 |
"Gas is expensive because Bush has oil interests!"
"When Bush took office, gas was $1.46 a gallon."
The former statement is just a catchphrase for a shithead. The second is true, but ignores the fact that two years before, gas was 77c a gallon, here in Indy. In other words: It doubled under blubba clinton in two years, and neoliberal shitheads declared it to be a "Good Thing". When it doubled again under Bush, in 5 years, during a war in the Middle East, with a frothing nutjob in Venezuela and strife in Mexico and Nigeria, along with a massive demand increase from China, India and other developing nations, that was a "Bad Thing".
This by itself should be sufficient grounds for declaring the Democratic Party a subversive organization, jailing its leadership under RICO, and striking the right to vote from all its non-felon members (which are a minority at this point).
However, the Accused is entitled to a fair trial. I'm afraid it can't be one by its peers, because I'm able to think rationally and logically, do not think George Bush is a malevolent god who controls the world oil economy, and actually studied useful subjects in school instead of worthless bullshit like "womyn's studies" and "modern culture." However, if you pay attention to this brief outline, then seek atonement with a good course of science, math and logic, you may one day aspire to be my peer.
Let us commence. Our source for this first section is the Energy Information Administration, of the Department of Energy.
Sources of US Oil:
Barrels per month as of Feb 08: 154K domestic, 10K US Virgin Islands
365K imported
71K Canada
43K Mexico
47K Saudi Arabia
41K Venezuela
29K Nigeria
11K Algeria (halved since September)
22K Iraq (doubled since December, but very sporadic)
So, as we can see, Iraq is a very small part of our oil supply, about 2% of the total. Also, as Iraq is developed, at US expense, its domestic need for oil is increasing. Currently, Iraq imports more than it exports. This is exacerbated by the fact that it has only one port, poorly placed, and therefore oil is difficult to ship.
If the war was in fact, about oil, we'd either seize Mexico or Venezuela, where our Navy could be far more effective, or just flat out BUY the Russian oil industry for less than the cost of a war. Capitalists generally detest war, because it makes long term profit planning difficult.
Now let's look at the history of gas pump and crude prices:
1993 Apr $1.06 $17.55 bbl
1994 Apr $1.04 $14.30 bbl
1995 Apr $1.13 $18.28 bbl
1996 Apr $1.22 $20.73
1997 Apr $1.24 $17.52
1998 Apr $1.07 $12.33
1999 Feb $0.94 It bottoms out here at $10.59
1999 Apr $1.15 and starts a dramatic correction $15.05
2000 Apr $1.54 $24.72
2000 Jul $1.69 peak price under Clinton, up 50% in 15 months $28.29
So where was the outrage? Clinton's leadership caused a dramatic increase in a very short time. Liberals didn't complain.
2001 Apr $1.48 $23.06
It starts fluctuating a lot here.
2001 Dec $1.10 11 $16.05
This is where I'm confused. Under Bush, after Sep 11, the price was DOWN 50%. Clearly, Bush' policies were working. Clinton is the obvious failure here.
2002 Apr $1.41 $24.15
2003 Apr $1.67 $25.20
...still not more than under Clinton. And war had started with Iraq. I don't get it. Wasn't this war about oil? About making his buddies rich? Get the margin per barrel is DOWN. The adjusted pump price compared to crude for 1999 would be about $1.94.
2004 Apr $1.82 $32.88
Yikes, look at the crude cost . Yet we're STILL cheaper than the $2.52 adjusted for crude cost of 1999. Note that this adjusted cost doesn’t allow for standard inflation. So, the oil companies were taking a bite in their profits, in an attempt to keep the market happy. Those evil bastards!
2005 Apr $2.25 $45.43
up 50% over Clinton peak... but not in 15 months, in FIFTY-TWO months. Horrors. Only double the pump price of a decade before, which, when adjusted for inflation, is perfectly reasonable, and DOUBLE the crude price. Sounds fair enough to me. I'm trying to figure out who the bad guy here is. Surely it can't be Bill Clinton?
2006 Apr $2.63 $63.40 crude price.
Are we paying triple the 1996 price, which would be $3.66 in UNADJUSTED dollars, over $4 adjusted? We are not. What's the problem?
2007 Apr $2.75 $60.93 crude price
2008 Feb $3.03 $93 crude price.
That's over $7 gal in adjusted dollars, with standard markup from the 1996 price. Hmm...60% discount. Boy, those oil companies sure are fucking us, eh? Slimy bastards. What are we paying now in April?
2008 Apr, about $3.75 and $120 bbl. Adjusted, that would be $9.23/gal, not accounting for inflation.
If you expect me to believe that the oil companies are getting "Rich" due to their buddy Bush and his "oil interests," you're going to have to actually show me something concrete. It looks as if they're taking a pasting on margin. Just because they're bringing in more total dollars, even in the profit column, doesn't mean their margin is any good.
Next, let's look at that "Record profit": French oil company shows record profit. So did Dutch Shell. So, this isn't just a US event.
But wait! Some companies are LOSING money because of the disparity between crude and pump:
http://www.csnews.com/csn/news/article_display.jsp?vnu_content_id=1003708582
http://www.cnbc.com/id/23005502/
We can see that above, of course. The crude price is way up, the pump price is about 40% of the adjustment. The number is high, but the margin is low. The margin is far lower than your credit card company's. Of course, Bush doesn't have "credit card interests," so why should we care if they assfuck us? What about pharmaceutical companies? What about media companies, whose expenses are almost non-existent, and generate all their revenue from advertising those horrible corporations while telling you how bad things are? Is there perhaps a conflict of interest there?
Here's another quote:
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/27/AR2005102702399.html
For instance, in 2004 Exxon Mobil earned more money -- $25.33 billion -- than any other company on the Fortune 500 list of largest corporations. But by another measure of profitability, gross profit margin, it ranked No. 127.
A $9.9 billion quarterly profit is mostly a function of Exxon Mobil's size. It had sales of $100 billion this quarter, more than any other U.S. company. 10% ROI. Filthy fuckers! What is Citi making on credit cards? Oh, wait. 22% plus some fees and surcharges, right? Minus operating costs... doesn't sound like the banks are suffering. Ah, here it is:
For example, Exxon Mobil's gross margin of 9.8 cents of profit for every dollar of revenue pales in comparison to Citigroup Inc.'s 15.7 cents in 2004. By percentage of total revenue, banking is consistently the most profitable industry in America, followed closely by the drug industry. Altria Group, the maker of Marlboro and other cigarettes, made 22 cents for every dollar of revenue in 2004, and pharmaceutical company Merck made 25.3 cents for every dollar of revenue in 2004.
Wait, here's more: http://www.msnbc.msn.com/id/8646744/. That left the industry with a happy problem - what to do with enough cash to fill a supertanker. Many publicly traded oil companies have been busy buying back their own stock, which helps drive up the price of the rest of the shares left on the open market. Since January 2002, stocks of major oil companies have gained 88 percent; during that period the Standard and Poor’s 500 index has gained less than half as much.
Oil producers have also given investors a raise by gradually increasing the dividends paid out to shareholders. And they’ve paid down their debts to record low levels. ExxonMobil, for example, is virtually debt-free - with a cash pile of more than $25 billion.
Waaaaaaiiiit! INVESTORS are profiting? Like, middle class people with portfolios, IRAs and mutual funds?
Back to the article... Not all of the proceeds from the surge in oil prices has gone straight to the industry’s bottom line. As oil prices rise, so do oil companies' costs. For starters, they pay royalties to governments that lease the rights to drill - a payment that ranges as high as 18 percent in the U.S. Domestic oil producers also pay taxes of about 40 percent, according to Gheit. So as the price of oil rises, so does the bill for royalties and taxes.
Oil producers also have to spend money to keep oil flowing from aging fields, by drilling more holes in the ground to squeeze fewer and fewer barrels out of the same fields. The cost of these oilfield services, everything from drilling rigs to pipelines, has risen by as much as 50 percent over the past five years, according to Gheit. So the cost of maintaining existing levels of production is now consuming more than half of the industry’s annual capital outlays, most of which used to go to discovering new oil fields.
Woah...the oil industry has OPERATING COSTS????
Now, Hillary wants to "Take those profits."
There are two considerations here. Both are basic economics:
As I noted above, some people should be prohibited from voting, because they're gullible enough to think that there's such thing as a tax that "someone else pays." And the leadership of a certain political party, which would rake off massive amounts of taxpayer money, deceptively, to the additional detriment of a large employer that provides a necessary strategic resource upon which the entire country depends, should be charged with racketeering and jailed.
Democrats are the real traitors to America, which is why they bleat so loudly about others. They don't want the attention on themselves. Let's not forget that she can't do anything about any non-US corporation. They'll just refuse to deal with the US, or mark their prices accordingly.
What can you do about this? You can't do a fucking thing about this, any more than you can do anything about gravity.
The important question is, "Who cares how much they make?"
Are we getting fuel? Are we getting it at an affordable price relative to the economy, the market and the need? So who cares? This is more of that left-statist bullshit that we can't allow anyone to actually make a buck (as opposed to the right-statist bullshit that no one should EVER enjoy themselves).
Now, let's look at gas prices in adjusted dollars, for inflation: http://oregonstate.edu/cla/polisci/faculty-research/sahr/gasoline_prices.pdf. On page 2, we see that the 1998 dip was the lowest adjusted price in history, AND during 2002 under BUSH was the SECOND LOWEST IN HISTORY, and took place AFTER Sept 11. It's still below peak, though it did bounce over in 2005. And recovered. It is just now verging over record again, but crude prices have increased almost an order of magnitude.
Still not convinced? Try this handy visual: http://www.swivel.com/graphs/edit/1091923
Let's briefly discuss that crude cost. The law of supply and demand rules all business. There is no way around it. If the government attempts to set prices, it must assume responsibility for using tax dollars to make up any shortages, and create a bureau to manage a given situation. This costs more tax dollars. The end result is an increase in costs. Like gravity, supply and demand cannot be ignored, ever.
Current trends in the market are due to:
Now, some will blame this latter on capitalism, but that would be incorrect. The capitalists are using capital to develop new oil fields and technologies. These speculators contribute nothing. They are mere locusts and unmanly.
The problem we will face in the next few years is that when this speculation bubble pops, crude prices will plummet. This is a bad thing. We have a record supply on hand. This is also a bad thing.
The reason these are bad: The resultant down side is that will mean it will be far less cost effective to produce and develop new oil fields. Currently, $80/barrel is the minimum production price factored into developing new oil fields. If it drops below that, those fields are simply not exploitable.
Prices will go down, then they will go back up, as they have done before.
What can we do about this?
We can't do anything about this.
Now, stop whining, and try being a man.