June 19, 2008

Oogo Fever: After Big Oil, Can Big Food and Big Gun Be Far Behind?

Hatched by Dafydd

Nothing much happened this week. Oh, yes, I almost forgot: A plurality of likely Democratic voters said the federal government should nationalize the entire oil industry. (By the end of next week, I expect George Will to join them, preening all the way.)

According to Rasmussen Reports:

A Rasmussen Reports national telephone survey found that 29% of voters favor nationalizing the oil industry. Just 47% are opposed and 24% are not sure.

The survey found that a plurality of Democrats (37%) believe the oil industry should be nationalized. Just 32% of voters in Barack Obama’s party disagree with that approach. Republicans oppose nationalizing the oil industry by a 66% to 16% margin [16% of Republicans think we should follow the lead of Oogo Chavez? Great leaping horny toads.] Unaffiliated voters are opposed by a 47% to 33% margin.

I blame public schools.

Meanwhile, marginal Democratic Rep. Maxine Waters (D-CA, 85%) called for "socializing" the oil industry on a House panel in May:

John Hoffmeister from Shell Oil: I can guarantee to the American people because of the inaction of the United States Congress ever increasing prices unless the demand comes down and the five dollars will look like a very low price in the years to come if we are prohibited from finding new reserves and new opportunities to increase supplies.

Rep. Maxine Waters: And, guess what this liberal will be all about? This liberal will be about socializing... uh, will be about, basically taking over and the government running all of your companies.

Then last Monday, another Democrat in Congress, this time a much bigger fish, has joined the call... at least to nationalize the nation's oil refineries. From a video clip shown during the "all-star" panel on Special Report With Brit Hume last night:

REP. MAURICE HINCHEY, (D) NEW YORK: Do we own refineries? No. The oil companies own refineries. Should the people of the United States own refineries? Maybe so. Frankly, I think that's a good idea.

Just in case the above seems vague, here is Hinchey (D-NY, 100%), who sits on the Appropriations Subcommittee on Interior, Environment, and Related Agencies and the Natural Resources Subcommittee on Energy and Mineral Resources, clarifying his position... this time on a video played on Neil Cavuto's show on Fox News:

If there’s any seriousness about what some of our Republican colleages are saying here in the House and elsewhere about improving the number of refineries, then maybe they’d be willing to have these refineries owned publicly, owned by the people of the United States, so that the people of the United States can determine how much of the product is refined and put out on the market. To me that sounds like a good idea.

The dirty, little secret is that Democrats really do believe that there's no connection between supply and price... because they sincerely believe in a secret oil-company Illuminati-like conspiracy to keep prices high. Thus, they "reason," it doesn't matter even if we triple or quadruple the world oil supply: Somehow, Big Oil will conspire to hide the oil and raise the price even more.

An article in yesterday's Investor's Business Daily makes the point:

Others have found a new culprit: speculation in oil markets.

Senate Majority Whip Dick Durbin, D-Ill., a close ally of Obama, held an Appropriations Committee hearing Tuesday into just that.

"Increasing evidence shows that the run-up in crude oil prices and gasoline is being driven by larger trader banks, pension and hedge funds. Speculation may have as much, if not more, to do with high gas prices than any Saudi sheik."

Well, yes: The oil futures market has a huge influence on the current price of oil and gasoline. But that doesn't mean it's all controlled via illegal manipulation by a cartel of speculators and oil companies... it just means that investors consider future supply when they decide how much they're willing to value a barrel of oil today.

When you combine a deeply conspiratorial mindset with a propensity to believe in State control over private control, it's no wonder that the Democratic mind tends to see Capitalism itself as a giant pyramid scheme: They don't trust markets, they don't trust the profit motive, they don't trust Big Tobacco, Big Oil, Big Food, Big Gun, or Big Garment. Heck, they don't even trust the very people they claim to speak for... which is why they must speak for them, of course.

Democrats as a collective (how apt) trust only one "big" on the planet: Big Government. What does that profound difference in worldview mean? Slither on to read more...

The further from the apex of power you look, the more blatant Democrats are about wanting a "progressivist" tyranny of the proletariat, guided by the invisible fist of the Party. Thus Maxine Waters, lower on the DNC totem pole, is willing to come out and say "This liberal will be about... basically taking over and the government running all of your companies;" but the much more powerful Maurice Hinchey only suggests nationalizing refineries, not the entire industry.

And even further down the progressivism food chain, 37% of Democratic voters answer Yes to the question, "Should the government nationalize all the oil companies and run them on a non-profit basis?", while they're evenly divided on the following question: "Suppose a major oil company discovered an alternative energy source that would dramatically reduce the price of gas and other energy sources. If that new energy source would make a lot of money for the oil company, should the company be allowed to keep those profits?"

They don't stop to ask themselves, if this "major oil company" isn't going to be allowed to keep the profits of their invention that would "dramatically reduce the price of gas and other energy sources," why would they bother inventing "an alternative energy source" in the first place?

When you begin shuffling down the Socialist superhighway, you are quickly faced by two reality-based questions that have bedeviled progressivists for more than a century:

  • If you remove the profit motive, with what incentive do you replace it? Why should people work hard if they won't personally benefit? We're not angels in the forms of proles.
  • Once you nationalize an industry, you also "own" the consequences: You can no longer blame the opposition, impersonal forces, or external enemies. What do you do if things get worse, not better?

To resolve the first question, many Democrats now call for a "Manhattan Project-like" crash program to completely substitute "alternative energy sources" for fossil fuels (geothermal cars, windmill-powered airplanes, whatever). They believe that virtually all great inventions and innovations come from government, not the private sector -- which merely hijacks what belongs to "the people" and exploits it to line their own pockets.

But the reality is that aside from very limited and special circumstances such as the pressures of world war, government almost never innovates anything anywhere. It can fund, it can organize, it can certainly help secure exploitation rights of the private developer. But it, itself, does little to bring new products onto the shelves.

Even enormously valuable federal projects, like the nuclear labs, NASA, and DARPA, generally work to demonstrate broad, fundamental engineering principles and concepts; they leave the process of actually making those concepts workable and bringing them to market to the private sector. (And even for basic research, private companies give the government stiff competition: Who has developed more useful inventions, DARPA or Bell Labs?)

The second question is more devastating to the progressivist theory: If the State "owns" energy produciton, in all senses of the verb, then when things begin going badly, everybody will necessarily blame the State. What does a progressivist lawmaker do then?

We see this Catch-22 playing out today: To placate the environmentalist lobby, Democrats have prevented us obtaining oil offshore, from shale, along the outer continental shelf (OCS), in the deep waters of the Gulf of Mexico and the Caribbean, and in ANWR. But now we have premium gas approaching $5 a gallon here in California.

For some unfathomable reason, voters are pointing the finger at the Democrats who actually caused the problem, rather than accepting the Democratic mantras that it's all the fault of the "failed policies of the Bush-McCain administration" and that "We can't drill our way out of an oil shortage."

Democrats are going to have to do something; something other than haul oil-company executives before congress and harangue them for three hours. But that "something" will probably be to double-down: They will pull drilling bills from the Congressional docket and not let them be voted; they will push an extension of the drilling ban through the House and will try to do so in the Senate (where Republicans will stop them by filibuster); and they will attach ludicrous environmentalist riders to bills that have nothing to do with energy or the economy.

Each of these somethings will be to the same effect: To drive up the price of gasoline higher and higher, because the anointed ones simply know better. They have the vision, and they deserve to rule.

Democrats clearly take their cue from the Marxist machinations of Venezuelan President Oogo Chavez, who nationalized the Venezuelan oil industry starting in May, 2006. So how well did that work out?

In fact, it appears to have been about as successful as Robert Mugabe nationalizing all the farmland in Zimbabwe (where in this case, "nationalizing" means butchering the white owners, their wives, and their children, seizing the land, and handing it over to tribal Mugabe supporters... remarkably similar, if rather more thuggish, than the mass land-snatch committed by the Sandinistas the last time they ran Nicaragua).

Chavez first ordered all oil companies operating in Venezuela to pay a huge chunk of their revenues to the government, unilaterally rewriting longstanding contracts... in the name of the People, naturally. Democrats defended this as "social justice;" real Americans saw it as State extortion.

When that didn't get Oogo enough cash, he went ahead and nationalized the entire industry... and then he fired all of the geologists, engineers, and other professionals at the State-run oil company, PDVSA (Petróleos de Venezuela, S.A.), and replaced them with Oogo cronies:

The Venezuelan government claims that between 2006 and 2012 it will reinvest $76 billion of its earnings to increase production, but analysts canvassed by the three reporters who wrote the story think that the figure comes closer to between $2 and $5 billion a year--a drastic short-fall. Moreover, many of PDVSA's activities are now unrelated to oil--it has hatched subsidiaries to distribute powdered milk, or to mill corn, or even to build boats. (Anyone who knows Venezuela can imagine the lush opportunities this offers for illicit enrichment by the agency officials or the military who work with them.) Meanwhile, as oil production falters, the state company has decided to take on more employees. When Chavez took office PDVSA had 48,000 workers. It now has nearly 75,000, and the president-dictator has announced plans to hire an additional 30,000 by the end of next year. (One cannot help recalling the case of the Argentine YPF, which was the only oil company in the world that lost money in the go-go 1970s!)

This kind of crony capitalism is pushing Venezuela to the edge. Under these circumstances it won't take much of a decline in oil prices to destabilize Chavez's regime.

Meanwhile, Venezuela is experiencing a collapse of its (national) health-care industry to respond to epidemics of infectious disease, a collapse of its food industry, and a sweeping crisis of confidence by its people -- even the poor -- in the Venezuelan strongman:

But for each minor policy shift or good economic statistic from the government, Mr. Chávez has stirred deeper anxiety by intensifying threats to expand state control of the economy and society. For instance, Mr. Chávez warned Monday that he would nationalize large food distributors caught hoarding groceries.

Pedro E. Piñate, an agricultural consultant in the city of Maracay, said: “We live in two countries, one inhabited by officials who think they can alter reality by sending soldiers to intimidate citizens. The other country is where the rest of us live in fear of being killed or kidnapped or of our businesses being seized.”

But how can these trivial setbacks dampen the enthusiastic support of Democrats who still think that Fidel Castro is the savior of Cuba, the Sandinistas were a revolution of poets, and who still wear their faded, tie-dyed Che t-shirts? They are far more apt to follow Oogo even farther down that road, because the alternative is for Democrats to admit that they have been wrong all this time -- and to spit in the face of the special-interest lobbyists that maintain them in power. (That is, they would have to commit political suicide.)

The Great Dictator has now begun to nationalize other industries and threatens to nationalize the entire economy. He even tried to give himself full dictatorial powers last December, via a new constitution -- including the power to remain president-for-life. How long before Democrats seize upon a weak-tea version of that "solution" to the second problem?

All it requires is to identify some sector of the economy, no matter how small, which is not yet under direct control of progressives... and nationalize that, too. When that fails, find another. And another. And yet another. Thus they can stave off complete collapse until the current crop of Reids, Pelosis, Obamas, and Murthas retire.

But Democrats are unwise to rely upon the unwisdom and lack of intelligence of the people; the people have a refreshing tendency to be smarter than the Left thinks them. For example, Oogo himself was resoundingly defeated in his attempt to become the Supreme Tyrant of South America six months ago... and now, per the New York Times article above, there is for the first time in years a very strong political opposition building in Venezuela for the regional elections this November, in response to Oogo's overreaching.

And I believe we're going to see the same dynamic here as well: The overreach by Barack H. Obama and the Don't-Drill, Windfall, Nationalizing Surrendercrats is at least as egregious, relatively speaking, as that by Chavez: We expect more sanity from our leaders than they do in South America. (For example, Chavez was overwhelmingly elected in 1998 even though, just six years earlier, he had attempted to seize power in a coup d'état.)

I believe Obama's risible pandering to every nutty theme and meme of the New Left will finally drag him down, ensuring John McCain's election; and I believe the Democrats will not do anywhere near as well as they hope in the Congressional elections. They might even lose some seats, which could mean losing one or both houses of Congress.

I never bet against the wisdom of the American people; but Democrats stake their party's entire future doing just that every two years. They filled a gut-shot straight on the river in 2006, but the odds are against them doing it twice in a row.

Hatched by Dafydd on this day, June 19, 2008, at the time of 6:16 PM

Trackback Pings

TrackBack URL for this hissing: http://biglizards.net/mt3.36/earendiltrack.cgi/3083


The following hissed in response by: hunter

Exactly, Dafydd.
This is one of the most destructive forms of politics in the history of this nation.
To even consider the theft of one of the largest industries in the nation is disgusting.
We either stand together for the private sector and liberty, or we all lose it.

The above hissed in response by: hunter [TypeKey Profile Page] at June 19, 2008 8:51 PM

The following hissed in response by: SR

OK: let's have the government build some refineries and try to run them competing with private oil companies. What a laugh.

The above hissed in response by: SR [TypeKey Profile Page] at June 19, 2008 9:14 PM

The following hissed in response by: Dishman

"You can't drill your way out of this."

Note to Dems:

You can't think your way out of a problem...

if you're committed to not finding a solution.

The above hissed in response by: Dishman [TypeKey Profile Page] at June 19, 2008 9:18 PM

The following hissed in response by: Dan Kauffman

Oh Yes I do want the Oil Industry run by people who can't even run a restaraunt and stay out of the red.

The above hissed in response by: Dan Kauffman [TypeKey Profile Page] at June 20, 2008 5:51 AM

The following hissed in response by: Geoman

"You can't drill your way out of this."

Drilling is usually more effective than wishing, hoping, and dreaming.

The above hissed in response by: Geoman [TypeKey Profile Page] at June 20, 2008 9:25 AM

The following hissed in response by: BarbaraS

This is what I am afraid of. If Obama wins and the dems hold congress and with the liberals in SC they can make whatever laws and accomplish by fiat whatever they want. And the American people would be helpless to stop them. Buyers remorse won't help them. Look at the SC decision on habeas corpus. If the SC can rule that anybody in the world can have habeas corpus even before a US citizen can what else can they rule on? Every liberal goal that they think up? This is why all republicans MUST band together (and forget about the their little pet peeves) to defeat these people. Our very way of life depends on it. Venezuela is going to have a bloody road to go back to a democracy. Pray God we don't have the same.

The above hissed in response by: BarbaraS [TypeKey Profile Page] at June 20, 2008 9:28 AM

The following hissed in response by: Zelsdorf2

It is perfectly clear what the results of not drilling are. I am paying more at the pump. I am sure there are several reasons, but doing nothing except waiting for some undeveloped technology to save us is stupid. Oil shale was once to expensive to try, now with the price of oil, it is a good idea to try. We are in the situation we are in because we have let convervationist tree huggers influence beyond their numbers, what we do in this country. I would forcefully remove all of the modern conveniences from these people and let them return to the pre modern era.

The above hissed in response by: Zelsdorf2 [TypeKey Profile Page] at June 23, 2008 4:39 PM

The following hissed in response by: Zelsdorf2

It is perfectly clear what the results of not drilling are. I am paying more at the pump. I am sure there are several reasons, but doing nothing except waiting for some undeveloped technology to save us is stupid. Oil shale was once to expensive to try, now with the price of oil, it is a good idea to try. We are in the situation we are in because we have let convervationist tree huggers influence beyond their numbers, what we do in this country. I would forcefully remove all of the modern conveniences from these people and let them return to the pre modern era.

The above hissed in response by: Zelsdorf2 [TypeKey Profile Page] at June 23, 2008 4:39 PM

Post a comment

Thanks for hissing in, . Now you can slither in with a comment, o wise. (sign out)

(If you haven't hissed a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Hang loose; don't shed your skin!)

Remember me unto the end of days?

© 2005-2009 by Dafydd ab Hugh - All Rights Reserved