House Democrat(s?) Call for Nationalization of US Refineries
Posted by Prof. Goose on June 18, 2008 - 6:00pm
http://www.foxnews.com/urgent_queue/index.html#a54ef44,2008-06-18 (hat tip: Drudge front page)
My impression of that report was that this was a group of House Democrats standing at a podium talking about the days' events in the House. For Rep. Hinchey to say what he did when he did could be taken as representing the opinions of the group of speakers, which may have been representing the Democratic Party at the time--and he was not corrected by the others speaking. We would need to know more in what capacity Rep. Hinchey was speaking, etc., etc.
Rep. Maurice Hinchey (D-NY), member of the House Appropriations Committee and one of the most-ardent opponents of off-shore drilling (at 1115 said): "We (the government) should own the refineries. Then we can control how much gets out into the market."
{...} House Democrats responded to President's Bush's call for Congress to lift the moratorium on offshore drilling. This was at an on-camera press conference fed back live.
{...} Among other things, the Democrats called for the government to own refineries so it could better control the flow of the oil supply.
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
I just sent an email to JHK, with this story. The subject line was "Exponential Growth in Delusional Thinking."
It is going to be a very interesting political season, with both parties pretending that we can have an infinite rate of increase in our consumption of a finite energy resource base.
There is of course a simple reason for the rapid increase in oil prices: Importers bidding for declining oil exports, but it's not a reason that either party wants to hear.
Big problem: there have been a few cases of refinery capacity being manipulated for profit. Yet Democrats want to seize on such examples to as proof that the larger part of the run up in prices is because of dirty capitalists rather than anything fundamental to the market. Part of the bad faith in markets downstream from Enron, and from Exxon being more concerned with propaganda than truth. Too many Democrats don't trust that business is honest about anything anymore, especially in where it finds its profits. Therefore profit itself is taken as evidence of crime.
This is idiotic. But it's what happens when businesses have too often been too dishonest, and an opposing party has few in it who deeply understand business or economics. (And I'm a Democrat saying this.)
With current crack spreads, many oil companies might be well advised to sign over title to refineries for one dollar.
Westexas,
Makes sense to me. Refineries are no longer making money, and don't look like they will in the future, and oil companies would be well suited to dump these giant fixed expenses, huge infrastructure maintenance, and money losers onto We The People for their upkeep and care. Upstream is still profitable. The oil companies are learning from/jealous of the banks--dump the losses on the backs of the people and keep the profits for the few.
Ugh. If this is true, then the debate just went from stupid to idiotic. Who stole our Capital and replaced it with the animal farm?
Edit --
Come on guys! You must consider the source. Fox News??? You'll need secondary and tertiary verification along with a de-spin doctor just to tell truth from BS.
Coming from Fox, I'd bet there's about as much truth in this as Chinese drilling 60 miles off the Florida Coast.
Rob out...
Well China is only *planning* to drill there, having bought the rights to it.
So that would make it a what ... 90% true ? 95% ?
It certainly is not a false statement that China is drilling 60 miles of the florida cost, they certainly are at 100 miles, and have "reserved the right" to drill at 60 miles.
http://ap.google.com/article/ALeqM5hwl7MBs14OAtZbu1YJe8l-X7O8vAD91906B80
You'll have read through the "weeeeiiii this can't be true" socialist drivel though.
Article doesn't quite say what you suggest. The UM "expert" they quote says "Cuba has awarded offshore oil leases, or concessionary blocs, in its offshore waters to six oil companies — none of them Chinese..."
And then the CSIS "expert" says "Sinopac, has conducted exploratory drilling on a lease on land in western Cuba, but is not involved in the offshore development."
Seems pretty clear to me. But you can continue with your "neo-con" drivel if you like.
I wrote my US Senators several months ago with this proposal. The US energy sector has been abused and has lost all credibility with US citizens. To stand by and let private individuals dictate how and gas are sold to Americans while simultaneously allowing them to corrupt our political process is wrong and is a recipe for disaster. The harm done thus far will take decades to fix.
When this administration is out of office I anticipate you will see one of the largest criminal investigations in US history. At this point there are not enough US attorneys to chase down all of the crooks...most of whom are from Texas.
What should the architecture of this new US Energy Department look like? Well it doesn't take a rocket scientist to hammer out something that is better than what we have now. Below are some of the basic elements:
1. Oil and gas refineries will be nationalized and staffed by qualified private contractors.
2. An independent, bipartisan US Energy committee shall provide transparent oversight of all US refineries and their associated activities. This committee shall be comprised of:
a) Bipartisan team from the US House and Senate
b) 2 Independent industry professionals
c) 2 Independent environmental professionals
d) 2 Appointed members of the EPA
No members of the US Energy committee shall have any vested interest with contractors, which includes ownership in stocks or other corporate assets.
3. Like other government contracts the contractors shall be required to transparently bid for work including exploration, refining and distribution contracts.
4. The US Congress shall authorize funds for exploration, imported fossil fuels, refinery maintenance and new refining capacity.
5. In the event of a national emergency the President of the United States, with the consultation of the US Energy committee, shall be authorized to spend emergency funds appropriated by Congress to address a national emergency.
6. A significant percentage of profits earned by the US Government on the sale of refined fossil fuels shall be invested in renewable energy programs backed by the US Government including solar, wind, nuclear, hydroelectric power.
7. A US Energy Truth and Reconciliation committee shall be established to address and resolved grievances brought by the public against private US energy contractors and their subsidiaries and affiliates. When criminal activity is discovered the US Attorney General shall assign a US Attorney to investigate and prosecute in federal court.
8. For criminal cases brought by the US Energy Department against foreign companies and citizens, the International Criminal Court (ICC) shall hear each case and prosecute according to international law. If US Citizens are harmed by a foreign company or individual they shall be charged and tried in US Federal court.
Such a structure is long overdue and brings some honest solutions to Americans, our political process and the global environment. Anything less is irresponsible reckless behavior.
Being the caplist pig that I am, I shudder to think what a government run oil industry would tune into. Take a look at Mexico and see what is happening to their Pemix. The government used it as a cash cow and now they don't have enough money to go for their GOM areas. They spent it all on geegaws and jimcracks to keep the fat cat politicians reelected.
9. Establish a bipartisan commission to determine which Laws of Nature to repeal:
http://www.glossynews.com/artman/publish/laws-of-nature-repealed-1291.shtml
Too bad that the US doesn't want to participate with the ICC (too many candidates for prosecution is the reason, I think).
I like my suggestion from yesterday. The US government should take over the refineries. Let the oil producers decide how much they want to charge for oil input and let the US citizens decide how much they want to pay for gasoline. Think how popular the government will be! The government clearly has infinite capacity for debt.
I also like Westexas' idea. Lets vote on the laws of nature. Clearly, some of the laws of nature just aren't being cooperative. We need new ones. National security is at risk (not to mention my ability to drive my SUV)!
most people are not that rational
they make decisions based on fear.
Callapse or chaos is he path of least resistance.
things more likely to get worse after the election no matter who wins.
"Nationalise the refiners"
"An independent, bipartisan" like the wonderful bipartisan CAFE standards perhaps that have been designed to allow the car companies to evade the restrictions???
"Like other government contracts the contractors shall be required to transparently bid for" like blackwater perhaps???
"the President of the United States ... shall be authorized to spend emergency funds" like the Iraq war has been funded for the last 5 years perhaps??
"A significant percentage of profits earned by the US Government" the government can't even make a "profit" from the taxes it takes to pay for the expenses!!
If this is typical thinking in the US then you are all stuffed, you must have been swallowing stupid pills by the barrel. Get real, something like 5% of the world's population is using 25% of the world's oil and you are complaining at paying only $5/gallon.
Land of the Free? I have never seen so many stupid restrictive union rules as when i had a stand in the US nor such a useless bunch and i have done this all over the world e.g. build a stand without any electric supply and at such a high price.
Re: "Exponential Growth in Delusional Thinking."
http://www.nytimes.com/2008/06/19/opinion/19evans.html?_r=1&oref=slogin
OP-ED CONTRIBUTOR
Sue OPEC
By THOMAS W. EVANS
Published: June 19, 2008
I wonder how many US corporations are in violation of other country's pollution laws? Lets just make it so everyone in the world has to obey every country's laws, all at the same time, no matter where they live.
Both the onset of peak oil and the onset of widespread idiocy are occuring faster than I expected.
Shargash - if you believe the onset of idiocy is only now coming on fast, you haven't been paying attention. We've been fully functioning idiots for quite some time now, at least since the onset of civilization ;-).
and then they stop selling oil in dollars and use euros instead.
Hi WT,
Maybe we have moved beyond denial - there's plenty of oil out there; to anger - why aren't those bastards drilling/refining our way out of this?
Next stop - bargaining; how about if we nationalise the drillers, refiners..??
For a good explanation of why we can't have continued growth of pretty much anything watch Dr Albert Bartlett, it's an hour long but well worth watching IMHO
http://video.google.com/videoplay?docid=4364780292633368976&q=Dr.+Albert...
How would government-owned refineries "better control the flow of oil supply"? I understand the logic of many of the bizarre proposals, such as coastal drilling and investigations into the commodities markets, but this time I don't even understand the logic.
Does "better enable us to enforce future rationing of oil products" sound better?
Yes. Much clearer.
No worrys!
After nationalizing the refineries, Congress will simply nationalize all the Oil companies, then the Auto and truck factories, the farms, all US companies. We'll all just become gov't employees. Whats wrong with a little social nationalism, Comrade?
Nastrovia!!
Brilliant. Just f*cking brilliant. Tell me something peeps, what is it that the current liberals are thinking? Can this behavior be explained in any rational framework? Windfall profits taxes, nationalizing the refineries, suing opec, STILL opposing drilling, STILL opposing nuclear, did ANY of our leaders even TAKE econ 101?
The windfall profits tax makes some sense. It discourages investment in pointless exploration. We would do better though to discourage that by instituting such strong rationing that we can keep ahead of both expected world production decline and demand growth elsewhere so that our transition off of oil can be done at $20/barrel. http://mdsolar.blogspot.com/2008/06/oil-is-too-expensive.html
Chris
The windfall profits tax erodes property rights. Property rights are one of the corner stones of our society. Business that purchase land and drill,and extract oil are taking a risk if things don't work out. If they do work out, then they get the benefits.
Rather than try to erode property rights as a way of justifying a failed energy policy, let's actually make an energy policy that makes sense.
Reward those companies that invest that money into the things we want with tax credits, rather than punishing them for doing what is legal.
And get rid of "giving away" government owned mineral and natural resources to private companies for low lease rates. The government should make a profit on mineral extraction from public lands, instead of treating it as a way of rewarding political contributors.
Mike
Actually, no. Taxes are are way of acknowledging ownership. They support property rights.
You'll see that I support more direct action (rationing) to remove the profit from the oil business, but it is OK to remedy imbalances using a tax. Commercial property is sometimes taxed at a different rate than residential property or church property. Commercial property can put more stress on government services, for example. Oil companies seem to be stressing fuel assistance programs just now so it can make sense to do something about that. But, the main thing is that we need to discourage exploration for oil worldwide and the windfall profits tax is not the instrument to do that except domestically.
Chris
Mdsolar, or Chris if I may,
I cannot tell if you are actually advocating the WPT or if this is sarcasm.
Why should we impose a tax on the people who own the only production we can count on, that being domestic? (Yeah, let's make the folks here at home pay and send the other 72% of the cost of the crude oil we waste daily to NOC's which support terrorism.)
Further, would you then advocate imposing a WPT on all areas of our economy which have had extraordinary jumps in profits, such as the jump in agricultural product prices, and on precious metals, and on phosphate?
Or is it some bias against the people who are somehow invested in the oil and gas industries which make you want them to support the part of government programs you prefer?
I still eat those $8.00 beans from time to time, just to be sure that I don't forget how much I sacrificed when oil prices were extremely low and nobody stepped up to help me. Ergo, why should I help you, or the recipients of the fuel subsidy programs - just because I "can"?
"Don't tax you, don't tax me, tax that man behind the tree." by Molly Ivins, then of the Fort Worth Star Telegram
Chuck
If you look at my link, you'll see that I suggest rationing rather than a tax. http://mdsolar.blogspot.com/2008/06/oil-is-too-expensive.html
Nobody expects you to help out with fuel subsidy programs at all. You are exepcted to pay lawful taxes. How those taxes are used is a different (lawful) process. I point out in the link that the windfall profits tax does not do enough to discourage exploration for oil.
I don't see why you would be upset about slim returns on oil investments. Oil is supposed to be cheap. If it isn't, it is a waste of effort. Large profits show that the market is not working to allocate our efforts to obtain energy efficiently.
Chris
Further, would you then advocate imposing a WPT on all areas of our economy which have had extraordinary jumps in profits,
Ok, the subject is 'profits'
such as the jump in agricultural product prices, and on precious metals, and on phosphate?
Now you jump to prices?
So which is it? Price or profit?
You have obviously seen the light, which was never recognized by the earlier WPT regulations which were imposed - they imposed a tax on oil production, irrespective of any profits. Then, once the government had your money, levied at a rate of approx 30% of the sales price, you could endure the tedium of getting it back by completing a stack of paperwork for each lease for each check you received for proceeds. In many cases, it doubled the administrative cost for the taxpayers. This is probably why the latest proposed levy concentrated, for now, on the five largest oil companies. They have the layers of personnel and capability to produce tons of paperwork, or hopefully e-paperwork so we can have some trees to use for fuel when the oil runs out.
It simply makes no sense to tax only the oil industry when prices rise, and leave any impression that this is a tax. A tax, in a fair system of taxation, would be levied not just on one industry but on profits, or sales, across the whole economy, or what is left of it. If we are to levy this tax on all producers, then the whole world needs to levy that tax. If it is going to be on profits, then let producers know the method to be used to make that determination, and file the returns, for all of the industries impacted, like farmers, potash producers, and oil producers, just to name a few.
If PV solar panels, SDHW equipment, and solar space heating become really popular, and extraordinarily profitable, will we impose taxes on that industry as well?
In all honesty, if this is a true party statement, both the libs and the conservatives have lost it. Republicans think they can drill their way to energy independence, Democrats think they can achieve it through government control. There's a huge leap between rational legislation/regulation and nationalization.
And why would you expect them to act any differently on this issue than they have on nearly every other issue?
We are still in the Denial stage of confronting the problems...
Tell me something peeps, what is it that the current liberals are thinking?
They want to appear to be doing something.
Can this behavior be explained in any rational framework?
A nation can withstand stupid moves like 'nationalize gas'. It can't withstand its own laws being debased.
What I don't understand is why, at this moment, people are 'upset', when there have been so many other reasons to be pissed.
"What I don't understand is why, at this moment, people are 'upset', when there have been so many other reasons to be pissed."
Maybe because this is affecting people directly and makes them change their lives?
Take as an example the funding the Iraq war, borrow money instead of raising a war tax. Hey presto no real pain there then since it's tomorrow's problem.
Got no money, no job - no problem take out a ninja loan buy a house and cash in, can't go wrong can it.
Please don't confuse your particular beliefs with truth. Argue all you want against the ideas presented, but to assume that you are the "rational" one when all those who have different ideas are just uneducated says more about you than them.
suing opec is stupid
but as bad as the dems sound
repubs. are just as bad.
it's dumb and dumber
umm... well, if you actually read the "drill" speech you'd see that W said the following.
"In the long run, the solution is to reduce demand for oil by promoting alternative energy technologies. My administration has worked with Congress to invest in gas-saving technologies like advanced batteries and hydrogen fuel cells. We've mandated a large expansion in the use of alternative fuels. We've raised fuel efficiency standards to ambitious new levels. With all these steps, we are bringing America closer to the day when we can end our addiction to oil, which will allow us to become better stewards of the environment."
Okay, the merits of hydrogen are limited, but it is an acknowledgment from W that oil isn't infinite. It's an acknowledgment that drilling is a temporary fix.
Frankly, the repubs are enormously better (still not good) on matters economic and energy. The dems are enormously better (still not good) on matters social and diplomatic. They both violently oppose the only areas that the other does well to the point that we get the worst of both worlds.
Frankly, the repubs are enormously better (still not good) on matters economic and energy.
So attempting to live within your means (tax and spend) is worse than borrowing and spending?
Go ahead. Show how borrowing, taxing and spending is better management than plain old taxing and spending.
The only appropriate response to strawmen is to point them out, so here it is. No one supports borrow and spend as a policy outside of short-term applications of keynesian economics. Not republicans, not even W. The don't tax but spend anyway is the result of liberals and conservatives fighting over the same piece of cheese, the liberals will not stop spending regardless of where the money comes from, and the republicans want lower taxes even if it means that there is no acceptable source of funding for liberal spending. It is not the republican platform in any way, nor does it reflect the realities of republican policies. The actual Republican party line is "don't tax OR spend".
Anyway, thank you for yet another rhetorical attack devoid of substance or validity. Keep them coming. I am enjoying this!
No one supports borrow and spend as a policy outside of short-term applications of keynesian economics. Not republicans, not even W
So I can accept YOUR claim, or I can look at the history of the borrow, tax and spend actions. You are just some name on a website. The voting record and the budget of the US of A shows your claim is not backed by reality.
fighting over the same piece of cheese
Perhaps this is the source of your public display of ignorance, you are confusing dairy products with borrowing, taxing and spending.
It is not the republican platform in any way, The actual Republican party line is "don't tax OR spend".
That is what is said.
And yet:
nor does it reflect the realities of republican policies.
To claim such is a lie. Unless you are talking about Ron Paul. And the Republicans had a chance to choose him, yet went with McCain.
About the cheese thing: funny. This is why I still bother to lay the smackdown on your lies, you amuse me.
here's the federal budget by department
http://www.federalbudget.com/
You will see clearly if you look even a little that the dept of HHS (purely a democrat horse) spends MORE money than the DOD despite being involved in wars at the time. You will also see that the departments of agriculture (primary line item food stamp distribution), education, and HUD, all democrat horses, consume another 75% of the DOD budget. Then there's social security, started out as a democrat horse, got looted by democrats for medicare, and now it's passing the buck to treasury.
It is also worth mentioning that under the current scheme, cutting spending is virtually impossible, there is no federal activity that can be curtailed without lawsuits and opposition from the federal employees union and recriminations from all the beneficiaries, so the don't spend position has problems.
http://www.stateline.org/live/details/story?contentId=86486
"Bush budget cuts education" opposed by dems.
http://www.jointogether.org/news/features/2004/budget-cuts-federal-rules...
"Budget Cuts, Federal Rules Threaten Addiction Funding" opposed by democrats.
http://www.childrenshospitals.net/AM/Template.cfm?template=/CM/ContentDi...
"Bush Budget Cuts Federal Health Programs Vital to the Health of All Children Nearly $19 Billion in Medicaid and Discretionary Spending Cuts"
opposed by democrats
http://www.nytimes.com/2008/02/06/arts/06cuts.html
"Public Broadcasters Prepare to Fight Federal Budget Cuts"
http://www.cbpp.org/2-4-08sfp.htm
"FEDERAL GRANTS TO STATES AND LOCALITIES CUT DEEPLY IN FISCAL YEAR 2009 FEDERAL BUDGET" Guess what... opposed by democrats.
http://www.ombwatch.org/article/articleview/3241/
"Of the three reconciliation measures, the budget bill has been the most contentious, due to cuts it makes to programs serving low- and moderate-income households, cuts that ultimately do not address the burgeoning deficit. In fact, the net effect of the three bills will be an increase of the deficit by billions of dollars. The cuts are particularly harmful to Medicaid, child support enforcement, foster care, and student loans programs."
http://findarticles.com/p/articles/mi_qn4200/is_20050606/ai_n14657367
"In fiscal year 2006, the New Orleans district of the U.S. Army Corps of Engineers is bracing for a record $71.2 million reduction in federal funding."
http://seattlepi.nwsource.com/local/316190_workcuts18.html
"Federal budget cuts to hit job training"
http://www.wlox.com/global/story.asp?s=7618654
"Federal Budget Cuts Slice Into Crime-Fighting Cash"
http://www.mediamouse.org/features/020608bush.php
Bush's 2009 Budget would Cut Federal Funding to Michigan
http://useconomy.about.com/b/2007/02/14/us-federal-budget-cuts-social-se...
Federal Budget Cuts Social Security and Medicare $56 Billion in 2012
http://news.yahoo.com/s/afp/20080531/hl_afp/ushealthcancerbudget
Consistent reductions in US federal budget allocations for cancer research that have been implemented since 2003 threaten to undermine recent gains in the fight against the disease, scientists said.
http://www.kxii.com/home/headlines/13024282.html
Federal budget cuts affecting local drug task forces
I still bother to lay the smackdown on your lies
That is what I do to you, yes.
Your confusion over pronouns is noted, for the record however.
As the bard says - Brevity is the soul of wit
http://www.cedarcomm.com/~stevelm1/usdebt.htm
The graph shows the increase.
That was Classic Eric! just lie and lie and lie some more, then when you're caught, throw out some obfuscation! BRAVO!
As for the debt, yes, it has increased in this particular administration, but the question is why. The causes are of course more complicated than you seem to be able to comprehend, so I will leavy your ignorant simplemindedness in peace and not disturb you with facts.
Anyway, sparring with you has lost its appeal for now, so sulk in good humor.
just lie and lie and lie some more, then when you're caught, throw out some obfuscation!
Yes, that is what you do. Understanding you have a problem is the 1st step toward correction.
Next thing ya know, you'll be saying how you are having trouble voting for McCain for President.
BRAVO!
Ahhh, your ego shows how you clap for yourself yet again.
As for the debt, yes, it has increased in this particular administration,
And yet you can not say 'yes I was wrong'.
The growth rate increased during Reagan and Bush the Greater due to borrow, tax and spend.
I'll review for the people who wont click on the link.
Johnson’s average was a debt increase of 3%
Nixon 5%
Ford’s 17% his first full year and 13% his second
Carter average of 9%
Mr. Reagan 200% increase. (I believe Bush the Greater called his plan voodoo economics)
George Bush Sr. 11.8%
Clinton growth of the debt down to 0.32%
The 'money shot'
The last year Mr. Clinton was in office the nation borrowed 18 billion dollars. The first year Mr. Bush II was in office he had to borrow 133 billion
Borrow, tax and spend. It is what the modern Republican does.
Anyway, sparring with you has lost its appeal for now,
Ahhh the old tuck your tail and run away as you have been bested yet again trick. You might try to not hold such wrong thinking in the future, it would allow you to stop needing to run away in pain when you get so obviously schooled.
Interesting. It just occurred to me that we've spent this entire thread discussing taxation and government spending when my original comment was that republicans are better at the ECONOMY, which is a distinctly different item from government fiscal policy. That was a truly excellent job of misdirection, I applaud you!
discussing taxation and government spending
BORROWING taxing and spending. For some reason you keep forgetting the borrowing.
when my original comment was that republicans are better at the ECONOMY
ECONOMY?
That was a truly excellent job of misdirection
Your attempt at claiming something different is noted. This is called 'being a liar' by normal people.
e·con·o·my [ i kónnəmee ]
noun (plural e·con·o·mies)
Definition:
2. financial affairs: the production and consumption of goods and services of a community regarded as a whole
(as a whole - that would be borrowing, taxing and spending.)
[15th century. Directly or via French< Latin oeconomia< Greek oikonomia< oikonomos "steward of a household" < oikos "house" + nemein "manage"]
ec·o·nom·ic [ èkə nómmik, kə nómmik ]
adjective
Definition:
1.the economy or business activities of a country
(business activities of a country - that would be borrowing, taxing and spending.)
[Late 16th century. Directly or via French< Latin oeconomicus< Greek oikonomikos< oikonomos (see economy)]
If we were to take the country to BE the government, that would be correct, but the country is not the government. The country is the country. The government is one part of the country.
The delusion that the government is the economy, or even is the prime mover in the economy is one of the dangerous delusions of our time. The economy consists of raw materials producers, energy producers, farmers, factories, freight haulers, goods distributors, importers, exporters, shop owners, banks, etcetera. And the government.
The prime mover in the economy is either industrial activity or end users depending on who you ask. Either way, job creation and increased industrial output is the primary measure of the health of an economy. It is very very clear that republican policies are far superior at treating capital well, which is how one keeps it.
I am willing to concede that as things stand in light of the fixed nature of all government expenditure, that tax cuts can only be expressed in increased borrowing. I am also willing to concede that tax cuts are part of the republican platform. I would still question the notion that "borrow and spend" is the intended result, the impossibility of not spending is a little surprising.
I do not believe there is a bill on the floor of the House calling for a take over of the oil industry by socialist revolution. Based on the way the government is handling Iraq and Afghanistan; I do not believe the government has any right to meddle with multinational oil companies that are owned by people all over the world. Communism failed in North Korea, Venezuela is experiencing double digit inflation, The U.S.S.R. had to accept reforms to allow some private ownership, China and India are two of the fastest growing economies in the world as they allow private ownership of company stocks.
I think the government has shown mismanagement by establishing unrealistic biofuels quotas that are not lowering the price of fuels. The fact that oil prices are high are also due to years of deficit spending, inflation, years of minimal efforts by the public to conserve gasoline as is shown by the number of SUV's on the road, and excessive environmental and OSHA related litigation.
The government should allow the people to own stocks in their IRA and 401K plans and to establish industries by pooling money and talent and forming corporations to compete in a free market economy. The government should be a good steward to provide the roads, bridges, public schools, court system, police protection, highway safety, social security and medicare, public housing, food stamps, defense, the IRS, etc.
Funny how you don't mention Norway; a state where the government intervened and now gets close to 100% of electricity production from renewables and is the 3rd largest exporter of petroleum. Not to mention the standards imposed on energy efficiency as it pertains to transportation. Nor its ridiculous living standards.
Please spare the neocon drivel about Venezuela. European style socialism is not red fascism aka communism. Your claim about Venezuela's inflation rate amounts to a lie:
Plot of Venezuela's CPI since 1995
Chavez was elected in 1998 and the inflation rate improved vastly during his tenure. The 2003 PDVSA disruption by the oligarch crony union caused a disturbance that has settled down.
M2 statistics
Venezuela's M2 is growing at an average of 31.5% per year but the inflation has been at and below 20% until only this year (it is now 30%). Real GDP growth has been over 7% after the 2003 disruption.
GDP growth plot
Monetarist prattle does not good economics policy make. For the majority of Venezuelans and the economy as whole Chavez's socialism has been a good thing. The oligarchy and its adherence to IMF monetarist voodoo only brought high inflation and poverty.
Thanks for getting there first. Considering its booming economy, the rate of inflation is being managed quite well by the Bolivarians.
compete in a free market economy.
And when you find one of those, can you post a link so we can all see what they look like?
The government should be a good steward ... the IRS ....
I'm betting most people would not see 'good steward' and IRS together.
http://www.somethingpositive.net/sp06082008.shtml
Unfortunately most of our leaders did take Econ 101, that is the problem.
Superstition based economic systems such as capitalism (continued expansion in a finite system) do not promoter critical thinking. The invisible fist of the market just beats up anyone who questions growth, consumption, etc.
What we need, as a dharma teacher of mine so aptly stated, 'was a great leap backward" when it came to "growing our economy".
just a question...can we have capitalism without growth?
Well.. AIUI, yes, however, it has problems. Primarily that the wealth has a tendency to concentrate over time and without growth, that concentration can tend to go to irrational extremes.
Capitalism as far as it goes does not require growth, theoretical constructs work well enough in the absence of growth, with some shifting as new developments happen. The BIG problem is that it has never really been tried. If everything goes very very well in the next few decades, we will see the move from the "cowboy economy" where everything is about growth and expansion into a limitless world to the "spaceship economy" where everything is focused on effective utilization of limited resources. That is NOT an easy move.
Unlikely. Please peruse some of the links at this search and consult the work of Herman Daly and David Suzuki as starters.
No. At least not in practice, and certainly not in its neo-liberal reincarnation. In theory, anything is possible.
I seriously doubt this is a pertinent question for the next century. We're not short of resources/space to fuel growth for a while yet.
This will be Jimmy Carter redux. We soon will have shortages, especially if Congress gets into the act but especially if Obama is there too. I was there in '73 and '79.
We already have shortages; it's just that is mainly applies to the poor. Anyway, we cannot control the price of oil although, arguably, it was more feasible back when we produced most of our oil.
It is true that the Government could increase the refinery utilization if they took over the refineries. This, however, would only result in lower prices to the consumer if gas were subsidized to take care of the crack spread.
The classic argument against meddling with the market is that we will have shortages. While probably true, we are going to have shortages regardless of what we do vis a vis the market. What is needed, however, is not to "fix" the oil/gas market but to get away from it. We don't need to be giving the oil companies incentives to steepen the other side of the supply curve.
The market has done us a favor by driving up gas prices; something that should have been done long ago by taxation. Unfortunately, most of that price still goes overseas.
Nixon's wage and price controls caused the shortages associated with the 1970s oil shock. Carter's policy was to ration by price, which is today's method.
So how large is the crack spread on gasoline and diesel these days?
If we had a combination of low utilization and a high crack spread, this sort of thing could make sense.
Comparing current wholesale gasoline prices to spot crude versus May, 2007, and ignoring refinery gains, it looks like the crack spread in May, 2007 was about 75¢ per gallon, versus about 23¢ now.
If we had the same crack spread now as we had in May, 2007, the retail price of gasoline would be averaging close to $4.60 or so per gallon nationwide.
This contains an excellent explanation on the subject:
Seeking Alpha - Tracking Crack Spreads
Actually this sort of policy is probably the first phase of what peak oil will look like--more government control/ownership of limited resources in an attempt to stem off the inevitable:
I would also look for:
1. more restrictions on oil futures trading
2. nationalization of U.S. oil companies (laugh now but when oil hits $300 a barrel...)
3. changes in water rights ownership
4. national security arguments superseding any environmental laws for drilling, etc
5. mandatory rationing-think WWII ration cards, except more techie
the list goes on
I've been thinking about a trend of centralization for a long time, I just never thought it would come this quickly.
May you live in interesting times.
(I would love for there to be a day soon when I could come to TOD and not think that f-ing trite-ass saying in my head--hasn't happened yet.)
The nationalization of all important resources and resource processing...coming to a country near you. All it takes is one or two of the big guys doing it (like Russia and the US) and it will become a worldwide fad.
This Fed takeover of important economic processes could also lead to outright conflicts with States that stand to lose in-state dollars from the private ownership taxes and employment.
As the Fed tries to grab more control and power over the States, the States will buck back. Who will win? How far will it go? Time will tell...
There are two paths we can take in the face of energy scarcity. We can "regress under stress - revert to a more primitive level of function." or move to "repressive and conformist hierarchies, morally objectionable but efficient allocators of limited resources" (From Into the Cool, Energy Flow, Thermodynamics and Life) I would add, the two are not mutually exclusive.
...
5. mandatory rationing-think WWII ration cards, except more techie
the list goes on
I would add
6. capital controls (to prevent capital flight)
7. confiscation of precious metals
8. mandatory conversion of a portion of IRAs and 401ks to new government bond issue--called something like Patriot Bonds--paying rates well below real inflation.
9. expanded police state powers
.......
10.Debt Default.
11. Rebellion/Insurrection
12. Civil War
Your #6 is too funny. How about renationalization of previously sold-off assets to cover US debt?
Your #6 is too funny. How about renationalization of previously sold-off assets to cover US debt?
Why not? Hugo Chavez could be consultant.
One good about the Civil War : it will get the troops back from the Middle East. Indeed, it will take something like this.
Ah, but which side will they come back to fight on?
All 3/4 sides, or maybe 50 sides?
"5. mandatory rationing-think WWII ration cards, except more techie
the list goes on"
This one I think could be an essential step in realistically and fairly addressing our energy/climate situation. In my opinion the best thought-through model is TEQs, which was devised by Dr. David Fleming, who first wrote on peak oil perhaps thirty years ago now.
It's being seriously discussed over here in Britain, and while rationing has a bad name, it doesn't deserve it. Rationing doesn't create scarcity, it simply fairly distributes what is available. The default option of 'rationing by price' in times of shortage is both ugly and unpopular.
The governmental 'soit disant' elite took econ 101 but they didn't get the point. (They took "Father Guido Sarduchi" a.k.a. Don Movello's "The Five Minute University" course: ["Supply and Demand" ... That's it. That's all you remember five years after you leave university.])
They're operating on the fumes of the old oil based economy and they too brain damaged to get the point now.
At some point the 'splash back' from the biomass hitting the rotating impeller will make an impact, leading to rounds of recriminations, but not until the situation has become so obvious that it would be madness for the electorate to put up with it any longer. (And even then... Some people will not believe it and deny there's anything wrong with their dying breath.)
Remember, the earth doesn't need us. Papa Bush was right you know. The world does not have to have an environment capable of harboring human life.
I just wish his idiot son wasn't out to prove it.
We've had some pretty frightening population collapses before. ("Easter Island" population shrank from 10k pre-"Aku Aku" construction phase, down to 4k in 1720, pre-European visitors, before consisting of 110 individuals in 1800 post-European visitors. [People who carried diseases like lab experiments {and loved to share.}])
Its only if you take a short view of things that things look bleak for humanity.
Remember, there's only about 1,000 families who really have power in the world. (50,000 people, tops.)
None of us reading this or writing this are members. (Hell, I bet Bill Gates and Warren Buffet work for these families, but they're just the staff ... Veritable "Johnny Come Latelies" who don't understand empire or even power, so they're giving away their fortunes..)
No, the rest of us are canon fodder and living organ donation pools.
Thankfully the US Military accidentally unleashed the internet after the second world war, and that insures that those thousand families will thrive despite everything that will happen.
I'm not worried about what will happen.
I just feel bad for who its going to happen to ... the woefully unprepared.
Hello TODers,
After nationalizing the IOCs, IMO, expect the eventual nationalization, then fragmentation of the I-NPK & food supply businesses, too. The combined control under this system will be stupendous for those on the inside track [which means not you & me] parasitically skimming off the last dregs of exuburant Overshoot excesses.
"Make us your slaves, just feed us!"
Have you hugged your bag of NPK today? Biosolar is the only way forward.
Never forget Tadeusz Borowski, #119198:
Never before in the history of mankind has hope been stronger in man, but never also has it done so much harm as it has in this war, in this concentration camp. We were never taught how to give up hope, and this is why today we perish in gas chambers. -- Borowski
For TOD newbies [8 page PDF Warning]:
http://warsocialism.com/thermogenecollision.pdf
-----------------------------------
Fifteen years, plus or minus ten years, is when I estimate anarchy will reign in the United States. Please note that I do not advocate anarchy. Indeed, anarchy is the worst possible future. However, our government was not designed to solve social problems and will be utterly helpless in the face of unfolding biophysical law-driven events.
----------------------------------
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Hi Bob,
What does I-NPK mean? From chemistry many years ago i remember;
N = Nitrogen
P = Phosphorous
K = potassium
I = Iodine
but you say hug NPK so maybe I does not mean Iodine? and why is it written I-NPK?
Thanks in advance.
I(industrial)-NPK (nitrogen, phosphorous, potassium) = chemical (as opposed to organic) fertilizer.
Thank you.
this has to be a hoax. hint, the link is from fox news.
you think I didn't try to find another source? :)
Love him or hate him, Drudge had it up. He doesn't miss very often.
Why would it be a hoax?
The masses 'are hurting' and the people 'in government' think they can help.
This is their attempt at helping. This is a 'trial balloon' - and at some point we'll move from 'ration by price' to something else just to keep the war machines/tractors/police/fire/abulances running.
The FUN part will be when such a law gets passed into existance by 'republicans'. The people who are whining about 'liberals' won't understand why I'm pointing and laughing at them however.
well maybe not a hoax. the headline probably should have read:
"a democrat congressman utters some stupid $hit at a press briefing"
Yes, well, Congress Kritters do say the darnedest things.
I think I'd reword that slightly - "The masses 'are hurting' and the people 'in government' think they can get re-elected.
if you go to that Faux news link, it is interesting the posturing that is going on...and it looks legit, especially Hinchey!
Professor Goose,
This appears to be ONE House Democrat calling for nationalization of US oil refineries, not House DemocratS. I doubt this reflects the thinking of the Democrats' House leadership. I would take Drudge's headlines with a large grain of salt - he's an admitted partisan. I respectfully submit that you jumped the gun here.
Best wishes for thoughtful reaction to news headlines,
Brother Kornhoer
My impression of that report was that this was a group of House Democrats standing at a podium talking about the days' events in the House. For Rep. Hinchey to say what he did when he did could be taken as representing the opinions of the group of speakers, which may have been representing the Democratic Party at the time--and he was not corrected by the others speaking. We would need to know more in what capacity Rep. Hinchey was speaking, etc., etc.
I amended the title nonetheless to reflect this uncertainty.
Either way, the fact an MoC would say anything RESEMBLING that remark means something to the discourse, and it is deserving of a discussion.
What, we will have to find out.
On another note: think of Drudge what you will--he has been behind Obama pretty hard, and he sets the news agendas in this country a lot more than The Old Grey Lady and the Networks do. He does his job better than most.
Thanks. I've read this blog since the first day it started, although I didn't bother to get a user ID until +/- a year or so had passed. I've never sensed a political agenda in this blog (although lots of political agendas in the comments!), but I have seen an agenda of promoting the exchange of ideas.
I agree, as an indicator of the political pressure high gas prices are putting on politicians. However, I respectfully submit that Members of Congress say all kinds of nutty things, such as Trent Lott in 2002 praising Strom Thurmond's 1948 candidacy on a segregationist ticket, thus embracing segregation some 54 years too late. In other words, I think that the Rep. from New York was just thoughlessly mouthing off, much as Trent Lott was trying to make an elderly racist feel comfortable without thought to the national implications - until Trent Lott was intentially skewered by the White House to get a more comformist Senate Majority Leader, and in our more recent case, the Rep from NY was up on Drudge.
I have no argument against an admitted right-wing reporter/pundit setting the discourse of American TV news coverage - I think you're absolutely, unassailably correct. The relationship between that discourse and the truth I would argue, however.
Best Regards,
Brother Kornhoer.
When I saw the following comment by Prof. Goose ...
... I had to put in my two cents. In April, I was incorrectly quoted by the New York Sun, and if you read the story quickly, you might think that I thought gasoline would hit $8 to $10 this summer in the normal course of events. It’s the New York Sun, most people outside of The Big Apple don’t read it, and the reporter is a nice ol’ guy who means well, so no big deal, right?
Except that Drudge reads the New York Sun, and he made that story his main headline for at least part of the day. I received calls from FOX, Fox Business, CNBC radio, CNN, ABC, you name it, all wanting interviews on this. And thanks to Drudge, they all thought I expected gasoline to hit $10 this summer. The tragedy of the news media in this country is that Drudge really does set their agenda. They are not independent thinkers.
One more thing from the Professor that I have to comment on ...
To this, I would comment, “only if you agree his job is spreading misinformation.”
I finished reading Orlov's Reinventing Collapse a couple of weeks ago. Orlov has a marvelous section on the place of boondoggles in the process of collapse. A boondoggle is a project that is supposed to support the mission of an organization, but, in fact, is just a waste of time. A boondoggle leads to further boondoggles that are perceived to needed before progress can be made on the original boondoggle.
Nationalization of refineries is a boondoggle, whether it was invented by Drudge, or a member of House, or whoever. Look at what it has done to TOD today. Are any of these comments actually USEFUL in a larger sense?
No - A few weeks ago Maxine Waters (D-CA) said the same thing during a hearing with oil companies. Check Youtube - that is where I saw it.
After the first oil shock in the 1970's, the Canadian government got into the oil business. What it proved was that civil servants just can't run an oil company - the mindset is too different. They sold their remaining stake a few years ago.
Petro Canada
Nationalizing refineries doesn't increase supplies or lower oil prices. It didn't work here and it won't work in the U.S.
That wikipedia link doesn't support your argument. Doesn't refute it either. It just isn't very helpful. Perhaps you can provide more information?
I suppose they would run the refineries like they ran the Katrina rescue, or are currently managing the monetary system toward collapse.
South Africa nationalized the electric system and look at how that worked out; consistent power shortages. And look at the mess Hugo Chavez is making.
I guess this is what happens when people with the mental development of children manage to get in positions of power.
The only good result of the government taking over the refineries would be the hastening of the time when people could stand it no longer and revolt. I wonder if they ever consider that blocking construction of nuclear power plants and blocking drilling on the coasts or in Alaska might be a little sign of how government delivers energy to the markets.
Nationalization is not always bad. Here, Hydro-Quebec is not doing too bad as a reliable and profitable power utility.
Cooperative/public ownership of utilities is also a proven superior business model, as is true for all natural monopolies, which would also include refiners, airlines, railroads, etc.
While I agree with the first part of your sentence, in what way can it be argued that airlines (other than in very small countries) or refineries are natural monopolies?
Too bad we can't experience the "mess Hugo Chavez is making," to which I refer ytou to the link I previously posted.
Fixed that for you.
John-
There is no observable evidence of this. Capital must continually expand, or die (or get absorbed by another entity that is getting a greater relationship between exchange and user value.)
Take a look around-- how do things look to you? Are corporations getting bigger on smaller? Is capital getting more concentrated on dispersed? Are we using more or less resources?
This is not a problem only related to capitalism, it's just capitalism does it best.
If the government wants to run an oil refinery - let them build one!
North Dakota might do just that: http://www.willistonherald.com/articles/2008/05/20/local_news/news1.txt
Chris
it might make sense for nd, creating a value added product. williston basin oil is medium to high gravity. sulphur is also(relatively) high from some fields. not sure the state should be in the business of refining though.
a counterpoint to the corporate handmaidens in washington who want to privatize everything(exxcept the debt).
dissident-
That is way to much critical thinking for me. I want story and narrative, and heuristic thinking about Lord Hugo eating children for breakfast!
Hugo has been a bummer for the upper class, as some have had to sell the second Mercedes, and spend less time on the Rivera.
All that health care and education for the servants makes the help a bit uppity also.
And who say monetarism is not a way to control a economy-- it has been working so well to protect the interests of the creditor class.
much ado about nothing.
This kind of talk from Democrats now will help John McCain get elected President.
Could be the Dems way of getting around the vexing issue of a "gas tax" that so many here favor.
Once they control the oil companies ANY fuel price increase can be passed off as revenue serving the "greater good".
Take a bow pro-taxers!
Maybe you're finally getting the official recognition you crave.
Digg this.
I think what we are seeing is a stark example of the difference between politicians, and those who seek to understand the nature of things (and disseminate the truth). A politician who has a large block of tinfoil hat wearing constituents makes it a priority to be seen by them as a member of the club. If he is lucky he can select which venues to wear tin foil hat A, and which to wear the incompatible tinfoil hat B. For us truth seekers, and truth dissemenators popularity is sacrificed by not going along with clearly wrong thinking. Even worse for our popularity, we are not likely to be skilled enough to disguise our contempt for the small minded. So Hinchey is playing to his gallery of tinfoil hat wearing fools, and the Republicans are playing to their tinfoil hat (drilling is the answer) crowd. Both know, -or at least have advisors and staff who are telling them something close to the truth, but choose to pander to ignorance instead.
A politician who has a large block of tinfoil hat wearing constituents makes it a priority to be seen by them as a member of the club.
Why is it that people who can point to past, documented attempts by energy companies to conspire is seen as 'tinfoil hattery'?
That happens in nearly every industry in the US. Look at what the banks & bokerages have been doing. It is the new American business model. What is tinfoil hat-like is to single out the energy industry and to propose nationalization instead of regulation & prosecution where laws have been broken.
But I think the simple fact is that the US oil companies and refiners are minor players in this drama. They are definitely not in charge of the oil supply. Their conspiracies & machinations are largely irrelevant. Focusing on them with windfall profit taxes or nationalization or whatever the action de jour may be, is distracting us from the real problem at hand. It is just very hard for Americans, especially American politicians and reporters, to understand that the whole world doesn't revolve around the US.
I might be halfway in favor of this idea, as long as these nationalized refineries are not run by the government. What I have in mind instead is a board of trustees, directly elected by the people. Keep the grubby hands of the FedGov off of them.
Nationalization is a boondoggle, but if it is to be done, we might look to an existing nationalized industry for ideas as to how to do it. I believe that in USA the nuclear weapons industry is 'nationalized'. Only the government owns atomic and nuclear war heads and the factories in which they are produced. Beyond that I have no idea how the industry works, and I suppose it is largely an official Secret.
So my derivative boondoggle: find out how atomic bomb making industry is organized. I'm sure there is a lot of mis-information out there as food for argumentation.
I think we're a long way from nationalization being seriously proposed. I suspect this was a trial balloon. Hopefully it will land with a thud.
Even so, this is one of the most depression stories and comment threads I've read at TOD in quite a while.
Why, yes, this is a most excellent idea! (snark, snark) Empirical evidence shows that federal government always does so well in managing such things. As Bob Sutton says, go look for the evidence. And there a most recent version of it is - FEMA! Even has the word "management" in the title.
Showing clear evidence of having forgotten their Econ 101 if they ever took it, every congressman (and especially their staff members) proposing such an idea should read one of the recent trade books on economics such as Tyler Cowen's "Discover Your Inner Economist" or Charles Wheelan's "Naked Economics: Undressing the Dismal Science". Or maybe an actual introductory text such as Greg Mankiw's "Principles of Economics".
Per David Goldstein's "Saving Energy, Growing Jobs", the government's primary role should be keeper of the rules of the game that keep the playing field level and the referee that enforces those rules and, secondarily, seed money for technology development that is administered by a competitive grants program (not congressional earmarks!).