Democrats & Liberals Archives

Government By Policy vs. Government by Slogan

The Republican energy policy last year could be reduced to one phrase: “Drill, baby, drill.” In typical Republican fashion, they had to make a big deal out of how unlike the solar/wind/alternative power supporting Democrats they were. Well, the economy they helped create has become the cause of the policy we can’t really follow anymore.

I really got a laugh out of this gentleman's summation of the situation:

“Inevitably, the market doesn’t react; it overreacts and shoots itself in the foot,” said Adam J. Robinson, director of commodities at Armored Wolf, a California hedge fund.

True to form, here's where we are today.

We're not likely to stay in this position, though, forever.

We have to realize that part of the reason energy prices were so high related to the same derivatives market that was fueling the Mortgage sector. When it collapsed, the people who had been bidding up oil sold off their holdings to help pay off their liabilities. That is part of what dropped the price.

Regardless of this irony, there's something important we have to deal with in terms of that price: what it buys. More specifically, what oil and gas it's economic at this point to explore for.

We all know the drill:

1) You pay money to get to the resource.

2) Resource sells for so much of an amount.

3) If the amount it sells for is enough, profit! Otherwise, you just lost money.

At 100 dollars a barrel, there are places worth drilling that are siimply not worth it at 50.

This is going to be the market place we're going to be relying upon to create a dependable energy supply: one where the supply and the cost of the main energy sources goes up and down as the costs rise and fall. It's a volatile situation to say the least, and this is supposed to be the stable basis for our economy.

This is the reality of the market the Republicans thought would be part of our domestic energy solution. Even T. Boone Pickens plan has seen a major kink put in it due to the decrease in energy prices.

This is the case for government intervention at this point: energy prices will be volatile and pointed upwards as long as we're depending on a non-renewable source of energy whose extraction is economic only at certain prices. OPEC will pull us one way, the energy companies another, our own demand and that of other countries yet another. Worse, and most ironically, as the economy recovers, we'll see the return of demand, which will create higher prices. With the country as economically unstable as it is, does it make sense to continue an energy policy that rests on the status quo?

I do not believe we should wait for the market to make this decision for us. We should make this decision ourselves, as a nation, set goals. The future of the fossil fuel economy is uncertain at best. Change always comes at risk, but so does the refusal to change when the system no longer works.

Posted by Stephen Daugherty at March 14, 2009 3:26 PM
Comments
Comment #277678

Either “Drill, baby, drill” or else “Fewer taxes and fewer regulations”.

Either way, “More of the same as the last 8 years, because we don’t understand that expecting different results from the same actions is defined as insanity”.

Posted by: Dick Cheney at March 14, 2009 5:03 PM
Comment #277682

“Drill, baby, drill”, for however hard you drill you won’t get through DistricFile.com’s doors. It’s locked and steel reinforced. Only politics’ chosen ones make it.

Posted by: Johnny McColin at March 14, 2009 6:51 PM
Comment #277683

Dude - you mean districtfile.com, with a ‘t’. It’s exclusive. You can only be invited…i’d keep trying if i were you.

Posted by: Mike Sokol at March 14, 2009 6:55 PM
Comment #277692

Stephen,

I do not believe we should wait for the market to make this decision for us. We should make this decision ourselves, as a nation, set goals. The future of the fossil fuel economy is uncertain at best. Change always comes at risk, but so does the refusal to change when the system no longer works.

Command economy vs. Free market economy?

Posted by: eric simonson at March 14, 2009 10:36 PM
Comment #277696

No. I thought I settled my thoughts on that last time. When we decided to go to the moon, we didn’t rely on the market to tell us when or where to start, we made the decision as a country to go for space exploration, and then gave our market economy the task of researching and creating the technology with government’s help and funding.

I’m saying we should “decide to go to the moon” as far as energy alternatives go, not wait for the markets to give the cue, because by the time the markets make us feel pain once again, it will be too late to make the change comfortably, with minimal sacrifice of economic strength.

Posted by: Stephen Daugherty at March 14, 2009 11:26 PM
Comment #277697

Eric

How about an economy that works. We need practical solutions,not more slogans. The debate free market vs command economy is purely an intellectual discorse at this time and has been for awhile. The government has been deeply involved in the energy market(and vice versa) for a long time. There are hundreds of examples. Has US forign policy been effected by oil supply concerns? Why has the federal government assumed reponsibilty for nuclear fuel reprossing and storage for spent fuels created by the “free market ? How much oil and gas production is from leased government lands?Why do taxpayers have to pay for a navy to patrol the sea lanes for private tanker trans port?

Posted by: bills at March 14, 2009 11:29 PM
Comment #277700

Cleaning Toxic Waste areas at were created in the ‘free market’…fighting erosion created by clear cutting forests in the ‘free market’…you could name them all day long and never run out.

Posted by: Marysdude at March 15, 2009 5:52 AM
Comment #277701

Oh, and don’t forget paying AIG execs 185 million in bonuses for throwing away 7 trillion or so…the 185 mil coming out of tax payer moneys paying for gross misconduct in the ‘free market’.

Posted by: Marysdude at March 15, 2009 5:54 AM
Comment #277717

Does free market actually mean “socialism for the wealthy” market? The free market has been very expensive and has only been free for those that are able to buy politicians so perhaps it should be the “winner take all” market. I know free market sounds good and is tough to go against in sound bites but it always seems to lead to economic depression for the rest of us so perhaps “free for the few, all others pay dearly” market. Or because it leads to the wealth disparity that causes civil unrest perhaps the “rich get richer ” market. But to continue to call it the free market does us all a disservice. It seems a shame “sloganeering” should decide the outcome in lieu of merit and what is best for the people of this nation and the world.

Posted by: j2t2 at March 15, 2009 12:33 PM
Comment #277841
Oh, and don’t forget paying AIG execs 185 million in bonuses for throwing away 7 trillion or so…the 185 mil coming out of tax payer moneys paying for gross misconduct in the ‘free market’.

Wasn’t that ‘last years’s business’? I mean, if that is ok to ignore throwing away 150 BILLION, what is another 185 million?

Posted by: Rhinehold at March 17, 2009 4:55 PM
Comment #277843
Does free market actually mean “socialism for the wealthy” market?

No, though it would be nice to try a free market sometime…

How can you call something a ‘free market’ when we spend decades using the government to manipulate the market to attempt to avoid slowdowns until the market just crashes…? Doesn’t seem to follow that definition to me.

Posted by: Rhinehold at March 17, 2009 4:57 PM
Comment #277858

I love when people that have no clue write about things that they have even less clue about.

Alternative energy:

Solar - 90% of the companies are located in Japan, Saudi Arabia, China, Korea, Germany etc. See a common denominator - governments sponsor everything they do. As a result, prices on their products are crazy. They want US taxpayers pay for their overpriced products because their main source of income for the next decade or two will be US market. So, instead of removing government sponsorship and let the market determine true price (not 60-70% margins like they have at the moment), we are dealing with things that are exorbidly expensive due to the fact that they make their money from the development funds not from the sales. Sharp couldn’t care less if they sell x amount of solar panels, they care they receive 100 million dollar investment in their R&D. That is why a typical use household is stuck with 13-15 years RoI for installing solar energy generators, instead of 2-3 which is the standard with other energy eficiency improvements.

Wind - this is probably the best “renewable” source, problem is it requires a real investment into the infrustructure not into the technology. “Green” intelectuals at the universities and “development projects” will not be contributing to infrastructure, hence that isn’t our main priority cause “intelectuals” need to get paid and guess who writes the “green” policies?

Corn/Soy Bean etc is a good concept but all of them require oil to produce so it’s x+y=y+x. You really don’t save very much when you have to use oil to produce bio fuel.

Here is the best kept secret that no one will tell you in the government because it doesn’t spend money (takes away politicians power) and gives real savings - smart and energy eficient buildings. If each state spent money on retrofitting it’s current state government buildings, schools and community hospitals with energy eficient heating and cooling systems, it would give RoI (Return on Investment) of 2-3 years, would employ highly skilled engineers and electricians for at least 5 years and advance the energy conservation by at least 15 years in the US.

Why don’t they do it? Because that would shrink the government budget. No departament head wants to have its budget cut by x amount because his building all of a sudden is burning 75% energy less. That means they would have to let go of maintanence crew who is part of the Union, that means loosing even more from their budget number.

Another way to save on energy is improving our highways. Most working Americans spend 40 mins in commute which is at least 50% of their total use of the vihicle. During those times, majority of the metropolitan areas average traveling speed of 35 mph. Internal combustion engines burn most efficiently at 55-65 mph. Stop and go trafic causes more polution, spends more gas than anything else. Improve infrustructure and you will save money and energy. Why won’t they do it? Because most of the road construction impacts the “evironment” and I am pretty sure some fairy shrimp or field mouse would be pissed if their “habitat” was disturbed but the fact that from 7am to 9:30am cars are burnign x3 more gas by idling, has no invironmental impact. Real reason is taxes. When energy use goes down, state and federal taxes on energy sources create budget deficits. Californians cut down their sigarette and gas consumption, some businesses left due to the taxes and now we have a budget deficit. Politicians say it’s due to the ressession, but economy shrank by .2%, deficit is 25% that doesn’t add up.

So, it’s not “typical Republican fashion” that says “drill baby drill”, it’s called common sence. It costs US companies ~$50 to take oil from the ground to the refinery in the continental US. If you go offshore, price goes down to ~$30. Does it make sence, hell yes. More oil is pilled by trying to transport it from the middle east than by drilling off shore. Why don’t we do it? Because as one great American radio talk show host said “Liberalism is a mental disorder”.

Posted by: Crusader at March 17, 2009 7:09 PM
Comment #277862

>Because as one great American radio talk show host said “Liberalism is a mental disorder”.
Posted by: Crusader at March 17, 2009 07:09 PM

Wow! Thanks for the uplift…oh, holy, smarter than me, bigger than a bread basket, faster than heck conservative person…

Posted by: Marysdude at March 17, 2009 7:24 PM
Comment #277896

I don’t consider myself the smartest but as an old saying goes, in the land of the blind, one eyed man is the king.

Posted by: Crusader at March 18, 2009 1:34 PM
Comment #277906

Someone spends a lot of time at the watering hole, admiring him/her self in the reflection there. But, before you go back to primping, would you hand me my walking stick?

Did Rush Limbaugh just start blog posting here under the name Crusader?

Posted by: Marysdude at March 18, 2009 2:43 PM
Comment #277933

I didn’t see Rush comparison comming. How original! I bet it sounded so clever when you thought of it. Let me guess, you had a choice between comparing me to Dick Chaney and Rush Limbaugh, I wonder what tipped the balance.

In a retrospect, it beats the hell out of being called a gun and bible clinging bigot, coodoos, I mean “dittos” to you!

Now, this is the change I can believe in!

Posted by: Crusader at March 18, 2009 5:29 PM
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