Posted by
Dave on Friday, June 06, 2008 7:27:41 PM
An infamous milestone was reached today on the oil market: a $10.75
spike in the price of a barrel of oil; the 8.8% increase is largest
one-day increase ever. But that's just the start: analysts also
announced that due to increased demand in Asia, the price of oil could
hit $150/barrel by July 4 -- an additional 8.2% over the next month.
There
are many factors involved in the increase in the price of oil and
gasoline, but we can lay the ultimate blame for the impact on the
American economy on one entity: the government of the United States of
America, and its utter refusal to drill for oil that we already know we
have.
Whether we're talking about oil shale in Colorado, the
Gulf of Mexico, the Outer Continental Shelf, or the Alaska National
Wildlife Refuge, we have known reserves of oil that would help
increase the supply of oil on the global market. Even most politicians
know that increasing supply relative to demand lowers prices -- that's
classic Economics 101.
But instead of increasing supply, politicians in the United States have colluded and conspired to reduce
supply and increase prices paid by Americans by banning the extraction
of our known oil reserves. To take the focus off of their greedy
actions, they put up a smoke screen by blaming the oil companies. In
short, the government is criticizing the oil companies for the results
of their own policies. A more Orwellian scenario is hardly imaginable.
But
wait: it gets worse. Record-high gasoline prices are not good enough
for certain politicians. Not only does official government policy
artificially increase the price of oil, natural gas, and gasoline, the
actions they are attempting to take in response will further. The presumed Democratic candidate for President, Barack Obama, favors increasing
taxes on oil companies -- the so-called "windfall profits" tax.
Because corporations pass along taxes to the consumer, this would
immediately increase the price of gasoline, heating oil, natural gas,
electricity, and every petroleum- and petrochemical-related product, as
well as shipping other goods and services as transportation costs
increase. But that's just the immediate impact. Longer-term, the
prospect of lower potential profits decreases the incentive for oil
companies to engage in the risky and expensive endeavor of searching
for new oil deposits. Instead, we'll be even more dependent on the oil-exporting countries, many located in the unstable Middle East.
As
if that weren't bad enough, we're still not done counting the ways the
government is attempting to screw us on energy prices. Both presumed major candidates for President, Obama and
Republican John McCain, favor a "cap-and-trade" system for reducing
so-called "greenhouse gas" emissions. As detailed in numerous other
sources, this will only serve to increase the price of gasoline
further. The ostensible benefit of cap-and-trade remains undefined.
If a private company were to undertake actions that have such a
deleterious impact on American individuals and families, they would
rightly face civil and perhaps criminal legal action. Instead, its the
government engaging in actively creating an artificial scarcity of
oil. Instead of being shamed for shameful behavior, the politicians
pat themselves on the back and wax eloquently about their righteousness.