YESTERDAY PEOPLE: THE U.S. CONGRESS - STONE AGE SOLUTIONS IN THE HYDROCARBON AGE

OIL SURGES OVER $134 ON SUPPLY WOES, WEAK DOLLAR. (Reuters – May 21, 2008) “Weakness in the U.S. dollar encouraged Wednesday's buying spree by bolstering the purchasing power of buyers holding other currencies, dealers said.”

OIL PRICES PASS $134 AFTER REPORT OF SUPPLY DROP. (AP – May 21, 2008)
“With demand for oil growing in the developing world, and little end in sight to supply problems in producing countries such as Nigeria, few analysts are willing to call an end to crude's rally.”

So, is it the weak dollar or the time-honored story of supply & demand? Whatever the underlying cause, the fact remains: we have an energy crisis, so what do we have to do to solve it? Not to worry. Our politicians are stepping up to face this newly emerging crisis.

1. The Senate calls in the oil company executives (May 21, 2008) and Senator Durbin (Illinois Democrat) berates them for having no “corporate conscience”. "Is there anybody here that has any concerns about what you're doing to this country with the prices that you're charging and the profits that you're taking?" Durbin asked.

According to the unbiased reporter from Associated Press, “The titans of America's oil industry sat quietly for a moment.” And further, from that fair and balanced reporter, “The executives, sitting shoulder to shoulder in the hearing room, said they understood people were hurting, but they tried to blunt the emotion with economic analysis.”

How dare the Oil Company executives blunt emotion – and with economic analysis, of all things?

2. The House votes to pursue legal action against OPEC “CONGRESS' LATEST ANSWER TO RISING GASOLINE PRICES: SUE OPEC” (The Los Angeles Times, May 21, 2008)
“Defying a White House veto threat, the House on Tuesday overwhelmingly approved legislation that would allow the Justice Department to pursue legal action against the Organization of the Petroleum Exporting Countries for conspiring to restrict supplies or drive up prices.”

So, the Democratic House goes in a direction different from the Democratic Senate and wants to lay the blame for our oil-related problems squarely on OPEC, of all people.

3. Barack Obama “wants windfall profits tax on oil companies.” (The Guardian April 25, 2008). “Democratic presidential hopeful Barack Obama today called for a windfall profits tax on oil companies, which he said would be used to ease the burden of rising energy costs on poor and middle-class Americans.”

So, Barack Obama throws his lot in with the ‘tax windfall profits’ gang founded by Jimmy Carter (and we know how well that worked for him) and recently joined by Venezuela’s Hugo Chavez. Chavez announced his ‘windfall profits tax’ in April 2008, claiming that it is necessary to fund key social programs as part of his effort to implement an economic and social system he calls "21st-century socialism."

With all this political posturing, confusion, finger pointing and hand wringing, where do we look for answers? Certainly not to our elected officials who have never some to grips with the fact that, other than through enacting tax related measures and caving in to the manic demands of the environmental lobby, they have negligible power over global markets. In fact, the sum total of their proposals will not produce one additional drop of oil. We are in the Hydrocarbon Age, reaping the rich harvest of rewards of this gift from God. Just as the Stone Age did not come to an end because we ran out of stones, the Hydrocarbon Age is not coming to an end because we're running out of oil.

According to the website http://www.partnershipforenergy.com (a project of The American Petroleum Institute), "As global demand for oil increases, many people are asking how our nation’s oil needs will be met in the coming decades. The good news is that America isn’t running out of oil—and neither is the rest of the world."

"New extraction and refining techniques have opened up opportunities to explore for oil cost-effectively in oil sands, oil shale, and coastal lands and waters. New oil discoveries worldwide would provide billions of barrels of oil for years to come. In the U.S. and Canada alone, these discoveries include:

• Up to 4.3 billion barrels of oil in oil shale in North Dakota’s Bakken Formation
• Up to 19 billion barrels of oil in oil sands in Utah
• More than 30 billion barrels of oil in Alaska’s coastal plains and the Chukchi Sea
• An estimated 173 billion barrels of oil from oil sands in western Canada
• More than 1.2 trillion barrels of oil in oil shale in the Green River Formation in Colorado, Wyoming, and Utah.

What does it mean? 1 billion barrels of oil could provide enough fuel to keep more than 1 million cars running for the next 30 years."

Now I know that Big, Bad Oil is supposed to be the enemy, Congress is our friend (assuming you pay no attention to Nancy Pelosi & Company's approval ratings) and the environmentalists all have our best interests at heart.

How about a novel approach? Might it not make sense to listen to the people who best know about oil, the oil industry itself?

YESTERDAY PEOPLE - JIMMY, HUGO & BARACK

or- DON QUIXOTE OBAMA - TILTING AT WINDFALLS

Windfall Profits Tax 101: How to Make the Producers Pay and Damn the Consequences.

1. April 1980: Windfall Profits Tax - JIMMY CARTER - SOCIALISM FOR THE UNITED STATES IN THE OLD CENTURY

In the United States, President Jimmy Carter signed the Crude Oil Windfall Profits Tax Act into law in April 1980.

The windfall profits tax was forecasted to raise more than $320 billion between 1980 and 1989. However, the government collected only $80 billion in gross tax revenue and, to the extent that the tax was deductible against corporate income, the actual net realized was closer to $40 billion.

According to the Congressional Research Service, the 1980 windfall profits tax depressed the domestic production and extraction industry and furthered our dependence on foreign sources of oil.

2. April 2008: Windfall Profits Tax - HUGO CHAVEZ - SOCIALISM FOR VENEZUELA IN THE NEW CENTURY

Venezuela starts collecting new windfall profits tax on oil companies, as part of President Hugo Chavez' plan to gain a larger share of oil company profits.

President Chavez, a Socialist, has said the tax is necessary to fund key social programs as part of his effort to implement an economic and social system he calls "21st-century socialism."

Critics say the tax will slow investment and development in the oil sector, and also discourage other foreign direct investment in Venezuela.

3. April 2008: Windfall Profits Tax - BARACK OBAMA - SOCIALISM FOR THE UNITED STATES IN THE NEW CENTURY

“Obama wants windfall profits tax on oil companies” (The Guardian April 25, 2008). “Democratic presidential hopeful Barack Obama today called for a windfall profits tax on oil companies, which he said would be used to ease the burden of rising energy costs on poor and middle-class Americans.”

Campaigning in Indiana, Obama selected a gas station as the forum in which to announce his attack on “…the energy lobby, (who) have blocked ‘meaningful relief’ to consumers hard hit by high gasoline prices.” He went on to say that, "It isn't right that oil companies are making record profits at a time when ordinary Americans are going into debt trying to pay rising energy costs. That's why we'll put a windfall profits tax on oil companies and use it to help Indiana families pay their heating and cooling bills and reduce energy costs".

Obama's campaign did not indicate how much money a windfall profits tax would raise.

I shouldn’t be surprised at Mr.Obama’s evocation of the present policy of Hugo Chavez or the past policy of Jimmy Carter. I was surprised, however, that he decided to make his policy announcement at that gas station. He very well could have caused a crowd to gather, evoking images of the lines of those waiting for gas in Jimmy Carter’s time.

Oh well. Just another example of Mr. Obama’s commitment to change.

Now, we know that the Socialists, Liberals and Progressives all love the idea of taxing, their DNA demands it. Most especially, they insist on taxing the producers for, as Willie Sutton explained that he robbed banks ‘cause that’s where the money is’, Liberals tax where they can find the most capital. The possibility that such capital might better be utilized by the producers to expand exploration and production has no appeal.

And specifically, we should ask why the whole question of windfall profit taxation exerts such a strong attraction for the Democrats. Why is it their philosopher’s stone? Is it because there is such an imbalance between the ‘obscene’ profits of the oil companies and the taxes they pay in the normal course of events? Is it because of the extremely beneficial impact that these windfall profit taxes will have on the underlying problem of energy use and availability? Well, at the risk of being accused of using facts rather than emotion, let’s see what history shows us.

It may be an oversimplification, but the truth of the matter is that the price paid by the consumer for oil products is only partially dependent on the price of crude and the costs of transporting and refining it. Historically, "..taxes of various kinds add substantially to the price of the finished product, and greatly exceed the cost of the original petroleum."
(THE AGE OF OIL - Leonardo Maugeri, 2006)

As to the comparison between oil profits made and taxes paid, in the final quarter of the last Century the oil companies paid about 2 trillion in taxes to the federal and state governments – about triple what their profits were for the same period. So, it seems that the real recipients of windfall profits were the governmental taxing agencies who made three times what the rapacious oil companies made. Do you suppose it might be possible for these agencies to impose windfall profit taxes on themselves?

As to the beneficial impact of such Liberal policies on the underlying problems of energy availability and cost, do you remember asking yourself about that as you waited in Jimmy Carter’s gas station lines then - or do you ponder over all the promises made by Nancy Pelosi and company a year and a half ago and the complete lack of accomplishment since then?

The Democrats are trying to characterize John McCain’s campaign as an attempt to establish the 3rd term of the George Bush presidency. Would that they were right. I would much prefer that to what Obama is promising, the 2nd term of Jimmy Carter.

YESTERDAY PEOPLE - THE HIT MAN COMETH

DER SPIEGEL’s man in Washington DC, Gabor Steingart, in his weekly column WEST WING on April 23, 2008, asks the question,

"Will the Democrats Commit Political Suicide?"

“Democratic voters just can't make up their minds between Barack Obama and Hillary Clinton. In Pennsylvania, they denied him victory but spared her defeat. It will be the job of the superdelegates to commit political murder -- but will it mean suicide for the party?”

In other words, the Democratic Party's super delegates, as the final arbiters in the selection of their party’s presidential candidate, must kill off one of their own. In this case, they must deny the nomination to either a woman or a black and, in doing so, run the risk of alienating one of their principal constituencies. These super delegates will operate on grounds both selfish and altruistic. Selfish, in that either as elected officials, union functionaries, or whatever, their collective choice will influence their individual job security. Altruistically, in that as committed liberals, their choice may influence the country’s direction over at least the next 4 years. However, as most of them would seem to be inhabitants of the eighth circle in Dante’s hell, they may be loath to add murder to their catalog.

I think I have the answer to their dilemma, one that lurks right under their noses, one that in fact resides within their bosom. Fortunately for them, there is one amongst their number, a fellow super delegate and one of their heroes, who is perfectly situated to deliver the Judas’ kiss. One amongst them who is able to act as their Brutus, delivering the final cut without ever unsheathing his knife.

Super Delegates of the Democratic Party, may I present you with James Earl Carter, the 39th President of the United States, a fellow super delegate and your ideal hit man. As a result of his disastrous presidency, his political activities and statements since losing his bid for re-election and, especially, his bone-headed efforts to negotiate the unnegotiable with the unspeakable in the last several years, he has now become a bipartisan pariah.

All the peanut farmer has to do is choose between Barack the Rock and Hillary Hardplace and unleash his TCE (Toxic Carter Endorsement). Just say the word, Jimbo, and whomever thou so blesseth shall be history, and the unblest one will go on to lead a wounded and divided party against the forces of right.

As Cain said to Abel, “Have a good day, bro”.

YESTERDAY PEOPLE - JIMMY CARTER

April 16, 2008

According to today's New York Post, "Former President Jimmy Carter warmly embraced a Hamas leader, praised Yasser Arafat and accused Israel of holding up the peace negotiations as his controversial Mideast tour reached the West Bank yesterday. Carter hugged and kissed Nasser Shaer, a former deputy prime minister in the Hamas-led government who was the highest ranking politician arrested by Israel during confrontations in 2006 and 2007."

In 1976, the peanut farmer from Plains, Georgia became the 39th President of the United States for one simple (and ill-conceived) reason. In the wake of Richard Nixon's downfall, the collective American psyche decided that we couldn't find ability and integrity in one person and, therefore, had to sacrifice one to get the other.

So what if Nixon had negotiated the cease-fire that ended JFK and LBJ's Vietnam War, established detente with the USSR, opened up diplomatic relations with China, had a thriving economy? He was held responsible for a 2nd rate burglary, tried to cover it up, and was forced to resign in the face of impending impeachment. Gerald Ford assumed the mantle, unconditionally pardoned Nixon, invoking the enmity of the press and the public. In the wake of all of this turbulence, the electorate opted out on the ability thing and settled for integrity (or so they thought).

As a result, the country enjoyed the administration of James Earl Carter, a man-made disaster which, thank God, was limited to one term. Four years that were marked by double digit interest rates, stagflation, an economy with a growth rate that had plunged to less than 1/3 of what it had been, long gas lines, our Embassy in Teheran being taken over and hundreds of Americans held as hostages by Iranian students, failed rescue attempts, the creation of two new cabinet-level Departments - Energy and Education - one more worthless than the other.

But, as liberals will tell you, the outcome doesn't matter, it's what's in one's heart that counts. He meant well, so it's okay. So what if his policies created problems? If the economy went south, if the public school system kept deteriorating in spite of all the money he dumped into it to appease the teachers' unions, as long as his heart was in the right place. It's not his fault if the drop-out rate rises and the literacy rate goes in the other direction. If many of the larger cities governed by liberal politicians kept deteriorating, well, he meant well.

However, in 1980, even the Democrats were fed up and tried to get him not to run for re-election. Teddy Kennedy challenged him for the nomination but Carter prevailed and then, thank the Lord, lost to Reagan. Obviously, the electorate had reversed themselves and concluded that, after all, it was possible to get ability and integrity in one package, a very attractive package called Ronald Reagan.

So, here we are years later. Having been awarded the Nobel Peace Prize in 2002 (the whole world is thankful for the era of peace he established in the Middle East, especially Palestine), the peanut man is off on another of his unsanctioned swings through that area. Despite the urgings of the President of The United States and both political parties, ex-President Jimmie Carter is embracing the terrorists of Hamas and blaming Israel for not doing enough to appease their tormentors, to mollify those who would wipe them off the planet.

He had already proven his lack of ability. Now he's won the daily double.

So, Hillary hide! Obama duck! Somewhere out there is a TCE (a Toxic Carter Endorsement) which will destroy one of you.