Friday, May 27, 2011

An introduction to oil politics from 2/3 years ago.

Collected these links and wrote the comments a couple 'a three years ago. I'm not sure if I ever posted it before. So let this post be an introduction till I have time to look into the current situation:

Over the last eight years, President Bush, Vice President Cheney and their Republican allies in Congress have fallen over themselves to give oil companies huge tax breaks. They have repeatedly blocked meaningful progress toward energy independence and they have shown no interest in taking on the unchecked speculation that has created extreme volatility in energy markets and pushed oil and gas prices upward.

Yesterday, addressing the U.S. Chamber of Commerce, Vice President Cheney said, "We have to recognize that there isn't anything out there that is going to get us away from a hydrocarbon economy anytime in the near future. There really isn't anything on the horizon that today is economic, relative, for example, to basic, good old oil and gas."

Not surprising coming from an oil man, and the man who sat down with oil company lobbyists behind closed doors to write the current failed policy. But those remarks show the bankruptcy of the Republican vision on energy. It's a vision of the status quo, invested in the problem, not in finding a solution. And it just doesn't cut it.

Note: closed door meeting on a ‘failed’ policy that put Halliburton at number one and helped Exxon have the largest profits EVER. I wonder how many other failed policies have helped the oil companies?

The following is from an old book called Unequal Democracy

“The recession of 1974-1975 was triggered by a massive oil price shock engineered by the Organization of Petroleum Exporting Countries (OPEC). The real price of oil increased by 140% in 1974, throwing the industrial sector of the United States and other advanced economies into a tailspin. Accidental president Gerald Ford entered the White House in the midst of a major economic crisis not of his own making.

Although every president’s economic performance is shaped by unpredictable and uncontrollable events, presidents’ responses to those events are often strongly colored by their partisan priorities and predispositions. Given President Ford’s conventional Main Street republican background, it is perhaps unsurprising that he “initially refused to respond” to the OPEC price shock “with policies to restore aggregate demand,” as most Democrats would have done. Instead he “launched the ‘whip Inflation Now’ program of fiscal and monetary restraint, which helped prolong the deep post-OPEC slump in employment and output through 1974 and into 1975…only after a long and sharp decline in real output did President Ford finally propose a one year tax rebate in January 1975. the Democratic-dominated Congress passed the bill two and a half months later, after increasing the amount of the rebate substantially and redistributing it in favor of low-income and middle-income individuals.” Real incomes, which had declined significantly in 1975, rebounded in 1976 – almost, but not quite, enough to get Ford reelected.”(Page 45)

By focusing all the benefits of economic policy and oil policy for the rich the economy still grows, it has to as money is still being made, there is just no ‘redistribution’ of income. The idea that the poor live off the scraps of the rich is also false as the deregulation of banks and wall street bankrupted the nation. So basically, there is no trickle down effect whatsoever.

Anyways, getting back to old news, after Ford, Carter was elected. Through a large retraining program called CETA managed to reduce unemployment tremendously. This was the trend throughout his Presidency…until the last year, when this happened...

“The unemployment rate declined through most of Carter’s term but spiked back up in the wake of a second major oil price shock in 1979-1980. Slow growth was coupled with double-digit price inflation – an unprecedented combination of economic ills dubbed “stagflation.” Running for election in the midst of recession, as well as foreign crises in Iran and Afghanistan, Carter was defeated by a popular vote margin of almost 10 percent points.” (Page 46)

Note: It wasn’t government policy that brought in a recession – it was oil company policy? Is there a pattern to this? 

Reading through a post by Paul Jenkins, I came across this...

If the GOP cannot hold on to the most religious of Americans because they are more concerned with social equality than with, say, sexuality, it is doomed.

This is the reason that Republicans are able to stir up a large voter base amongst those who are not, essentially, rich. Since average incomes of middle class and lower income groups always decrease during Republican years there has to be another hook to keep the attention of average Americans away from issues that directly benefit Americans. That hook is to boost income growth in an election year. I am going to show you that it’s worse than that…the party rulers can actually engineer recessions to take out a candidate.

Scientists and economists have been offered $10,000 each by a lobby group funded by one of the world's largest oil companies to undermine a major climate change report due to be published today.
Letters sent by the American Enterprise Institute (AEI), an ExxonMobil-funded thinktank with close links to the Bush administration, offered the payments for articles that emphasise the shortcomings of a report from the UN's Intergovernmental Panel on Climate Change (IPCC).

Anything to make money, no matter what the cost!

His name is Jim Wilkinson. He helped organize the GOP "protest"/obstruction of the Miami election recount in 2000. He was the White House's key media spinner at the Coalition Media Center in Quatar in 2003. A reporter from Texas said he used techniques first perfected by Stalin. He was then a architect of the media strategy for the Republican convention in New York in 2004.

"The financial crisis that we now face was created by design. It is intended to destroy the labor movement, crush the middle class, quash Medicare, Medicaid and Social Security, reduce our foreign debt by 50 or 60%, force a restructuring of America's debt, privatize all public assets and resources, and create a new regime of austerity measures which will divert more wealth to the banking and corporate establishment."

This was months before the sub-prime meltdown in August 2007, or the more recent hike in food prices and oil prices. Their plan, blessed by business and the banks, was implemented step by step. The consequence was intended.

News, as we know, passes by so fast, and unless a story is repeated ad nauseam, no one remembers it or looks for the context and background of breaking developments.

When Lou Dobbs lied, Bill Schneider played along.

Dobbs: "We have to consider what else happened in the markets and that is precisely as most of the experts had suggested, once the executive ban on oil drilling offshore had been lifted, we have seen a huge decline of approximately 13 percent decline in the price of crude oil and gasoline prices actually begin to roll back over the course of 11 days, which is remarkable, isn't it?"

Schneider: "It is certainly remarkable. And the vast majority of Americans do support offshore oil drilling. They support anything, anything that will give them relief from high gas prices." Lou Dobbs Tonight, July 29, 2008

No experts said any such thing. For obvious reasons. "[Bush's] move to end the moratorium, in place since 1992, won't have any effect until a separate congressional prohibition expires or is overturned," said The Wall Street Journal on July 15. Instead, analysts "point to two distinct trends that may take the wind out of this year's price spike: an easing of tensions over Iran and evidence that demand for oil in the U.S. is falling faster than many believed."(The Wall Street Journal, July 18, 2008)

Senator Pete Domenici, R-N.M, has relayed the mixed message of "we feel your pain" (at the pump), while attempting to justify his party's blockage of a windfall profit tax on Big Oil by saying that increased taxes on oil companies would be something Americans wouldn't want.

[Note: Which Americans?]

"Americans are furious about what's going on," declared Sen. Byron Dorgan, D-N.D., and want Congress to do something about oil company profits and "an orgy of speculation" on oil markets.
"If you don't tell the big oil companies they can no longer run energy policy in America, we will not succeed, plain and simple," Sen. Charles Schumer, D-N.Y., told CBS Radio News. 

Some links to ancient news articles:

Complete control and domination of the oil industry by the Standard Oil Companies, in violation of the 1911 dissolution decree of the Supreme Court, was charged by the La Follette Oil Investigation Committee in its report presented to the Senate after a three months' inquiry into conditions and prices in the oil business.

The methods of control as set forth in the report include division of marketing territory between the various Standard Oil Companies on almost the same basis as before the dissolution, ownership of the principal pipe lines, interlocking stock ownership, fixing of prices in the producing fields, excessive and discriminatory freight rates, and ownership of the basic patents for "cracking," the technical name for reducing crude oil to gasoline.

" If a few great oil companies are permitted to manipulate prices for the next few years as they have been doing since 1920," the report asserts, " the people of this country must be prepared before long to pay at least a dollar a gallon for gasoline."

Prominent oil men in the Standard Oil companies in New York, headed by Walter C. Teagle, President of the Standard Oil Company of New Jersey, declared that dollar gasoline was an economic impossibility.

A similar and even more striking case of climbing prices and record production is afforded by the petroleum industry. Crude oil has been marked up 25¢ to $1.75 per barrel by several prominent companies, notably the Texas Company and the Humble Oil and Refining Company. Yet the daily average production of 1,801,800 barrels for the period ending March 10 has established a new high record for the history of this country. The recent difficulties in the coal industry have probably proved of importance in the steadily widening employment of fuel oil.

The mounting price for petroleum products has not gone without an accompaniment of verbal fireworks. Senator La Follette could not quite bear to leave Washington this session without a final and characteristic fling at the " Standard Oil monopoly." In rebuttal, President W. C. Teagle of the Standard Oil Company of New Jersey rather brutally manhandled the Senator's prediction of "dollar gasoline " by pointing out that at about 30¢ industrial alcohol could successfully compete as automotive fuel. Hard on the heels of this exchange, Chairman Bedford, of the same company, issued an even more thought provoking and pessimistic statement concerning oil production in Mexico. Thus do the many and much criticized Wall Street rumors of last year concerning "salt water" finally find official confirmation.

Three... ?

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