Posts
Petroblogging: Greed's Oily Residue
Oil and all the woes it has been causing us seem to be ingrained in the collective conscious of America right now. I think the McClatchy news website will need to add a separate section just for oil stories the way things are going. Fighting for oil, crying about the price of gas and abject paranoia about speculative plots are just some of the noise we're getting inundated with lately. These things speak to the power of the petrodollar which leads to my attempt at petroblogging.
There Will Be Blood in Congress
Big Oil and steadily increasing gas prices have created all sorts of problems for the average minivan driver. On the legislative and policy side there are multiple "fixes" being thrown into the mix in Congress. The Dems are thinking of a multi-faceted approach that includes a windfall profits tax on oil companies (this makes no sense), capping the Strategic Petroleum Reserve, taking away tax breaks and cracking down on energy market speculation. A windfall by definition is a one-time increase in profits. The profits Exxon and company are seeing are the normal thing now. So why would a windfall profits tax be applicable in today's situation?
The GOP is looking almost exclusively from the supply side with proposals that call for increased drilling (including in ANWR) and refinery building and the normal emphasis on converting resources to cash. The only proposal that will get widespread support is the cap on the strategic reserve. Politico has a really good run down on the various legislative proposals that are presented in a Factcheck.org fashion.
Is the Gas Tax Holiday Dead?
File this one under Panderer in Chief or When Economists Attack. The McCain/Clinton plan to lower gas prices for the summer driving season using voodoo economics has been fading in popularity, and that's not just my impression. Does it have to do with every economist in the world calling it a bad idea? It seems that the McCain advisers that hatched the plan ignored the cold hard facts of tax incidence theory and went straight for the lame gimmickry of the appeal of a tax holiday. Hillary of course glommed on to the gas tax holiday looking for anyway to get an edge on Obama. Now that she is all but cooked in the race for the nomination, her support of a holiday from gasoline reality doesn't mean much. Enough rational introspection from the media and even average citizens has appeared to relegate this one to the silly season column.
Bush Off to Visit His Saudi Overlords
While we are left to guess what the price at the Circle K station will hit tomorrow the Prez heads off to the Middle East to survey the damage of seven years of failed foreign policy. Every Bush or Cheney Mid East trip of course ends with the requisite stop in Saudi Arabia to engage in royal ass kissing. maybe this trip will be different. It would be nice to see someone going to bat for us and maybe ask the Saudis to increase oil production. Is it possible that W. will threaten to pull out of Iraq and let the crazy Iranians increase their influence even more? Will King Abdullah be scared shitless about growing Shia influence in the region stirring up unrest amongst the population of Shias that inhabit the oil rich eastern part of his kingdom? Maybe the King will choose to hold hands with W. and buy his allegiance with another shiny sword.
It's Not a Bubble
Professor Krugman takes the speculation on speculation to task in yesterday's NYT column. The theory that energy speculators are behind the rapid increase in oil and gas prices has taken hold recently and for good reason. The guys making all of the money on the oil boon are the ones closely connected to the markets and traders that seemingly create the frenzy that is pushing up the price of oil. Krugman refutes this notion with sound economic reasoning. His contention is that speculation requires hoarding of supply to be effective and currently the supplies of oil are at normal or below average levels. Sorry, the oil companies are easy to hate but our dilemma is driven by good ol' supply and demand principles. If we could only get that Iraq occupation thing to work maybe the price would go down.
We're Americans and we ain't drivin' 55 or taking the damn bus to work.
There Will Be Blood in Congress
Big Oil and steadily increasing gas prices have created all sorts of problems for the average minivan driver. On the legislative and policy side there are multiple "fixes" being thrown into the mix in Congress. The Dems are thinking of a multi-faceted approach that includes a windfall profits tax on oil companies (this makes no sense), capping the Strategic Petroleum Reserve, taking away tax breaks and cracking down on energy market speculation. A windfall by definition is a one-time increase in profits. The profits Exxon and company are seeing are the normal thing now. So why would a windfall profits tax be applicable in today's situation?
The GOP is looking almost exclusively from the supply side with proposals that call for increased drilling (including in ANWR) and refinery building and the normal emphasis on converting resources to cash. The only proposal that will get widespread support is the cap on the strategic reserve. Politico has a really good run down on the various legislative proposals that are presented in a Factcheck.org fashion.
Is the Gas Tax Holiday Dead?
File this one under Panderer in Chief or When Economists Attack. The McCain/Clinton plan to lower gas prices for the summer driving season using voodoo economics has been fading in popularity, and that's not just my impression. Does it have to do with every economist in the world calling it a bad idea? It seems that the McCain advisers that hatched the plan ignored the cold hard facts of tax incidence theory and went straight for the lame gimmickry of the appeal of a tax holiday. Hillary of course glommed on to the gas tax holiday looking for anyway to get an edge on Obama. Now that she is all but cooked in the race for the nomination, her support of a holiday from gasoline reality doesn't mean much. Enough rational introspection from the media and even average citizens has appeared to relegate this one to the silly season column.
Bush Off to Visit His Saudi Overlords
While we are left to guess what the price at the Circle K station will hit tomorrow the Prez heads off to the Middle East to survey the damage of seven years of failed foreign policy. Every Bush or Cheney Mid East trip of course ends with the requisite stop in Saudi Arabia to engage in royal ass kissing. maybe this trip will be different. It would be nice to see someone going to bat for us and maybe ask the Saudis to increase oil production. Is it possible that W. will threaten to pull out of Iraq and let the crazy Iranians increase their influence even more? Will King Abdullah be scared shitless about growing Shia influence in the region stirring up unrest amongst the population of Shias that inhabit the oil rich eastern part of his kingdom? Maybe the King will choose to hold hands with W. and buy his allegiance with another shiny sword.
It's Not a Bubble
Professor Krugman takes the speculation on speculation to task in yesterday's NYT column. The theory that energy speculators are behind the rapid increase in oil and gas prices has taken hold recently and for good reason. The guys making all of the money on the oil boon are the ones closely connected to the markets and traders that seemingly create the frenzy that is pushing up the price of oil. Krugman refutes this notion with sound economic reasoning. His contention is that speculation requires hoarding of supply to be effective and currently the supplies of oil are at normal or below average levels. Sorry, the oil companies are easy to hate but our dilemma is driven by good ol' supply and demand principles. If we could only get that Iraq occupation thing to work maybe the price would go down.
We're Americans and we ain't drivin' 55 or taking the damn bus to work.
No comments:
Post a Comment