Posts Tagged ‘oil’

I’m having flashbacks to the Teapot Dome Scandal in the mid 1920s’ after I read this article on CNN about the Oil Whistleblower.

History certainly does have a way of repeating itself. Something tells me that there’s going to be a lot of uncovering of dirty laundry after Bush and Cheney are gone. Get the paper shredders ready Dick!

Not long ago, I wrote a blog about the most idiotic economic political scam of the 2008 election year. Today, I read to stories about our economy that rank up there with the “gas tax vacation”.

The first story was about how the Fed has adjusted it’s estimates for 2008:

  • Economic growth of 0.3 – 1.2%, instead of 1.3 – 2%
  • Unemployment rate 5.5 – 5.7%, instead of 5.2 – 5.5%

Good thing they are still running those antiquated economic formulas to give us these otherwise worthless numbers. An added bonus is that the Fed also adjusted their inflation estimate upwards.

There really should be no surprise here folks. Bernanke just needs to start reading my blog to get better guidance on economic policy. I’ve written about energy-based inflation before. Of course, I even wrote about it years before that in a paper for an upper division economics course I was taking in college. The professor said it was an unrealistic theory.

Why I keep talking about this college professor is because that is what economists are learning in college (not all colleges, of course). Our economists are morons because they were trained to be morons!

Meanwhile, back in the world of ridiculous economic news for May 21, 2008… The other bit of economic news that really got me chuckling today was the news about the oil executives going before Congress again. How many times are we going to have to watch the same FAKE political interrogation? This is a political SCAM. The oil companies are pulling an Enron. Only, the goal is not to get California to sign a ridiculous long-term energy contract… The goal is to get the United States to open land restrictions in Alaska, the Rocky Mountains, and/or the Pacific Ocean so the oil companies can go drilling for oil. Enron is small potatoes compared to this scam.

Is Chevron Price Gouging? A friend of mine stopped at a gas station in Goleta, CA, the other day. He was shocked to see what was going on. Students from UCSB mindlessly paying for gas that was priced 53 cents higher than gas stations right down the street. Gas stations that are within visual distance of University Chevron.

With all the ways to communicate (cell phone, txt, Internet) is price gouging really a problem of the company that’s doing it? Or is this a problem with the customers? Anyone who is purchasing gas at this Chevron for 53 cents higher than the station right down the street is wasting my property tax money. My taxes keep their tuition low, and they are just wasting it. The problem isn’t Chevron. The problem is our colleges.

I’ll keep it really brief:

  1. Bring more attention to the “gas tax holiday”
  2. Point out how both of your opponents support it even though it would just put more money into the already fat pockets of oil companies
  3. Remind people that both Clinton and McCain support this ridiculous economic gimmick, and ask the public to decide who we think Clinton and McCain are really supporting
  4. Ask America if we want more of the same flat economy over the last 8 years with failed fiscal policy after failed fiscal policy
  5. Win handedly, so you are officially running against John McCain and then keep bringing up the fact that McCain supported this very, VERY bad economic gimmick

Free as a courtesy to democracy in America!

I have my fair share of critical remarks for economists in general. I’ve mentioned before that my econ professor a few years ago gave me a B on a paper where I theorized that constantly increasing energy prices would leader to inflation that could not be controlled by the Federal Reserve. He, like many economists, is misguided. That’s part of the reason I disliked my economics degree program. It was mostly a bunch of bologna.

However, there is one other segment of the public policy industry that is even more… well, they are just idiots when it comes to economics. This group is known as politicians, particularly presidential candidates. In an article today, Reuters reported that McCain and Clinton both support a “gasoline tax holiday“. The idea would be to suspend the federal tax on gasoline over the summer.

Folks, it doesn’t get much more idiotic than this! This would drive the demand of the gasoline up, while nothing would happen to the supply. The net result is a continued rise in gas prices, putting more money into the pockets of Exxon and friends (to give them even greater profits). Then gas prices would shoot up almost 20 cents instantly after Summer.

Obama’s points should have just shot up at least 10-20% since he didn’t support this moronic policy!

 

Just last week, I has started publishing information about energy-based inflation. I had the idea and predicted it in a paper I wrote for an economics class almost 5 years ago. It was the first, and only, B graded paper I had ever written in an economics class. The professor gave it this low grade because he ultimately disagreed with me that energy could cause a ripple of inflation in the American economy.

This morning, I check my email to find further support for my theory of energy-based inflation. The Washington Post published an article about how Coal Can’t Fill the World’s Burning Appetite. To sum up their article, circumstances have shot the price of coal up by 50% or more over the last five month. While this short-term spurt in price may be able to be absorbed by businesses, don’t count on it. The price of coal is not going to be coming down any time soon. Same with oil.

What does this mean for America? Well, if you read the report from our government, guess where we get 49% of our energy from? If there is a sustained increase in the price of the resource that generates 49% of all of our energy, you can bet your house that prices are going to go up everywhere!

The bottom line is that energy is driving inflation in our economy, not interest rates. Watch what happens to all the rate cuts by the Federal Reserve this year. They will go to offset the energy costs. It will temporarily stabilize energy inflation, but it is not a permanent solution. Energy costs will rise, and the Fed will be powerless. Changes in the energy market are the only thing that will curb energy-based inflation. I’ll post my solution on Wordscause this evening.