Another Liberal Myth – The US has no energy policy

-By Dan Scott

I have even heard my coworkers repeat the talking point that Democrats love to continually repeat. “The country has no energy policy.” The reason why we seemly don’t have an energy policy which would bring stable energy pricing is that we have had 30 years of political meddling in the nation’s energy supply starting with President Carter.

I find it interesting that President George W Bush is being blamed for the Democrat Party’s pandering to environmental extremists for over 30 years and yet the Democrats have the nerve to claim the US has no energy policy when in fact it does. The policy is the culmination of legislation enacted by Democrats over 30 years. Blaming someone else for the consequences of one’s own actions is a liberal tactic called Blame Shifting.

It wasn’t George W Bush who banned drilling offshore, it was the Democrats.

It wasn’t George W Bush who banned drilling in ANWR, it was the Democrats.

It wasn’t George W Bush who cancelled the breeder reactor program which would have dealt with most of the high energy radioactive nuclear waste, it was the Democrats (specifically President Carter).

It wasn’t George W Bush who blocked the construction of nuclear power plants, it was the Democrats and their allies, the environmental extremists.

It wasn’t George W Bush who blocked the construction of gasoline refineries, it was the Democrats and their allies, the environmental extremists.

It wasn’t George W Bush who restricted oil and gas leases in many areas of the country, Congress controls the number of leases via legislation, it was the Democrats and their allies, the environmental extremists who determined where and how much was to be made available.

It wasn’t George W Bush who restricted using the oil shale reserves, it was the Democrats and their allies, the environmental extremists.

It wasn’t George W Bush who restricted the use coal to oil conversion, it was the Democrats and their allies, the environmental extremists.

It wasn’t George W Bush who cancelled coal powered electric power plants recently, it was the Democrats and their allies, the environmental extremists.

The track record is clear, it was the DEMOCRATS and their environmental extremist allies all the way restricting the supply of oil creating an artificial shortage. In short, it was the meddling, know-it-all, incompetent Democrats expressing Charles Schumer’s mentality who believe the government should DIRECT energy policy via Central Planning and not let the coal & oil companies supply energy according to the needs of the market place because they (Democrats) arrogantly think they know better than the producers, suppliers and consumers of energy.

It stretches credulity to blame George W Bush for not anticipating the run up of oil and gas prices, yet somehow Democrats have the nerve to accuse George W Bush for what? Not seeing or doing something to undo their own foolishness? That’s called gravitas. How can George W Bush do anything when it is Democrats who have had the power of the legislative agenda at least for the past two years? And what did they do for two years? Nothing. More broken campaign promises.

However, this blame shifting is not isolated to President Bush, the other favorite patsy is the market speculator. You know, those greedy capitalists who buy and sell futures contracts. John Stossel nicely outlined the problem for us why it is wrong to blame the market speculators for today’s oil prices. Even the Wall Street Journal touched upon the blame shifting by politicians.

However, both of these articles are lacking the context of why oil and gas prices are high. That context is the oil industry responds (reacts) to the meddling of government edicts which directly affects the availability of oil and gas. As I have reminded you, the reader, of who did the meddling and why, it becomes clear the real culprits of the current high prices are not the market speculators since they are RESPONDING (reacting) to the availability of the commodity BECAUSE of the MEDDLING by DEMOCRATS creating an artificial shortage of supply. Just as the oil companies can not magically wave the wand to make a piece of ground produce oil when there is none to be had, neither can the market speculator magically wave the wand to balance the supply of oil with the demand of the consumers of oil. The high price of oil is a REFLECTION of the tight balance between supply and demand. Blaming the speculator is blaming the messenger.

For some of you, including John McCain, who don’t understand the functioning of a Capitalist economic system and specifically the role of the future’s market I have included some excerpts and their links. It is vitally important that as a free people we educate ourselves as to how the world functions, otherwise slick talking politicians will be misleading the public to advance their own agenda at the public’s expense. The alternative is to trust politicians like Charles Schumer whose Socialistic vision of the world got us into this mess in the first place by artificially restricting supply because of pandering to some PC agenda. How’s that been working so far? Here is just another prime example of why Socialism always fails in the long run. When will we learn?

“Finally, the real purpose the commodities futures – or any futures contract
for that matter – is to facilitate the transfer of risk from one entity to
another. On either side of any deal you’ve got two parties each with a
different outlook on the future. Each participant is willing to take on the
risk of price increases or declines over time.

That’s what makes commodity trading so intriguing for many individuals – the
mere fact you can find someone that perhaps thinks very differently than they
do and are willing to possibly take a position in a commodity that opposes
their own. And for traders or speculators that like the rush of a good
competition, you can’t get much more competitive than trading in commodities.”

“There are basically two reasons that trading in futures has become so popular.
The first is that these contracts can be used as a hedge against price
movements in a commodity’s price. In other words, the trader wants to “lock
in” the price paid for a commodity.

The second reason futures trading is so intriguing is because there can be
short term market inefficiencies that traders can take advantage of – we’ll
explain this a little later. The price of futures contracts can move around
quite a bit, even in the short term. In addition, traders can assume a
leveraged position – meaning they only need to put up a fraction of the
contract’s value. And price volatility coupled with financial leverage can
spell big profits for a trader on the right side of a transaction.”

An excellent example of using futures contracts would be Southwest Airlines. They locked in the price of jet fuel years ago and thus aren’t suffering the price spikes now being reacted to by all the other airlines. You noticed this because Southwest doesn’t have to charge $15 for checked luggage. By anticipating the price of oil or any commodity you can protect yourself, your customers and your bottom line from uncertainty. The other airlines weren’t as savvy as Southwest, they stuck with the short term spot market and now you get to pay for it.

Speculators add liquidity to the market and allow suppliers to focus on what they do best, create and move their product. Liquidity is the degree of conversion between a hard asset to a portable means of value like money. This allows companies like Shell, Exxon Mobil, etc to focus their expertise and capital on extracting oil and gas. The speculators and marketers find the true value of a commodity at any given time. It is this true value that then spurs investment dollars by producers to expand capacity which increases supply.

Finally, I believe for John McCain’s sake I need to make some points about Capitalism in general since he is so easily is misled the appeal of Socialism. All investment comes from profit, without profit there is no seed money to expand or improve production. One look at the failure of the Soviet Union should have enlightened you about this central elementary principle of Capitalism. The next time you blame the oil companies for making “obscene” profits, you need to answer just where do you think that money is going??? The second principle of Capitalism is the price sensitivity of the supply and demand balance. The value of any product is NOT the cost to produce the product, it is the value the customer assigns it. Such narrow thinking comes from the Socialist idea of calling profit, excess cost. The greater the profit of any product, the greater the number of businesses who enter the market place to compete for the consumer’s valuation of the product. The more competitors there are, the more product is created is to satisfy the customer’s demand and thus puts downward pressure on the value. Which brings me to the third and most important principle of Capitalism, the price or value of a product does not go up proportionally in response to high consumer demand or low supply, in a shortage (such as has been created by the incompetence of Democrats regarding oil production), the price increases exponentially to limit the demand and re-establish the balance between supply and demand. These so called obscene profits are promptly funneled by a business to increase production and grab market share against their competitors. Making a profit keeps you in business in order to make future profits, what good is one time income today, what will you do tomorrow?

My question to John McCain and the rest of the liberals is: If Capitalism is so bad, then why did the Chinese Communists legalize private enterprise? And what were the results? You are either part of the solution or part of the problem. Stop vilifying the market when government interference created the problem, take responsibility, that’s what leaders do. That means John McCain, you have to CHANGE the current energy policy in place for 30 years to reflect the reality of this current period. I have outlined how we got here, now comes the hard part, do you have the vision and intestinal fortitude to make that CHANGE???? Obama and many of the Democrats do not.
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Dan Scott calls himself a “Member of the Global Capitalist Cabal preaching Capitalism and personal responsibility as the economic solution to world poverty.” He is also a member of the 14th Amendment Society — victimhood is a liberal code word for denying the civil rights of others. He is also a proud member of the Global Warming Denier Cabal, insisting that facts not agendas determine the truth.

Dan can be seen on the web at http://www.geocities.com/fightbigotry2002/ as well as http://www.geocities.com/dscott8186/saidwebpage.htm, And can be reached for comments at dscott8186@yahoo.com.