FREE-MARKET purists are getting a lot of mileage out of scoffing at all the hysteria about rising oil prices. From a strictly economic point of view, they've got a point. Even with crude selling at more than $71 a barrel and gasoline at about $3 a gallon, the U.S. economy continues to expand. It grew at a healthy annualized rate of 4.8% in the first quarter, and there has been no sign of a slowdown since. Oil is a much smaller part of the economy than it was during the oil shocks of the 1970s, and retail prices are still half of what the more heavily taxed Europeans pay.
Eventually, if oil prices keep rising, it may put a damper on the economy, but the odds are, if history is a guide, that prices will soon plunge as demand decreases (people drive less) and supply increases (oil companies dig more wells). Libertarians fret that political meddling will only interfere with the beneficent work of the invisible hand.
If oil were a commodity like any other, the free-marketers would be right. But it's not. Most oil reserves are controlled by governments, many of which conspire through the OPEC cartel to manipulate the market. These governments aren't the kind that any sane person would want to see in control of such a vital asset. Their power can only be countered by action from our own government.
Of the top 14 oil exporters, only one is a well-established liberal democracy Norway. Two others have recently made a transition to democracy Mexico and Nigeria. Iraq is trying to follow in their footsteps. That's it. Every other major oil exporter is a dictatorship and the run-up in oil prices has been a tremendous boon to them.
My associate at the Council on Foreign Relations, Ian Cornwall, calculates that if oil averages $71 a barrel this year, 10 autocracies stand to make about $500 billion more than in 2003, when oil was at $27. This windfall helps to squelch liberal forces and entrench noxious dictators in such oil producers as Russia (which stands to make $115 billion more this year than in 2003) and Venezuela ($36 billion). Vladimir Putin and Hugo Chavez can buy off their publics with generous subsidies and ignore Western pressure while sabotaging democratic developments from Central America to Central Asia.
The "dictatorship dividend" also subsidizes Sudan's ethnic cleansing (it stands to earn $4.7 billion more this year than in 2003), Iran's development of nuclear weapons ($45 billion) and Saudi Arabia's proselytization for Wahhabi fundamentalism ($149 billion). Even in such close American allies as Kuwait ($35 billion) and the United Arab Emirates ($36 billion), odds are that some of the extra lucre will find its way into the pockets of terrorists.
In short, although high oil prices may not be a cause for economic panic, they do represent a big strategic headache and one that requires a serious governmental response. But what? Most of the "solutions" being debated in Washington, such as sending taxpayers a $100 rebate or imposing a windfall profits tax on oil companies, would do nothing to address the crux of the problem: How do we defund the dictators?
That is not an issue that the United States can solve by itself. Although we are No. 1 when it comes to oil demand, our use represents only 25% of the global total and falling. The U.S. should try to forge a consensus among major consumers, including the second-biggest oil guzzler, China, on how to wean our transportation infrastructure away from gasoline, which would have the additional benefit of reducing greenhouse gas emissions. But, but, we are EEEvil amerikkans!!! /liberalspew
In the meantime, there are some unilateral steps we can take: Drill in the Arctic National Wildlife Refuge. Ease restrictions on building new refineries and pipelines. Eliminate the 57-cent-a-gallon tariff on ethanol imports made from Brazilian sugar cane. Increase federal funding for research and rollout of fossil-fuel substitutes such as hydrogen, cellulosic ethanol (produced from grasses and agricultural waste) and plug-in electric engines.
The most important step would be to increase the federal gasoline tax, currently a paltry 18.4 cents a gallon. Congress should enact a sliding-scale tax that rises as oil prices fall and vice versa. Ya, like Congress would every give up any of our money.
That would shape demand, which would in turn shape prices. The goal would be to create a "floor" at, say, $50 a barrel, which would avert the kind of precipitous price collapse that in the past has eviscerated investment in alternative energy sources and kept low-cost oil producers such as the Saudis and Russians in the driver's seat.
The tragedy of American politics is that it's still not possible to take this small, sensible step, even as our worst enemies, from Tehran to Caracas, grow more rich and powerful at our expense. This note from Instapundit: Of course, if we seized the Saudi and Iranian oil fields and ran the pumps full speed, oil prices would plummet, dictators would be broke, and poor nations would benefit from cheap energy. But we'd be called imperialist oppressors, then.
#1
This is an industrial policy recommendation. The record of such policies has not been good. As Boot himself points out, the net effect of high prices today will be low prices at some future point, as consumers drive less, in smaller cars. The oil producers had better salt the money from the boom years away - the hangover will be huge when the glut materializes.
Remove government restrictions on drilling,
Remove government restrictions on production and distribution of distillates,
Remove protective tarriffs on petroleum substitutes,
Fund research,
Impose a protective tarriff on petroleum.
The only thing I find remotely like an industrial policy is fund research. But that will probably be wasteful pork that will bge necessary to get everything else. This is the correct national security policy for the reasons laid out in the article.
#4
Increase federal funding for research and rollout of fossil-fuel substitutes such as hydrogen, cellulosic ethanol (produced from grasses and agricultural waste) and plug-in electric engines.
I debunked electric cars yesterday (they require four times as much oil as gasoline powered cars), hydrogen is at least as bad and if ethanol from waste organic material is such a great idea why is no one doing it already, plus it won't scale short of clear felling uncountable millions of acres of trees.
Otherwise, energy consumption is so integral to economic activity that the only way a glut will result is when there is a massive economic collapse or there is a massive increase in energy from another source (coal and nuclear are the only alternatives. Take your pick).
I'd also add, the continuing inability of otherwise intelligent people to grasp this truth makes me more and more convinced that the only way out is the massive economic collapse.
#5
Restrictions on ethanol "There's a 54-cent-per-gallon tariff, plus a 2.5% ad valorem tax, on ethanol imported from Brazil, the world's other main producer, while there is a 51-cent-per-gallon government subsidy for ethanol mixed into fuel. It's a combination that critics say insulates domestic ethanol producers from competing against cheaper imports."
#6
Previous problems with biomass conversion (aka waste organic materials "Molokai Hawaii had a biomass power plant. Hawaii imports oil for power so this was a direct application of plants to displace oil, and includes efficient use of cellulose, with serious unintended consequences. ... I toured this facility which purchased fuel from the locals. The island was rapidly becoming stripped of all vegetation. The elders were very grateful when this power plant failed. Now, vines grow in the control room, popping glass covers from meters. The jungle reclaimed the site and Molokai is green again...Caution is advised for free-market biomass. Local environments and economies could be severely impacted."
Of course, you could look on 9/11, the WOT, and the current unpleasantness in Iraq and Afghanistan as unintended side effects of massive oil importation from fascists.
#7
The whole topic of energy independence deserves far more discussion and exposition than is apparently available on the internet. One thing that is fairly clear to me is that no possible measures can improve the current situation (i.e. high oil prices) within the next five years, outside of widespread economic collapse. Every proposed widespread measure will take longer than five years to have an appreciable affect.
#10
AH: Of course, you could look on 9/11, the WOT, and the current unpleasantness in Iraq and Afghanistan as unintended side effects of massive oil importation from fascists.
9/11 cost a few hundred thousand dollars to stage. The Bali bombings cost perhaps tens of thousands of dollars. The terrorism problem isn't caused by oil money. It's caused by tens of thousands of terrorists supported by Islamic charities and tolerated by Muslim governments as long as they turn their attention outward. But the figures involved aren't huge. If every Muslim contributed $1 a year, these terrorists would have a billion-dollar annual budget. And Muslims don't need $70 oil to contribute $1 a year.
Note that terrorists also have their own ways of raising funds, such as protection rackets, bank robbery, bank and credit card fraud, and so on. Simply getting a job is also a possibility - many of the 9/11 terrorists were college-educated. A Jordanian suicide bomber whose hands were found handcuffed to a steering wheel in Iraq used to handle luggage at a California airport.
#11
The biggest problem here is yet unsaid.
Just what is all this "Wealth" going to be stored as?
Cash money tends to evaporate in many different ways, from being devalued, burnt, stolen, or simply that those pieces of paper are no longer honored. (Zimbabwe comes immediately to mind)
So you need to convert it into another form, land is good, but the value depends highly on what you use the land for.(House prices are ridiculous these days, raw land in the boonies is cheap.)
One of the worst uses would be to build buildings and rent them out (No matter what the "Rent" is,) this solves nothing but to make land worth more pieces of paper. Not good.
Best would be to farm, (Includes any kind of livestock) producing some kind of foodstuffs for humans and their pets (Big Market here)
"Toys" including Houses, Cars, Boats, (Hell, Locomotives if you so desire) wear out, need maintenance, and eventualy have to be replaced.
Kind of makes the Amish/Mennonites/Kibbutz/Collectives/Communes etc look positively brilliant in retrospective.
So just what constitutes "Wealth"? it ain't pieces of paper unless you can swap them for real "Things" fairly quickly.(NOT gold,silver, jewels, etc, I remember reading stories of the russian nobility trying to trade gold bracelets, jewels etc for a bushel of potatos, with no takers.)
Food is wealth, the ability to make food is a lifetime of wealth, the ability to live off your own land is better than Bill Gates Billions, but only at certain times.
Problem here is that nobody does it but the extremely poor, and it has a stigma attached to it.
Solution, I don't have one, there needs to be both land ownership and usage, mixed with the current crop of "Intelligent Things" such as computers, Highline electricity. Superinsulated homes, safe drinking water, Medicines and Doctors that actualy work, and do not bankrupt you to use them, safe food preservation (Fammines DO happen) Rapid Cheap Transport, and standardized trade.
We have all these now, but seem disinclined to use them correctly where one reinforces another, instead using them haphazardly, it still works better than at any other time in history.
End rant, no I do not advocate going back to the "Good Old Days" which were neither "Good" nor really anything other than selective memories that glorify the good, and forget the bad, but for a more inteligent usage of what's available before the next round of famine, disease and death that roll around entirely too frequently.
Any ideas? Preferably ones that do not require Dictatorship to make them work, but appeal to human interest to get them rolling?
I favor some kind of "Intelligence Test" for all kinds of Government leaders, from Kings, Dictators, Presidents, Cabinet Leaders, or Tribal Chiefs. But then the problem again arises "Who bells the cat?"
I dunno, it's late and I'm tired, probably a bit incoherent too.
'Night all.
Posted by: Redneck Jim ||
05/03/2006 23:30 Comments ||
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#1
I have bzen saying this ie "it is illegitimate and undemocratic that journalists and celebrities use their access to media for molding public opinion" since well before 9/11.
#2
Pretty good analysis. I wonder if celebrities will continue to hold the sway in the future that they have had in the recent past.
Not to long ago, and for most of history, actors were noted for what they were. But because of the dawning of the television and mass media, they benefited from limited distribution where if you and I wanted to go to the movies, they were the only girls in town.
But as we enter a new era of unstoppable communications, I can't help but wonder if their heyday is over. Times are changing fast. I think it's tough to predict how anything will play out 20 years from now.
#8
Nail meets hammer with full contact and full force. Bravo Zulu, Mr. Kuhner!
Posted by: mac ||
05/03/2006 9:18 Comments ||
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#9
I love this article. Completely sums up everything wrong with the "elite". Like Saddam himself, they live in a fantasy world, full of "yes men", who have NO freakin' clue what the average American goes through on a day to day basis. And to that the fact that they tend to run in the same circles and only prop each other up and you begin to see why most of even the Blue States are only blue in urban areas (which themselves are losing population, as the religious, red-staters are starting to up their population counts). I do wonder if the long term effects of abortion, self-centeredness (no or very few kids), and self-adulation will eventually come back to haunt them. When something like 98 of the top 100 fastest-growing counties in the US went red, (and the liberals eventually decrease in population because of abortion & not wanting children), I see a brave new future for this country. Just gotta make sure that red-state children "stick to their roots" and that the Repubs grow a spine and do what's right, not what's politically expedient. By this I mean, cut spending, do something about illegal immigrants, let's release the hounds of our military on the Middle East (win this war), and fix Social Security/Medicare (as well as get judges on the bench who believe in the Constitution as it was written) and the rest will take care of itself.
Posted by: BA ||
05/03/2006 9:40 Comments ||
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#10
Do we shoot ourselves now or later? Geez, too much gloom and doom. We all know what the problems are, where are his SOLUTIONS!
heh,heh. The fact that I enjoyed that just a little bit too much probably means you are right Seafarious. But still a fun bitchslapping. Trouble is when you start to enjoy it too often there will always be a payback.
#16
No need. Hollywood is bombing themselves quite regularly.
Posted by: ed ||
05/03/2006 12:40 Comments ||
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#17
This gives me a chance to air a recent conclusion of mine.
Kerry Packer recently died the richest man in Australia. He was lauded in the media as understanding the synergies between different media and exploiting them. However, in my opinion he went further and did something that I consider breathtaking in its audacious simplicity.
Fact: Celebrities sell media.
Problem: Celebrities are an expensive pain in the butt.
Solution: Manufacture your own celebrities.
And that is what his media empire did. If a celebrity got too difficult or demanding or did something like DUI or groped a woman in the supermarket, they were dropped from his media and ceased to be a celebrity. Awesome.
#18
Phil, that used to be called the "Studio System". Oddly, it gave us stars with much more talent and staying power than the ones afflicting us today.
Posted by: Rob Crawford ||
05/03/2006 16:20 Comments ||
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#19
RC, not to mention a healthy amount of humility.
#21
boobacracy sure seems to have worked on the supreme court.
True enough, but Stevens and Ginsberg will croak soone enough, leaving room to put more like Alito and Roberts - judges, not legislators - on the bench.
I've seldom seen someone pull it all together like this in one article.
For a long time I've said that the human race is several generations away from knowing just how to handle mass media in general, let alone the many-headed monster that the current infotainment industry has become.
Now I'm beginning to wonder if we'll even survive it.
How prescient does the movie "Network" seem now?
Posted by: no mo uro ||
05/03/2006 20:35 Comments ||
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#2
Why haven't we met any aliens ?
Because as humanoids develope, they become less material and more spiritual, so the only ones we would be capable of interacting with are stuck on their own planets, like us. The more advanced are such that we are disoriented and crap in our pants in their presents, and can't remember the encounter. The aliens have little use for this sort of interaction, so they keep to themselves, ever observant. And, at best, we see lights in the sky.
Heritable variation in personality might allow some lineages to resist the Great Temptation and last longer. Some individuals and families may start with an "irrational" Luddite abhorrence of entertainment technology, and they may evolve ever more self-control, conscientiousness and pragmatism. They will evolve a horror of virtual entertainment, psychoactive drugs and contraception. They will stress the values of hard work, delayed gratifica tion, child-rearing and environmental stewardship. They will combine the family values of the religious right with the sustainability values of the Greenpeace left. Their concerns about the Game of Life will baffle the political pollsters who only understand the rhetoric of status and power, individual and society, rights and duties, good and evil, us and them.
Virtue theft! All of the cited virtues, with the exception of sustainability, just happen to be values of political and religious conservatives. And like every socialist fuckass lefty who sees a viable cause or concern, he leaps upon it, tries to take it over like the human virus he is, modify it to suit himself, then claim credit for the success of the host, and hoping nobody notices that the host would be more successful without him as a leeching parasite.
This, too, may be happening already. Christian and Muslim fundamentalists and anti-consumerism activists already understand exactly what the Great Temptation is, and how to avoid it. They insulate themselves from our creative-class dreamworlds and our EverQuest economics. They wait patiently for our fitness-faking narcissism to go extinct. Those practical-minded breeders will inherit the Earth as like-minded aliens may have inherited a few other planets. When they finally achieve contact, it will not be a meeting of novel-readers and game-players. It will be a meeting of dead-serious super-parents who congratulate each other on surviving not just the Bomb, but the Xbox.
The vast majority of "anti-consumerism activists" are lefties that are documented as not reproducing at as high a rate. Left alone, Muzzies won't make it to the Moon, much less the stars. And the last time I looked, you didn't need to believe in evolution to build star drives.
#4
To start with, the closest star to Sol is 4 light years away. The closest inhabitable star system might be 400 light years away.
Then look at our own planets evolution compared to those other planets. Our world didn't begin with the Big Bang. The universe had been around for a long time before Earth formed, about 12.5 billion years; Earth is only 4-5 billion years old.
Of that 4-5 billion years, we have been sending strong signals into space for about 80 years.
Even if we regularly picked up intelligent transmissions from space, then what? Certainly we would send powerful messages their way, that would take over 400 years to arrive. If we sent a probe, it might take 8000 years at high speed.
The only alternative would be if we were to build a vessel that could relatively go much faster than the speed of light. This could mean temporarily converting it to tachyons and back to normal matter--improbable; or bending space so that the shortest distance between points isn't a straight line.
And we would have to do it, because the aliens wouldn't even know we existed.
#5
Take, for example, the MIT graduates who apply to do computer game design for Electronics Arts, rather than rocket science for NASA.
There are a bunch of obvious reasons for the above.
NASA's failure to move forward. The country's failure to get excited about the possibilities. The religious fanatacism that seems to render science into heresy or something.
Plus you can ake money at EA.
Of course EVERYBODY is going to be far away.
Just like us they have probably reduced their outward radio signal.
The point is , you are not going to achieve FTL travel from a standing start. It must be incremental with an infrastructure and public support.
Meantime we havve NO space station (to speak of) NO moon or Mars encampments, No new propulsion systems on line etc.
The first travelers will have to be hardy beleivers who can stand the concept of committting GENERAtions to their trip.
It's been done before .
People rode conestoga wagons into the wilderness committing their children to a life of hard work and isolation, till civilization caught up to them. They were known as PIONEEERS.
#8
You are funny.
There are no aliens.
Consider for a moment the sheer diversity of life on our planet.
The incredibly unfriendly places in which new or previously unknown sppecies are found, from geothermal vents at the bottom of the deepest oceans to deep underneath mile-thick Ice in truly hostile surroundings. Life flourishes.
Ignore the rest of the universe and our own GAlaxy is big enough to assume lots of life.
Only through some kind of Species-ego or ignorance could one reach the conclusion that our planet with it's multitudes of living things would be the only life-harboring palce in the entire cosmos.
#10
Human understanding of the universe is limited. As a technological society advances, its understanding of reality leads to new technologies that allow the society to leave the known universe. (Could be travel into specially created universes or could be going extremely small.) Rather than self-exterminating, E.T.s just move to a better neighborhood. Instead of spreading across the visible universe, civilizations pop up, spread a little, and then disappear.
#29
Maybe they've been watching TV's and movies out of Hollywood and determined there is NO intelligent life down here. Can't blame them if they did...
#30
Intelligent extraterrestrial life contacting us now is highly improbable, even if it does exist.
Figure they have to be within 80 or so light years to have heard our signal, have the ability to decode and understand our signal (not eveyone will be communicative little primare descendants - our morphology hihgly shapes our culture), and then travel the speed of light to get here.
On top of that, you have to figure the probability of having just such a civilization at this stage of developemtn, having not annhilitaed itself, and its star system being viable, etc (i.e. precursors for development of the abilities above).
Very highly improbable that any sort of meaningful estraterrestrial contact will occur within the next few generations, if at all.
Personally, we need to get off this rock because its a survival imperative to do so - that and being challeneged is the lifeblood of humanity, unlike the leftist/fascist part of it who wants a nanny state to protect them against all challenges. Humans explore and are wonderfully resilient if they are not pushed to depend on amorphous things like the government.
#31
What OldSpook said. Let's take care that our species survives, gets at least some of its eggs out of the single basket that is our Earth, and let ET worry about itself should our paths intersect... if it happens. Like believing or not believing in God, our belief does not change whether or not God exists; nor does either belief/nonbelief or God's existence/nonexistence change the core rules by which an ethical life is lived. And if ETs have been visiting, and have been torturing gullible souls, let them look to their own protection when we catch up with them, because I certainly wouldn't put money down on such winning, even if their technology might be more advanced at the moment.
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trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
FREE-MARKET purists are getting a lot of mileage out of scoffing at all the hysteria about rising oil prices. From a strictly economic point of view, they've got a point. Even with crude selling at more than $71 a barrel and gasoline at about $3 a gallon, the U.S. economy continues to expand. It grew at a healthy annualized rate of 4.8% in the first quarter, and there has been no sign of a slowdown since. Oil is a much smaller part of the economy than it was during the oil shocks of the 1970s, and retail prices are still half of what the more heavily taxed Europeans pay.
