here,” was an exercise of the usual talking points blaming either tough emission standards or labor unions (liberal policy) for the poor mileage American vehicles squeeze out of a gallon of gas. But they failed to explain the very reasons why Americans should want better fuel economy in the first place. In fact the only reason we are having this discussion is not because we are dependent on foreign oil, it’s just because gasoline prices are both unstable and high.

We seem to be under the impression that better average national fuel economy means traveling costs per mile will drop when indeed nothing could be more deceptively false. It also seems to hold that if American vehicles suddenly doubled their average mileage per gallon from 20 to 40 overnight, thus cutting consumption in half, the price of a gallon of gas should plummet because of the huge, huge gasoline glut. True supply and demand results. But we know that’s not how things work with Big Oil and chances are more than likely that the price of a gallon of gas would double, refineries would close from severe under-capacity and we would be exactly where we are today – production on a tightrope and a near doubling of their all infamous 9% profit margin to 15%. Sure, this would help cut greenhouse emissions but Americans want better gas mileage NOT to save gas or cut emissions, they want it to save money. They won’t save money with the current greedy Big Oil corporate policies.

When the Republican base or Bush enablers discuss our current situation with high gasoline prices they first bring up the principle of supply and demand. Low oil supply and high global demand equals high prices. Simple law of economics they say. Except that there is NO shortage of crude oil, the crude oil arrives here, the (high) price is paid – no shortage. If they are corrected in their choice of words that we have what appears to be deliberate manipulation of gasoline production, they immediately cry foul and reply it is because Democrats, liberals and environmentalists have banned new refineries or made them cost prohibitive. Too expensive to build with all those environmental protections they say. But if they can’t build a single new refinery while they are reaping the largest profits known to mankind, it’s obvious they never intend to build one at all – ever. In fact, Big Oil is elated that they have someone to blame other than themselves for the lack of refineries. When in truth, environmentalists have demanded stricter smokestack emissions and other refinery standards simply to protect human health and the general environment. Bush wants these refinery standards dropped in the name of lower costs to the oil companies, not lower gasoline prices, which means even greater profits and of course, filthier air.

This is the wrong direction to take and it is actually hurting the economy and job creation. Here’s why. When liberals convinced Congress to enact strict pollution standards on automobiles in the 70’s, the car companies vehemently opposed the change and said it would be too expensive. In 1975, anti-environmentalists and liberal bashers warned that a new car with a catalytic converter would hit your pocketbook an additional $400. But what happened back then? Whole new industries were developed to design and manufacture EGR valves, pollution pumps and expensive platinum catalytic converters. People paid the price to get cleaner air even if it meant worse gas mileage. But, thousands of people were put to work. Contrary to mainstream beliefs, environmentalist policies created jobs. We gained all around with cleaner air and jobs that never existed before.

Similarly, today’s argument seems to be centered on making vehicles more fuel efficient and again, corporatists and anti-liberals use the same old talking points from over 30 years ago.

JG Editorial Excerpt:
The goal would also hit your pocketbook. Use of expensive technology would cost you $1,300 more for a car and almost $2,000 more for a truck.

The GOP and their supporters are holding up the same progress to build energy star cars and new clean refineries with chimney scrubbers, catalysts and particulate recycling, primarily because their base wants it this way. The oil companies know whether they build new refineries or high mileage cars, the results will be the same. Production on a tightrope will end and they will have to earn money the old fashioned way, not by price gouging under the guise of tight supplies and fear. Need I say more? America needs new leadership with fresh ideas….. if not, it’s like they say, you may as well get used to it.

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.