Granted, OPEC (Organization of Petroleum Exporting Countries) has raised the price of crude to $35 a barrel and cut back on production in order to (ignoring their rationalizations and focusing on reality) obtain a maximum profit in a world of economic growth. Nevertheless, how can this result in such a huge difference is price between two adjacent states, though?
First, the oil industry was able to quietly buy enough of our state government a decade or so ago to get a small bill passed that the “Liberal Media” completely ignored. That bill closed California’s borders to all oil suppliers outside the state.
The reasoning should be obvious. California is the most populous state and has the highest ownership, per capita, of automobiles of any state and, most importantly, is the state where the greatest number of the gas guzzling SUVs and trucks and RVs and large automobiles can be found. It is also the state with the absolute worst system of public transportation imaginable (where it exists at all) and hundreds of miles of freeways and highways between cities and vacation areas. Therefore, California is the one state where local oil companies and refiners can count on making billions upon billions of dollars without any added effort whatsoever, simply by providing the fuel.
Nevertheless, the local refiners and suppliers wanted more and more. (Ah, the ever growing stench from Corporate America’s heavy breathing in their ever increasing greed. Ain’t it grand?) They had the aforementioned legislation passed so that they could simply charge whatever they decided the market could bear. Since no one could import any cheaper fuel, then the local industry could cheat and steal without any worries of being undercut by more honest suppliers from out of state.
Of course, they couldn’t just keep the prices that high all year long. Doing so would have a profound impact on tourism which, they realized, would cause a decrease in both their sales to those tourist’s automobiles as well as to cause less capital to be available in the tourism industry which would, again, affect their profits.
Instead, what these filthy little creatures realized was that, by raising and raising the price throughout the winter and early spring, they could “cut” those prices just before the summer’s influx of tourists.
Now, let’s see a show of hands who believe that the local industry would lower their prices to the same level of the summer before? Okay, everybody with their hands up, I now require you to send me a signed check for $10,000 so that I can invest that money for you in my latest invention, “The Idiot Mobile”!
Of course the industry never lowered the prices anywhere near last year’s levels. Instead, where the cost last year was about $1.50 a gallon locally before it was raised to the $2.00 mark of late, they will “lower” the price to around $1.75 or so around April or May. The “Liberal Media” will, of course, trumpet the steeply reduced prices as a boon to the tourists and the gouging and the theft will continue year after year.
What are the servants of the oil industry (you know the ones...their names keep appearing on your election ballot?!?) proposing as solutions?
Well, the imbeciles on the Right want to cut the cost all of four cents a gallon by removing the federal gas tax. Now there’s an intelligent thing to consider, now isn’t it folks? In a nation where our transportation infrastructure has been crumbling ever since the political neglect of the sick “Reagan Revolution”, what we need is to stop creating funds to repair that system. First, the four cents means nothing since it will only serve to allow our nation’s infrastructure to further deteriorate for no reason other that ignorance. Second, it will only serve to entice the local oil industry to increase the price that much since, hey, the idiots were paying that much before, they’ll keep paying it only now it’s our money. Finally, when the transportation infrastructure has fallen even further into disrepair, the feral little animals in the Republican Party will be able to claim that it was the Democrats or the third parties or whoever that went and raised your taxes again. Since I doubt that one could find a conscience in any Republican in office, they have never shown any remorse in destroying what is needed in American and then blaming it all on somebody else through their conservatively owned media.
What does our silly little Republican clone of a President offer? He wants to sell the federal reserves of petroleum on the open market, figuring that this cheap and plentiful (but finite) supply of oil will drive the cost of a barrel down, forcing OPEC and America’s oil industry to lower their prices.
Gentle readers, let’s look a little closer at this rather stupid suggestion and, using a metaphor, let’s see exactly where the stupidity lies.
Pretend that you have been storing an ever increasing supply of canned goods in a bunker as a hedge against the coming apocalypse. You’ve been buying these goods at below market prices due to the quantities that you have bought.
Now, let’s say that the world’s canned food producers decide to create an artificial shortage, driving the price of canned goods up astronomically. Everywhere one turns, a can of creamed corn that once retailed for just fifty cents is now being sold for two to three dollars, if it is available at all.
You watch your friends and your neighbors being cheated by supermarkets day after day, watching as the cost of canned goods skyrocket past the budgets of the families already barely getting by with their minimum wage jobs.
Finally, you can take it no longer. You decide to force the markets to lower their prices by offering your supply of canned goods on the open market. Surely, the canned goods industry can not withstand the impact of losing such a large share of their market by you undercutting them and their prices.
You sell off your supplies at the same price as it all cost to originally buy it. You see families finally being able to afford canned foods, again, and you are very much pleased with yourself.
After a short period of time, though, you notice that your supplies are quickly being exhausted and that the prices in the supermarkets have barely budged lower. How can that be? You find that you must cut back on your sales dramatically or else risk running completely out of food, yourself, food you may still need in an emergency.
You are now faced with two rather disturbing realities. First, the supermarkets can now charge whatever they want with no fear at all of being undercut by you and your supplies. In fact, they can increase the cost to any level they like, knowing that the average American is far too lazy and spoiled to either walk where they want to go or to actually force themselves to use the poorly designed and meager public transportation that does exist.
Second, and most disturbing, you now find that you must pay the even greater cost of renewing your depleted supplies at whatever the current market value is or tempt fate by hoping that no disasters strike while you wait for the prices to come back down.
Basically, this is the fate that Clinton will face, as well. OPEC and the American oil industry will happily absorb the petroleum from the federal reserves and resell it on the market for the same profit margins they now enjoy and that you don’t. Once that reserve is history, we’ll go right back to what we are faced with now except the industry will no longer have to fear any excess supplies appearing and, even better for them, they’ll know that the federal reserves will be replenished at whatever price they demand.
Now that you know what we plainly must not do, what might be suggested as an alternative that will not only put a stop to this fraud and theft by the oil industry but will, in the very long term, insure it cannot happen again?
Oh, I am so happy that you asked.
First, we must acknowledge the intelligence and long term thinking that was the true legacy of the Carter presidency and which was completely destroyed by that simple minded little puppet of Corporate America, Ronald Reagan.
We must then immediately re-institute the oil windfall tax which Carter and the Democratically controlled Congress first passed after the last round of massive fraud and theft by OPEC and America’s oil industry. What that entailed was the determination of exactly what oil truly cost to find, drill, refine and transport. Then, a profit margin of 5% was added on to that cost per gallon for gasoline and diesel and heating oil and all other petroleum products. Every penny “earned” by the industry above that was simply taxed at 100%, making the end profit exactly what it should be and removing any enticement to gouge the American people.
Next, bring back the tax credits for research and development of all alternative fuels and energy sources. Give massive tax breaks to every home owner who installs any of the many current or soon to be developed energy saving or reducing devices. Create government grants for any and all privately or publicly (through universities and colleges) funded research. All of this could be funded by that aforementioned windfall tax.
Create a sales tax system that rewards owners of fuel efficient vehicles with the least (or zero) taxes going to those models which utilize energy sources other than petroleum (solar, electrical, methane, etc.) and the highest taxes on those vehicles using the dirtiest and least renewable.
Finally, lay a tax again on those vehicles with the lowest economy. Simply add ten cents per gallon for every cylinder over four with all proceeds going to pay for those credits and grants to develop better systems as mentioned above.
These are just a few of the directions that America should move that will completely negate the all-encompassing power that the world’s oil industry holds over the rest of us. No matter what, though, America must regain control of our future and, whether we like it or not, or want to admit it to ourselves or not, we must first take control of our government away from Corporate America and their buddies in the Global Economy. Unless the first business of government is the people of America and not the wealthy owners of our politicians, we will always be subservient to every greedy little whim of the wealthy and powerful.
Oh, and by the by, where are the OPEC nations whose butts we supposedly saved during our last little exercise in sacrificing the lives of American boys and girls while we murdered a couple hundred thousand Iraqis to protect a democracy that never existed in the first place? Don’t those self-centered and filthy rich little sand chiggers owe us at least some reasonably priced gas? (1
3/29/00. California's Atty. Gen., Bill Lockyer, is now proposing exactly what I did just a few paragraphs ago; to create an "excess profits" tax on oil companies. Stating that oil companies are gouging Californians "simply because they can get away with it", Lockyer took his excess tax plan before a special Assembly subcommittee on March 28. Whether or not all of this hot air will translate into anything can be guaged by the Republican response which was, of course, to repeal the sales tax on gas which provides the majority of the state's funds for highway construction and maintenance. In other words, the creepy little Republicans want to destroy the state's ability to build and maintain its infrastructure rather that anger their owners in the oil industry by limiting its obscene profits, pri=ofits that now amount to nothing less than outright theft at the pump. (2)
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