Republicans & Conservatives: Archives

Very good post. I for another agree with you, at least to the point that gasoline should be taxed to $5.00 gal. The extra revenue could fund the military and the politicians could leave their hands out of the Social Secuirty Trust Fund. All the conservatives are arguing in the liberal column and it seems all the liberals are in the conservative blogs. I find that funny, but I guess its just the nature of things. :-) Sorry, I meant no offense.

More taxes? Government intervention is never a great idea, even if the purpose is noble. And don’t forget that a high gas tax falls disproportionately upon the poor and lower-middle class.

The issue is worldwide energy sources are heavily dependent on oil, and a drastic rise in prices is going to, at minimum, cause a worldwide recession, if not depression. We simply don’t have flexibility in the system.

Also, the other problem is that oil fields have a certain geological limitation on how much you can pump out at a time. We’re pushing peak capacity right now, and are assuming that new technology can continue pushing peak capacity higher. That’s a dangerous game to play.

And we independents? We are allll over the place…

That said the problem with higher gas prices is not just the price of oil, it is evironmental regulations. Then add to that the lack of refineries, no new refineries have been built since the late 70’s and doesn’t appear any new ones are coming soon, yet? Old refineries keep closing. If we keep with the higher demand and the inability of refineries to keep pace due to in part the “designer fuel formulations” even if the oil price did drop? You’d still see increasingly higher prices at the pump because several more refineries are slated to close within the next few years.

I agree that the Oil is usually found near people who don’t deserve them. They have a “disincentive to develop serious skills”. Look at Texas. Could you believe those Texans were stupid enough to elect Bush Junior? They even managed to contaminate the rest of the country!!! Indeed, oil is a curse.

The people on the surface nearest the oil were (are) usually often unaware of the black gold under their feet and as likely to be able to get it, as they are to mine rocks from the mountains of the moon.

The people living on top of the oil have a disincentive to develop serious skills. Almost nothing they can earn with hard work can measure up to the free money coming out of the ground.

These two statements directly contradict one another.

“Necessity is the mother of invention”, the railroads switched from steam to diesel when it became economically expedient to do so.

Our refineries are running at 97%. We have other oil fields that we cannot drill & we have a lack of refineries, which we cannot build.

Is Aldous an idiot or does he live in Europe? I don’t believe I have ever seen an intelligent statement in his posts.

Perplexed

Perplexed-
Do yourself a favor and don’t ask questions like that. First, that is an insult directed at him, second, Aldous tends towards the facetious in his posts.

Although I agree with you about the fact there are governments who do nor live up to their duty under the Law of a Nation, the problem is not going to be solved until someone can convince The Market that it is in their inherent best interest to release the technology that will allow every family to live an Energy Free Life. Look up Gray’s Electromagnetic Motor on the web and ask yourself how much more money you would have if you did not have to pay for Electricity or Gas for your car.

Do you not think that an additional $3-500.00/mth/family won’t raise a few eyebrows on Wall St? Yes, a few people could make a lot of money with a new fuel of the future, but how much could the Market make if there was suddenly available to the Economy approx. $48-80 Billion dollars per month just in the U.S.(Based on 160 Mil. Households)? If Greed or Profit motivates The Market that chunk of money should be enough to make any CEO stand up and take notice. This ideaology is how to take on the Big Oil Companies and force those nations who oppress their citizens to conform to The Law of the Land.

Perplexed,

IMO, Aldous is in it for effect, not debate. If s/he doesn’t have another alias on this blog, then I would be very surprised. Though, Aldous does rarely make some serious comments.

Jack,

Good post. Unfortunately some of us will be relying on oil (or doing without) for quite awhile, since we lack the funds to switch.

Weeville & Gandhi

I didn’t mention taxes. In fact, I just don’t want the government to do anything to try to bring the prices down. Higher prices will help us develop the incentives and technologies we need to make a better future. We don’t need the government to do it for us if we let market forces do the job right.

Julia

I want to make oil a less important component of the energy mix. Higher prices will do that. There is really no way around that, in any case. The world price of oil is determined by a dirty kind of supply and demand. Dirty because of the influence of national policies, taxes and the power of big producers and cartels. But all these player can’t reverse trends. Price rises will encourage more production as well as make alternatives more attractive. The adjustment takes some years and it can be painful.

It seems like many people are holding an untenable position. They don’t want oil prices to rise, but they don’t (or don’t believe it is possible) to produce more oil. The solution in fact will involve rising prices and more production in the short term at least.

Aldous

Actually the case of Texas the local people developed many of the technologies and provided the labor, capital and risk taking needed to make the fields productive. It was different with Saudi, for example, where the locals didn’t know about the resource, had no technologies to tap it, provided none of the risk capital and just enjoyed the big profits.

Oil also corrupts to the extent it dominates the economy. It did less harm to UK or Holland because it was just one part of a diverse economy. It caused more dislocation even in a place like Norway, which had an honest government and a well-established society.

Jarendal

I don’t see the contradiction. The Middle Eastern case, for example, the people didn’t know about the oil and relied on foreign technologies, expertise and labor to get it out. AND once they got it they had no incentive for any kind of hard work since they could live off the revenues.

Unearned wealth is destructive on the individual level Thanks for pointing out why the estate tax should be kept.

Jack,

Higher prices will do that. The issue is, when high prices hit, will it be rapid, or gradual. The concern is that it may be rapid. Unlike the railroad industry (as perplexed has pointed out) we’re talking about the entire energy infrastracture of the globe needing to come up with a new and varied mix of energy sources.

We should start gearing up for it now, to protect ourselves against the potential for future shock. Raising the MPG limit would be a great step.

Sorry about the statement concerning Aldous, I have not learned to tolerate him as you have.

Concerning MPG, it will accomplish nothing. People are concerned now & trading their SUV’s in for economy cars. But as the price of fuel stabilizes, the Americans will want their large vehicles & the automakers will build them. My cousin is part owner of a boat dealership. I was talking to him today & he said this was the best year ever for selling 25’ plus boats. Someone is not worried about fuel.

I believe the key is an alternate fuel source, but it will never happen, at least not at this time. Not as long as oil companies are making profits, & by the way, I don’t have a problem with profits.

Perplexed

Julia

I agree about the MPG. The best way to accomplish this is through higher prices. If you go to the car dealership today, you may have to wait to buy a hybrid because there is such a big demand. They are practically giving away SUVs. When gas prices were lower, the situation was reversed. The price works a lot faster than the regulation and it allows for some of that fine-tuning you are talking about.

The other trend that we are beginning to see is the differential home prices farther from workplaces and/or public transportation. About five years ago, when gas was cheaper, people gleefully looked for houses far in the country. In this case, higher MPG alone might actually have the perverse effect of postponing the reckoning and making it harder to take when it happens.

J. Anthony -

While not trying to sound to overly snobbish your article fails to succeed. You sound like a snob.

Anytime you would like to pay for my gas while you’re so happy with higher prices, just let me know.

Inflation … that sounds good too?? Slowing economy, less tax revenues … just peachy.

Couple of fallacies in your article need to be debunked Jack.

1) Unearned wealth is wasted. Give me a million bucks and I will prove to you it won’t be wasted. Hell, loan it to me and I will repay you your 1 million in 11.3 years and have double the million to keep for myself. Sorry, this myth has to go.

2) Oil is fungible. Oil was fungible when supply appeared limitless. The new economics of oil based on a finite amount of oil and diminishing supply as well as vastly increasing costs to tap remaining amounts means there is NO CAP on how high oil prices can go, and limited supply with unlimited demand means oil is no longer fungible. Catch up, Jack, the times they are a changin’.

I had a really good comment or so I thought waiting to be approved…

:-)

David,

“Give me a million bucks and I will prove to you it won’t be wasted….Sorry, this myth has to go.”

You’ve proven your ingenuity in various ways (as per your own description of your lifestyle) and thus you are not comparable to the people Jack specified.

Some Saudis (for example) have taken the wealth they’ve been handed and made much more with it, while others squander it on a regular basis. The facts are that all the Saudi royal family (unless some are cut off for whatever reason) are given regular stipends out of the country’s oil wealth to provide very lush lifestyles and don’t actually need to further pursue wealth. This money would be much better spent on all the people of Saudi Arabia, versus a select few (well, not so few) that happen to have the right lineage.

Stephanie said: “This money would be much better spent on all the people of Saudi Arabia, versus a select few (well, not so few) that happen to have the right lineage.”

Funny, the Democrats say the same thing about the the wealthy Bush supporters and American workers in this country.

David,

“Funny, the Democrats say the same thing about the the wealthy Bush supporters and American workers in this country.”

And I don’t disagree.

David,

While I am a conservative, I’m not a Republican. I’ve never been a card-carrying member of any political organization.

I agree to some extent about keeping the prices higher- I have been living in Germany for the past 3 years, and gas is heavily taxed! I believe the average price per liter was ?1.44 (which is $5.45 a gallon). Yes, in the short term it sucks for us to have to pay such a high price (and believe me, there are still many who drive 150 mph+ on the Autobahns), but it has forced the efficiency of engines to be much higher, as well as encouraged the use of alternative fuel. There is a plant based diesel alternative that costs nearly the same per liter as gas. Also a majority of cars here are much smaller than those in the states.

Ideologically I consider myself to be a conservative against excessive taxing, but I do have to admit that in this case it seems to be working..

Stephanie,

There was a time in my lifetime when I thought card carrying members of the RNC had reason to be proud of saying so. The RNC was an excellent minority party and did a fantastick job of checking a host of Democratic excesses.

As a majority party, if I were a card carrying member of the RNC I would have sent it back to them by now. Smaller government? Where? In Iraq maybe. Fiscal responsibility? Where? In Russia perhaps. Individual freedoms from intrusion by government? Where? Certainly not in the Patriot Act.

Very interesting post and reply posts. This should be required reading for our leaders and Congressmen.

David,

I’m too young to have ever considered being a card-carrying member of either the Republican Party or the Democrat Party something to be proud of. When I find a single political party that shares enough of my views to be worth my support, I’ll let you know. Somehow, I doubt that will happen.

I don’t see the contradiction. The Middle Eastern case, for example, the people didn’t know about the oil and relied on foreign technologies, expertise and labor to get it out. AND once they got it they had no incentive for any kind of hard work since they could live off the revenues.

Wrong. The Middle East did know about their oil, and how to get it out on their own. For much longer than the West:

>In the 8th century, the streets of the newly constructed Baghdad were paved with tar, derived from easily-accessible petroleum from natural fields in the region. In the 9th century, oil fields were exploited in Baku, Azerbaijan, to produce naphtha. These fields were described by the geographer Masudi in the 10th century, and by Marco Polo in the 13th century, who described the output of those wells as hundreds of shiploads. (See also Timeline of Islamic science and technology.)

David

I didn’t say oil was fungible (although it is). I said energy is fungible. Personally, I think there is a lot of oil still to be tapped at the right price. I don’t want to pay that, however. It would be better to go into alternative forms of energy. Oil is particularly problematic politically and ecologically precisely because it is so easy to get and use. And because it so irregularly distributed around the world.

BTW – energy prices today are lower than at almost any time in our history in comparison to incomes and buying power and/or time (wood fuel used to be free – and still is some places – but it takes a lot of work to get it.

Re – wealth distribution. It depends how you get it and what you are doing with it. And there are plenty of wealthy democrats who could stand to give up a little of the wealth they didn’t actually earn. Kennedy and Kerry leap to mind.

Re – card carrying member of the Republican Party, I became that a couple of years ago. When I got to the point in my life where I had some money, time and influence, as a consequent citizen I thought I should put some of it to use where I think it will be best for my country and society. A party is a big compromise and amalgam of interests. There are lots of things I don’t like about the party or individual members of it. But overall I like it better than the alternative. My other option is to complain that everything would be better – IF. That is very comforting, since it is always easier to think you could do something when you really don’t have to do it, but it is not useful.

BTW - I don’t share the negative assessment of our country and economy. We have many challenges, but we are meeting them. In every important respect (except urban sprawl, people’s manners & obesity) America today is better than the American I was born into.

Todd

I am not sure how you are using the term “snob”. I think the word you might be looking for is “smug”. I know that I seem to be dismissing the hardship higher prices will cause. But the problem is we really can’t sustain low prices. Low prices are costing us too much. People will have to change their lifestyles. We might have to choose to live closer to work or public transport. We may have to choose more fuel-efficient cars and maybe we can make fewer trips or walk more. It is not my choice. People can still – if they want – continue their current habits, but they will have to cut something else. I face the same choices as everyone else. I am only smug because I don’t mind making them.

Jack Says:
“People can still ? if they want ? continue their current habits, but they will have to cut something else. I face the same choices as everyone else. I am only smug because I don?t mind making them.”

The problem Jack is the people most effected by the higher gas prices, are the middle and lower class. While I agree that there are some luxuries, which these people could cut, i.e.: Cable TV, Soda, etc… What about the people who can’t cut anything else? Most of the lower class has to constantly worry about making rent. The higher gas prices only add to their daily misery. Maybe they should start cutting out dinner?!?! That way they can afford to drive to work each day so that they can still provide shelter for their starving children.

Sorry Honey, we can?t eat today because everyone with money needs to drive an SUV to make that rough drive through the city.

Sincerely

We can always make that argument about any change. Someone will suffer more and that someone will always be the poor because that is pretty much the definition of being poor. Prices force people to make choices they would not otherwise make. I don’t think they SHOULD cut out other things. I think people should make lifestyle changes that allow them to use less gas.

You have to take up both sides of what you are saying. If you don’t want the price to rise, how else do you intend to lower demand for gas? You can try to ration it. That is a very inefficient means and it usually falls into a black market price anyway. We tried price controls in the 1970s. We just got higher prices AND gas shortages - a predictable result.

You might say that people need gas, but some people need less than others and this need is often the result of their choices. People choose to drive bigger cars. They choose to live farther from their work or father from public transport. They choose to drive instead of taking a bike or walking. Oh yeah, they choose to live in places where biking or walking are impractical.

The problem with socializing individual costs is that you take away all incentive to do better. If there is no additional personal cost to driving, people will drive more. Of courses, they will tell public opinion polls that they would like to take public transport or they would drive less to save the environment – but they won’t really do these things unless they see the cost of not doing them.

The conspiracy would not be to raise the price of oil, but rather to keep it low - just low enough to discourage development of viable alternatives.

What does that remind me of… Oh yeah, the energy bill the Republicans just passed. It’s chock-full of taxpayer billions to subsidize the oil industry. Conspiracy? Naw. Just a good investment in politicians.

But as the price of fuel stabilizes…

Dream on, perplexed. The age of cheap oil is over. Supply will never again meet demand.

Hell, Cheney’s been making regular trips to Canada recently, scoping out their tar sands. At $80/barrel, that stuff starts to look recoverable.

…Probably by Chevron, whose new ad campaign features the slogan, “The era of easy oil is over.”

Forgive my ignorance, How does the weakness of our USD$ factor in the cost per barrel?

Jack,

I realize what you are saying and completely agree. The only problem is that the high prices for gas are lowering the demand mostly within the poor population. IMO, the large part of the problem lies with the people who can afford the towering prices. The gas price is irritating to the wealthy but devastating to the poor. I drive to work, and see hundreds of SUV and large trucks which shows that the people who can afford the gas really don?t care how high the prices rise. They are going to drive their new H3?s whether gas costs $2 or $10 per gallon. These same people may or may not realize that every mile that they drive in their ridiculous vehicles only hurt more and more people, but they really don?t seem to care. Why?

It seems that the only way we are going to be able to get a viable alternative to the high gas price is once the rich are negatively affected. And it is sad to say that it will take a lot more than $5 per gallon to get that negative affect. So how high are prices going to get before we can see some change? How long will the Mid and Low class going to have to suffer?

Justin

Oil is sold in U.S. dollars, but neither most of the buyers or sellers are American. They buy and sell in other currencies. When the dollar is strong, a barrel of oil costs a European more in Euros than when the dollar is weak. The same goes for people in other currencies. So the price of oil varies for many buyers with the price of a dollar. If the guy selling the oil wants to buy something in Europe, he can buy more with the dollars he gets for a barrel when the dollar is strong, less when it is weak. So a person or country with worldwide interests looks at the price of oil in terms of the various currencies of the world. In order to make the same money worldwide, he has to raise the price (if he can) (in dollars) when the dollar is weak and can accept a lower price (also in dollars) when the dollar is strong and still have the same buying power when he spends a week in Rome.

Sincerely

There is no reason to tease one particular product (like gas) out of the general basket of what people need to buy. We could make the same argument about food or clothing, cars or houses. The rich can always buy more than the poor by definition.

If we keep the price of oil artificially low to help the poor, we are only encouraging them to use an artificially high amount of it. We really can’t charge for gas based on the ability to pay and throwing out the value of a market price in the interests of equality doesn’t make much sense either.

The rich are in some ways as price sensitive as the poor. I am not talking the very rich, just the ordinary rich. They have money, but they don’t like to spend it wastefully. That is one way they got rich. They also have the means to conserve. (Life is not fair, I know). I don’t know of any studies of mileage per gallon versus income, but I do observe that around my relatively affluent neighborhood I see a lot of Honda Civics or Toyota hybrids and fuel-efficient cars. When I go back to my old neighborhood, which is less affluent, I see a lot more SUVs and big cars.

The relatively affluent are often early adopters of new technologies. In that sense, they subsidize the developments.

Jack,

You’re saying market forces are a better way to deal with the issue than organization and preparation. I think the market is amoral. It can strike the economy dead by the way it can rapidly change.

MPG limits worked. Conservation of energy in California has had AMAZING results (California barely consumes more electricity now than it did 10 years ago, with almost double the population). Limitations in emissions in California WORKED (ten times the number of miles driven, half the pollution).

MPG averages have fallen due to the loopholes placed on “heavy vehicles”. The U.S. will not collapse WITHOUT S.U.V.s. They are a luxury.

The reason we regulate housing codes is because people will build houses that fall on top of their heads without them. When an act of god strikes, pre-planning saves us. (Earthquakes are less damaging, hurricanes are less damaging, abrupt changes in the stock market are less damaging).

Julia

If you read my various posts, you know that I don’t advocate a society completely free of regulation or government. It must be good government and good regulations.

I think of the market like nature. Nature is also amoral. There is a lot humans can do to improve it (at least from the human point of view) and nobody lives in a really natural environment. But there are limits to what we can do and it is always easier to work with rather than against nature.

Regulations that work with market forces are effective. Sometimes regulation gets credit for things it didn’t accomplish or things that could have been accomplished better in other ways. MPG is a good goal, but higher prices will achieve that faster than regulation. In fact, you saw this. During the 1970s, when the price of fuel was high, efficiency improved. When the prices dropped in the 1980s and 1990s, we started to slide back. This occurred under Reagan, Bush and Clinton and under very different regulatory regimes. In the last couple of years, you have seen demand plummet for the gas hungry cars and shoot up for the efficient ones - again, no change in the regulations. In fact, since this was the Bush Administration I can’t believe anyone would give any credit to the Feds.

So regulations can assist when the market is already moving in a particular direction. They can also help slow backsliding, but they can’t turn the tide.

As for SUVs, they are much affected by the price of gas. Compare the gas bills of a Hummer see and you see how much “tax” a high gas price puts on the SUV.

I guess I just think that the price should reflect the market forces. I don’t like SUVs and prefer to ride my bike to work, but it is none of my business what people choose to drive if they are paying the cost of doing it.

jack says:
“I guess I just think that the price should reflect the market forces. I don’t like SUVs and prefer to ride my bike to work, but it is none of my business what people choose to drive if they are paying the cost of doing it.”

But the SUV drivers are not the only ones paying the cost of doing it. Every one is paying the cost for their luxury.

Not if they are paying the price of their gas etc.

We can well make the argument that “everyone pays” in almost any thing. What about driving in general? I consider anything up to about 20 miles biking distance. So everyone who insists on driving such distances is consuming too much gas and “everyone pays”. Or consider this about an SUV. If you compare an SUV to an ordinary car, the SUV gets about 20% worse gas mileage. What if the SUV driver just doesn’t drive one day a week. Maybe he takes a bike to work or telecommutes. Now is he still making us all pay? What about someone who doesn’t drive at all, but travels a lot by plane? How much high grade fuel does he use?

You know the biggest offenders against “us” are people who drive old cars. An old car can make 25 times the pollution of a new one. They get both no luxury and a really bad impact. In fact, anyone driving an old AMC Hornet or a little Gremlin is making a lot more pollution than someone driving an SUV. In (more) fact, a person mowing his lawn with a power mower is making more pollution than a person driving an SUV.

As a bike rider, I feel little sympathy for fat people. You might say it is their business, but considering the higher costs of medical care and the need for bigger seats on planes and cinemas – we all pay.

Of course, they could say that, as a bike rider, I have a greater chance of being hit by a car (maybe an SUV) in which case my cost of medical care is higher.

The reason I like the market is precisely because it doesn’t carry these value judgments and we don’t have to bring the nanny state into it.

Jack, c’mon, you know energy is only as fungible as it is transportable. Have you come up with a way to transmit electricity across oceans, yet? To be fungible, it must be distributable to all who create a demand. So, no, all energy is not fungible. Fact is, oil pretty much was the only fungible energy source meeting the bulk of the world’s energy needs at an affordable price. Those days are very, very numbered.

With the relative ease of converting from nuclearly produced domestic energy to nuclear weapons, do you think we should replace oil as a fungible energy source with nuclear rod materials?

And what happens to the environment when most nations create power with nuclear plants within economies that don’t permit safe and permanent storage of their nuclear waste materials? Radiocativity in the food chain is fungible. Given the global distribution of foods, by the end of this century we could generate enough human mutation to create homo reclinus permanentus! :-)

I think the article makes a lot of sense. I’m posting in response to one of the 1st responses wrongly claiming that oil is being pumped at peak capacity. This is nowhere near the trueth.
OPEC decides how much oil to put on the global market at any given time. OPEC operating as a cartel and monopolizing a majority of the worlds oil reserves allows them to keep prices higher then necesarry. Saudi Arabia increased oil production by millions of gallons within a week a few months ago in answer to pressure to lower prices. The oil rick Saudi royalty, along with other middle eastern tyrants have no interest in pumping oil at peak capacity, it would lower profits.

J. Anthony,

My comment about snobbery had more to do with your style of writing than some of your points. “The poor denison … (Please, Ludlow, pass me the kippers while I finish this sentence about the rabble) …

And people living on top of the oil . . Really. Is there a pile of oil in D. C. we don’t know about??

I do love your statement, “low prices are costing us too much”.

Do tell Snuffy.

Another thing to remember is that oil is not just the base for gasoline, but for plastics and other products as well. Sustained higher prices for oil will have a much broader effect than just the cost of energy consumption.

Todd

That’s funny. But you know I make fun of everybody.

Several of my bosses have told me that it is my insouciance that keeps me from really getting ahead in organizations.

I am a little disrespectful (snobbish?) about people who get rich quick through random chance or anything else not closely related to their own exertions. Most of the states that depend on oil just had the good fortune to be near the resource. They did nothing beyond that to develop it. BUT if you look at states that depend on oil for most of their revenue, you don’t find many places you would really want to live absent the black gold.

You know that a country like Switzerland or Singapore is rich – despite relatively few resources. Places like Saudi or Kuwait just have money. The two overlap, but they are not the same.

kd et all,

read this:
http://www.nytimes.com/2005/08/21/magazine/21OIL.html

”You look at the globe and ask, ‘Where are the big increments?’ and there’s hardly anything but Saudi Arabia,” he said. ”The kingdom and Ghawar field are not the problem. That misses the whole point. The problem is that you go from 79 million barrels a day in 2002 to 82.5 in 2003 to 84.5 in 2004. You’re leaping by two million to three million a year, and if you have to cover declines, that’s another four to five million.” In other words, if demand and depletion patterns continue, every year the world will need to open enough fields or wells to pump an additional six to eight million barrels a day — at least two million new barrels a day to meet the rising demand and at least four million to compensate for the declining production of existing fields. ”That’s like a whole new Saudi Arabia every couple of years,” Husseini said. ”It can’t be done indefinitely. It’s not sustainable.”

For people who don’t like Jack’s idea of higher oil costs being a good thing, I got an interesting e-mail about boycotting. I’ll post it if anyone’s interested.

Sorry. Never mind. I feel completely debunked.

Just because the states that have oil have taken advantage of it, doesn’t make them bad. It makes them smart. Don’t be jealous. Jack, maybe
you can do something to get rich and have everybody say that you shouldn’t have all that money. It’s not fair for you to have and us to have not. Understand? That’s that mental disease called liberalism getting into your head.

Rich

I am rarely called a liberal.

I don’t have any trouble with people making money or being rich. My point about the oil states is that they often don’t work for it or even know the wealth is there. It isn’t the wealth that bothers me. It is the instability caused by this particular kind of wealth. So my complaint is not normative. It is just practical re oil.