As I look back on the elections over the past decades I am increasingly struck with how undemocratic our elections are. To a large extent this is imbedded in our Constitution, though the framers thereof had no way of knowing the extent to which this system would create a totally undemocratic outcome. Of course at the time the Constitution was drafted and ratified there were only thirteen states. There were undoubtedly variations in the sizes of their population but the discrepancies were small compared to what exists today. Article 5 of the Constitution provides for the manner of amending the Constitution, but then goes on to say, “Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate.” The first portion of this applies to protecting slavery and the second apparently was a necessary compromise for any of the thirteen states, which were afraid of losing representation. But what has happened as a result of this compromise?
We now have a situation where California the state with the largest population, has a population according to the 2007 census of 36,553,215. The state with the smallest population, Wyoming, has a population of 522,830 but both states are entitles to two senators in the US Senate. This is the equivalent of each voter or potential voter in Wyoming having his/her vote counted 69 times for each time a Californian voter gets his/her vote counted, or to put it another way, each voter in Wyoming can vote 69 times. If we were to put it this way the outrageous unfairness of this would be apparent, but little if any attention is paid to this crime against Democracy.
Well, the Senate was intended to equalize the states rather than people and the House is supposed to be the “People’s House.” But even the House, where the inequality of voters is not as great it is in the Senate, comes out with inequality because the Constitution mandates that every state shall have at least one Representative. Thus Wyoming with a population of 522, 830, has one representative in the House while Montana with a population of 957, 861 has one representative as well, or put it another way, a vote by a resident of Wyoming has almost twice the value of one in Montana. And carrying this to its logical or absurd conclusion, which ever the reader may prefer, if there were to be a major outflow of population from one state, or if some multi-billionaire were to buy all the land in one small state and evict the tenants from his/her property, he/she alone could legally appoint two Senators and one Representative and could cast three electoral votes for President.
This in fact happened in Great Britain. Allow me to quote from Wikipedia, “The term 'rotten borough' referred to a parliamentary borough or constituency in Great Britain and Ireland which had a very small population and was "controlled" and used by a patron to exercise undue and unrepresentative influence within parliament. Such boroughs existed for centuries, although the term rotten borough only came into usage in the 18th century. Typically rotten boroughs were boroughs which once had been flourishing cities with substantial population, but which had deteriorated, declined and become deserted over the centuries (see abandoned village).
“The true rotten borough was a borough of an extraordinarily small electorate. A similar type of corrupt constituency was the pocket borough — a borough constituency with a small enough electorate to be under the effective control (or in the pocket) of a major landowner.
For many years, constituencies did not change to reflect population shifts, and in some places the number of electors became so few that they could be bribed. A member of Parliament for one borough might represent only a few people (or even just one — the buyer), whereas cities which had become important, such as Manchester, had no separate representation at all (eligible city residents were, however, able to vote in the corresponding county constituency; Lancashire county for Manchester).”
But when we get to the Electoral College the unfairness becomes more pronounced again and lies somewhere between the Senate and the House. Wyoming again comes out as the most favored state. It need only 174,277 votes per electoral vote, while in Texas 703,070 votes are needed per electoral vote. To put it another way, anyone living in Wyoming gets to vote four times for everyone who votes in Texas.
Then to make things even worse we have the system where all the electoral votes of any state shall go to the winner, so that in a state that is closely divided, every vote counts and the candidates devote much time and money courting voters in that state. But if a state should be predictably in the column of one party or the other, then individual votes don’t count, because the margin of victory is irrelevant. This means that closely divided states get the attention of the candidates, and the interests of those states are paid close attention by the candidates, but one party states can be ignored. They simply don’t count in the outcome of the election. The election will be decided by what is called “swing states.”
Monday, June 23, 2008
Monday, June 16, 2008
Obama vs. McCain
On June 2 I posted a commentary entitled "More about McCain".
I also published that commnentary in my local newspaper, "The Suburbanite". This prompted a Mr Chiu to respond with a Letter to the Editor, which appeared in its June 13 edition. This in turn caused me to submit my further response, which will be printed in next Friday's edition of that paper. I think this exchange of letters highlight the issues as seen from both sides, and accordingly I want to post both letters. Below is Mr. Chiu letter.
My response appears below.
To the Editor:
I am delighted that Mr. Chiu has decided to debate on your pages. Your readers will be well served by such a debate.
I love his way of debating. He uses all the standard Republican canards. Roe vs. Wade is not about abortion he says. It is about. “Legislators make laws and courts and judges interpret the law.” Of course we can all agree that "Legislators make laws and courts and judges interpret the law.” But what happens when the court strikes down laws passed by legislators. Aren’t they overruling the will of the elected representatives? Aren’t they activist? Well not if I agree with the decision Mr. Chui might say, “The court is interpreting the Constitution.” Well isn’t that what the court was doing in Roe vs. Wade. Well, Mr. Chiu might say there is nothing in the Constitution that specifically says that a women has a right to choose whether to carry a baby". But Mr. Chiu, there is nothing in the Constitution that specifically authorizes the Supreme Court to strike down any laws. There is nothing in the Constitution that specifically provides for the Federal Reserve, or the FDA. There is nothing in the Constitution that specifically says corporations shall have the same rights as real people. But the court interprets a document, which is short and vague, and we all, at different times, are upset by what they say it means.
So we need a better measure of what an activist judge is. How about one that looks at it from the standpoint of which judges vote to strike down laws passed by the people’s representatives, most often. The latest statistics I can find on this cover the period from 1994 to 2005, before Roberts and Alito joined the Court, but after all the other judges now there, had been appointed. At that time the “liberal judges” were the same as now. Souter, Stevens, Ginsburg, and Breyer, but the right wing judges were, Thomas, Scalia, Kennedy, Renquist, and O’Connor. Not quite as Right as the present court, but it will have to do. How did they stack up on overruling the will of elected representatives? Here are the figures:
Thomas 65.63 %
Kennedy 64.06 %
Scalia 56.25 %
Rehnquist 46.88 %
O’Connor 46.77 %
Souter 42.19 %
Stevens 39.34 %
Ginsburg 39.06 %
Breyer 28.13 %
Wow! The liberal judges go against the will of the elected representatives much less often than the Right wing ones. By the way Souter and Stevens were appointed by Republican Presidents, Stevens by Ford and Souter by G.H.W Bush.
The Court just handed down a decision that says the Constitution means what it says. Habeas Corpus – the right of people not to be incarcerated without being charged on the basis of evidence cannot be suspended, or in the language of that august document “The Privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it. (Section 9, Clause 2) I don’t believe we have been invaded, and I am not aware of any rebellion.” and Bush said he disagreed with it. But McCain, intemperate as usual, and anxious to outdo Bush said, “a decision which I think is one of the worst decisions in the history of this country." I would ask, worse than locking thousands of Americans in internment camps because they had Japanese ancestry? (Korematsu v. United States -- 1944) worse than forcing African Americans to sit at the back of the bus? (Plessy v. Ferguson -- 1896)...worse than slavery? (Dred Scott v. Sanford -- 1857).
But McCain make it clear on his website that he would not be satisfied with Roe vs. Wade being overturned. He would press on, and work to make abortions illegal wherever he could. So it is all about the Right to Choose. As I quoted in my previous Letter to the Editor, McCain says, “However, the reversal of Roe v. Wade represents only one step in the long path toward ending abortion.” and in an earlier statement McCain said, according to the Boston Globe of January 31, 2000, that he believed that if Roe vs. Wade were overruled, doctors would be prosecuted “but I would not prosecute a woman” who obtained an abortion. See here.
I find it amusing that Chiu turns facts on their head. “Democrats excel in the Politics of fear,” he claims. Mr. Chiu, really. It is not Democrats who invoke 9/11 over and over to instill fear. It is not Democrats who run Willie Horton ads. It is not Democrats who run Swift Boat lies.
As for Social Security, Bush has been pushing to end it and substitute private savings accounts and McCain has been a cheerleader. Democrats don’t scare anyone. Bush and McCain do with the policies they advocate.
Mr. Chiu says McCain has made many trips to Iraq and has had many briefings. That is what makes it so scary. When he confused Al QAEDA with Shiites on his last visit to Iraq, was it a senior moment as Fox News suggested, or was he showing that he can’t grasp the differences, or was he obfuscating to confuse the public, as Bush has done for so long. Can Mr. Chiu offer any other plausible explanation?
On the veterans bill Mr. Chiu claims that McCain wants to give veterans with more service more benefits. That is simply not true. McCain has not introduced any bill giving any veterans more benefits. This is what the Wall Street Journal of May 26 said; “Sen. John McCain used Memorial Day to defend his opposition to a Senate bill that vastly expands education benefits for veterans. The bill passed the Senate last week 75-22 over the objections of Sen. McCain, and President Bush, both of whom argued the benefits were too generous and likely to discourage reenlistment.”
Mr. Chiu charges me with claiming that McCain agrees with president Bush on every issue. That is again simply not true. I have said he agrees with Bush on most issues, and I gave his voting record. I even gave examples of where McCain disagrees with Bush. I mentioned North Korea, where McCain opposes Bush’s successful use of diplomacy, and I would be the first to admit that on the environment McCain positions are more environmentally friendly than Bush’s.
We are indeed fortunate to have a breath of fresh air in the candidacy of Barack Obama, who more than anyone arouses memories of John F Kennedy. Let us march with him into a world which breaks cleanly with the past, with wars of choice, obfuscation, attacks on our safety net, and deficits as far as the eye can see. Bill Clinton handed this country to Republicans with projected surpluses for years to come, and Republicans turned it into deficits of endless duration. Clinton ran on a platform, “It’s the economy stupid” and brought this country into some of the best eight years in a very long time. Well, can you believe it? “It’s the economy again stupid.” Republicans work their wrecking ball each and every time. Supply side economics indeed.
Before anything else, John McCain is a Republican and he is wed to their attachment to the rich. No, only to the very rich.
They can’t win on the issues and so they deceive and they fear monger.
Finally, I find it amusing how they always try to attach the label of elitist to Democrats. Let me see. McCain was born to a well to do family. He married an heiress and her father put him into politics.
Obama was raised by a struggling single mother and achieved the American dream through his own talents and struggles.
McCain graduated fifth from the bottom of his class but was advanced because of his pedigree.
Obama was chosen to be Editor in chief of the Harvard Law Review.
Which of them has more in common with most hard working and struggling Americans, and who comes from an elite background.
I also published that commnentary in my local newspaper, "The Suburbanite". This prompted a Mr Chiu to respond with a Letter to the Editor, which appeared in its June 13 edition. This in turn caused me to submit my further response, which will be printed in next Friday's edition of that paper. I think this exchange of letters highlight the issues as seen from both sides, and accordingly I want to post both letters. Below is Mr. Chiu letter.
To the Editor:
This letter is in response to Emil Scheller’s letter entitled "More about McCain".
He uses the standard Democrat fear-mongering tactic of claiming that a hypothetical reversal of Roe v. Wade would take away from a woman’s the right to choose to have an abortion. This debate about Roe is not specifically about abortion itself. It's about the separation of powers between legislative and judicial branches of government. A similar debate about judicial activism is now raging over gay marriage. In high school civics class, students are taught that legislatures make laws and judges interpret the laws.
Even if Roe were overturned, the very next day, the state legislatures, which have not officially legalized abortion in their states (since Roe made it unnecessary) would be pressured to do so and nearly all of them would. May I remind readers that, just to cite two examples, New York legalized abortion in 1970 and New Jersey legalized abortion in 1972. Roe, one way or the other, does therefore not affect New Jersey. But I guess the truth doesn't matter. Mr. Scheller and the Democratic Party will continue scaring people for votes. Because Democrats can't debate the issues, they have come to excel in the politics of fear, whether it's over judicial nominees, Social Security, or anything else.
Mr. Scheller even claims that Republican presidential candidate John McCain doesn't know the difference between Shiite and Sunni Muslims. This is an obvious lie. Mr. McCain has made many trips to Iraq. Rick Lynch and other generals gave him many briefings, specifically about how to keep various Iraqi factions from killing each other, whether it's Sunni vs. Shiite, Sunni moderates vs. Sunni al-Qaeda, or Shiite moderates against Shiite radicals.
Mr. Scheller even makes the specious claim that Mr. McCain is unfriendly to veterans. Fortunately, we have a free press in this country and know that Mr. McCain only opposed a bill that gave the same educational benefits regardless of whether a soldier had served two years, five years, or 10 years. What's wrong with giving more benefits to someone who served longer? Democrats are trying to give the impression that Mr. McCain wants zero benefits for veterans. Why do Democrats keep pushing this line even though we all know the truth?
Mr. Scheller even tries to make the argument that Mr. McCain agrees with every position of President George Bush, although it's not a given that Mr. Bush is always wrong. But Mr. Scheller and other Democrats cherry-pick what they want and ignore Mr. McCain's positions that are different from those of Bush and the Republican Party. For example, Mr. McCain opposes a constitutional amendment to ban gay marriage. Do Democrats ever mention that? No.
I have many objections to Mr. Scheller's letter but if I go on and on this letter will be even longer than Mr. Scheller's original letter. But one last thing: Mr. Scheller wants Democrats who supported Mrs. Clinton not to support Mr. Cain due to "disgruntlement." However, such Democrats who do vote for Mr. McCain will do so because, as Hillary Clinton pointed out, Barack Obama is not ready for the presidency. Mr. McCain is head and shoulders above Mr. Obama.
My response appears below.
To the Editor:
I am delighted that Mr. Chiu has decided to debate on your pages. Your readers will be well served by such a debate.
I love his way of debating. He uses all the standard Republican canards. Roe vs. Wade is not about abortion he says. It is about. “Legislators make laws and courts and judges interpret the law.” Of course we can all agree that "Legislators make laws and courts and judges interpret the law.” But what happens when the court strikes down laws passed by legislators. Aren’t they overruling the will of the elected representatives? Aren’t they activist? Well not if I agree with the decision Mr. Chui might say, “The court is interpreting the Constitution.” Well isn’t that what the court was doing in Roe vs. Wade. Well, Mr. Chiu might say there is nothing in the Constitution that specifically says that a women has a right to choose whether to carry a baby". But Mr. Chiu, there is nothing in the Constitution that specifically authorizes the Supreme Court to strike down any laws. There is nothing in the Constitution that specifically provides for the Federal Reserve, or the FDA. There is nothing in the Constitution that specifically says corporations shall have the same rights as real people. But the court interprets a document, which is short and vague, and we all, at different times, are upset by what they say it means.
So we need a better measure of what an activist judge is. How about one that looks at it from the standpoint of which judges vote to strike down laws passed by the people’s representatives, most often. The latest statistics I can find on this cover the period from 1994 to 2005, before Roberts and Alito joined the Court, but after all the other judges now there, had been appointed. At that time the “liberal judges” were the same as now. Souter, Stevens, Ginsburg, and Breyer, but the right wing judges were, Thomas, Scalia, Kennedy, Renquist, and O’Connor. Not quite as Right as the present court, but it will have to do. How did they stack up on overruling the will of elected representatives? Here are the figures:
Thomas 65.63 %
Kennedy 64.06 %
Scalia 56.25 %
Rehnquist 46.88 %
O’Connor 46.77 %
Souter 42.19 %
Stevens 39.34 %
Ginsburg 39.06 %
Breyer 28.13 %
Wow! The liberal judges go against the will of the elected representatives much less often than the Right wing ones. By the way Souter and Stevens were appointed by Republican Presidents, Stevens by Ford and Souter by G.H.W Bush.
The Court just handed down a decision that says the Constitution means what it says. Habeas Corpus – the right of people not to be incarcerated without being charged on the basis of evidence cannot be suspended, or in the language of that august document “The Privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it. (Section 9, Clause 2) I don’t believe we have been invaded, and I am not aware of any rebellion.” and Bush said he disagreed with it. But McCain, intemperate as usual, and anxious to outdo Bush said, “a decision which I think is one of the worst decisions in the history of this country." I would ask, worse than locking thousands of Americans in internment camps because they had Japanese ancestry? (Korematsu v. United States -- 1944) worse than forcing African Americans to sit at the back of the bus? (Plessy v. Ferguson -- 1896)...worse than slavery? (Dred Scott v. Sanford -- 1857).
But McCain make it clear on his website that he would not be satisfied with Roe vs. Wade being overturned. He would press on, and work to make abortions illegal wherever he could. So it is all about the Right to Choose. As I quoted in my previous Letter to the Editor, McCain says, “However, the reversal of Roe v. Wade represents only one step in the long path toward ending abortion.” and in an earlier statement McCain said, according to the Boston Globe of January 31, 2000, that he believed that if Roe vs. Wade were overruled, doctors would be prosecuted “but I would not prosecute a woman” who obtained an abortion. See here.
I find it amusing that Chiu turns facts on their head. “Democrats excel in the Politics of fear,” he claims. Mr. Chiu, really. It is not Democrats who invoke 9/11 over and over to instill fear. It is not Democrats who run Willie Horton ads. It is not Democrats who run Swift Boat lies.
As for Social Security, Bush has been pushing to end it and substitute private savings accounts and McCain has been a cheerleader. Democrats don’t scare anyone. Bush and McCain do with the policies they advocate.
Mr. Chiu says McCain has made many trips to Iraq and has had many briefings. That is what makes it so scary. When he confused Al QAEDA with Shiites on his last visit to Iraq, was it a senior moment as Fox News suggested, or was he showing that he can’t grasp the differences, or was he obfuscating to confuse the public, as Bush has done for so long. Can Mr. Chiu offer any other plausible explanation?
On the veterans bill Mr. Chiu claims that McCain wants to give veterans with more service more benefits. That is simply not true. McCain has not introduced any bill giving any veterans more benefits. This is what the Wall Street Journal of May 26 said; “Sen. John McCain used Memorial Day to defend his opposition to a Senate bill that vastly expands education benefits for veterans. The bill passed the Senate last week 75-22 over the objections of Sen. McCain, and President Bush, both of whom argued the benefits were too generous and likely to discourage reenlistment.”
Mr. Chiu charges me with claiming that McCain agrees with president Bush on every issue. That is again simply not true. I have said he agrees with Bush on most issues, and I gave his voting record. I even gave examples of where McCain disagrees with Bush. I mentioned North Korea, where McCain opposes Bush’s successful use of diplomacy, and I would be the first to admit that on the environment McCain positions are more environmentally friendly than Bush’s.
We are indeed fortunate to have a breath of fresh air in the candidacy of Barack Obama, who more than anyone arouses memories of John F Kennedy. Let us march with him into a world which breaks cleanly with the past, with wars of choice, obfuscation, attacks on our safety net, and deficits as far as the eye can see. Bill Clinton handed this country to Republicans with projected surpluses for years to come, and Republicans turned it into deficits of endless duration. Clinton ran on a platform, “It’s the economy stupid” and brought this country into some of the best eight years in a very long time. Well, can you believe it? “It’s the economy again stupid.” Republicans work their wrecking ball each and every time. Supply side economics indeed.
Before anything else, John McCain is a Republican and he is wed to their attachment to the rich. No, only to the very rich.
They can’t win on the issues and so they deceive and they fear monger.
Finally, I find it amusing how they always try to attach the label of elitist to Democrats. Let me see. McCain was born to a well to do family. He married an heiress and her father put him into politics.
Obama was raised by a struggling single mother and achieved the American dream through his own talents and struggles.
McCain graduated fifth from the bottom of his class but was advanced because of his pedigree.
Obama was chosen to be Editor in chief of the Harvard Law Review.
Which of them has more in common with most hard working and struggling Americans, and who comes from an elite background.
Sunday, June 08, 2008
The Price of Oil
I have decided to address this issue because so little is understood about this phenomenon.
Even before the present spike in the price I was receiving circular e-mails that apparently were getting wide circulation. One of these urged boycotting Venezuelan oil by not buying any oil at Citco gas stations. Another urged boycotting gas stations bearing the Exxon-Mobil banner as a way of forcing their gas prices down. Another propounded by John McCain and seconded by Hillary Clinton suggested a two month suspension for the summer of the federal excise tax on gasoline. Barack Obama opposed it. I am glad to say that neither McCain nor Clinton actually introduced legislation to that effect and no such legislation has been introduced.
Unfortunately, none of these proposals has any merit. They all show an incredible lack of understanding of how markets operate and what effect our actions have on markets.
Basically, prices are set by the law of supply and demand. This is true whether we are talking about prices on the stock market or of commodities. When there is more demand than supply of any given commodity the price of that commodity will rise until supply and demand come into balance. If there is more supply than demand the prices will fall until supply and demand come into balance.
The only way that prices can be effected artificially other than price controls, which creates other evils, is by changing one side or the other of the equation. Thus OPEC was formed to control the price of oil by controlling supply. During the Carter administration OPEC decided to drastically reduce supply causing long lines at gas pumps and driving the price of gasoline up drastically. This time, however, OPEC is pumping at, or very near to capacity, and so they, even if they wanted to, cannot increase supply. Some may say why would they want to? The answer is simple and is the reason why in the past OPEC has increased supply when prices have gone up. The more that the price of oils escalates the more alternate fuels become competitive and the more incentive there is for the world to take steps to find alternative energy and or find means for conservation. This is something that OPEC, all the oil producing states and the oil companies fear, for if and when that happens their days of wealth inflow drops and eventually stops.
At the moment the world has a capacity to produce eighty-five million barrels of oil a day. Demand is at eighty-seven million barrels. The price will keep rising until supply and demand are in balance.
Some believe that the US can solve this problem by accessing its own reserves, which have been off limit because of their environmental sensitivity. But this is totally false. If ANWR were opened to drilling it would increase the profits of the oil companies because they would have slightly more to sell, but it would not have a noticeable effect on oil supply. It is estimated that it would take ten years to bring this oil supply to fruition and then “it would result in additional oil production of a peak 780,000 barrels per day in 2027, according to the mean case developed by the Energy Information Administration in a revised assessment of ANWR potential. That would result in trimming $0.75 (in 2006 dollars) off the projected cost of a barrel of oil, according to the EIA”
Thus only a decrease in oil consumption will bring the price down. A reduction in the excise tax as advocated by McCain/Clinton would discourage the reduction in gas consumption thus keeping the market from coming into balance and cause the price of gas to increase by the amount of the tax. Thus the price of gas would remain the same, but instead of the money going into the Highway Trust Fund to keep our roads in repair, it would go into the pockets of the oil companies. Taxing the oil companies as Clinton advocates would keep them from profiting from the windfall, but would have no effect on the price of gasoline. Some benefits from the high prices have already occurred. “General Motors Shifts Focus to Small Cars in Sign of Sport Utility Demise” says the headline at page one of this last Wednesday’s Business section of the New York Times.
As it happens, as painful as the price of gas is to consumers and truckers the world over may be, it is the result of the failure to anticipate this crisis. Had taxes been raised, or had CAFE fuel standards been increased years ago, gas consumption would have gone down and the spike we now have might have been avoided, but even that is questionable because in a globalized market the price is set by world wide demand and unless the whole world demand goes down prices will go up.
It is interesting to note that T. Boone Pickens who made his fortune in Texas oil is now investing in Wind Turbines. Here is a quote from Market Watch,
“Billionaire T. Boone Pickens said Thursday he's placing an order to buy 667 wind turbines from General Electric as part of an estimated $2 billion in start-up costs for his four-phase Pampa Wind Project. Pickens' Mesa Power LLP will buy the GE turbines, which will be capable of generating 1,000 megawatts of electricity, enough for 300,000 average U.S. homes. When complete, the Pampa Wind Project will cover some 400,000 acres in the Texas Panhandle. 'You find an oilfield, it peaks and starts declining, and you've got to find another one to replace it," said Pickens, who once operated one of the largest independent oil and gas production companies. "It can drive you crazy. With wind, there's no decline curve."
Finally, some have suggested that the weak dollar is at least partly responsible for the high cost of gasoline. Again this is a misconception. Since the price of oil is denominated in Dollars it makes no difference how weak the dollar is for the price of oil in the US. If oil were denominated in Euros it would be a different story. As it is the weak dollar is making oil more expensive in non-dollar countries, but not for the US.
It is time to come to grips with reality!
Even before the present spike in the price I was receiving circular e-mails that apparently were getting wide circulation. One of these urged boycotting Venezuelan oil by not buying any oil at Citco gas stations. Another urged boycotting gas stations bearing the Exxon-Mobil banner as a way of forcing their gas prices down. Another propounded by John McCain and seconded by Hillary Clinton suggested a two month suspension for the summer of the federal excise tax on gasoline. Barack Obama opposed it. I am glad to say that neither McCain nor Clinton actually introduced legislation to that effect and no such legislation has been introduced.
Unfortunately, none of these proposals has any merit. They all show an incredible lack of understanding of how markets operate and what effect our actions have on markets.
Basically, prices are set by the law of supply and demand. This is true whether we are talking about prices on the stock market or of commodities. When there is more demand than supply of any given commodity the price of that commodity will rise until supply and demand come into balance. If there is more supply than demand the prices will fall until supply and demand come into balance.
The only way that prices can be effected artificially other than price controls, which creates other evils, is by changing one side or the other of the equation. Thus OPEC was formed to control the price of oil by controlling supply. During the Carter administration OPEC decided to drastically reduce supply causing long lines at gas pumps and driving the price of gasoline up drastically. This time, however, OPEC is pumping at, or very near to capacity, and so they, even if they wanted to, cannot increase supply. Some may say why would they want to? The answer is simple and is the reason why in the past OPEC has increased supply when prices have gone up. The more that the price of oils escalates the more alternate fuels become competitive and the more incentive there is for the world to take steps to find alternative energy and or find means for conservation. This is something that OPEC, all the oil producing states and the oil companies fear, for if and when that happens their days of wealth inflow drops and eventually stops.
At the moment the world has a capacity to produce eighty-five million barrels of oil a day. Demand is at eighty-seven million barrels. The price will keep rising until supply and demand are in balance.
Some believe that the US can solve this problem by accessing its own reserves, which have been off limit because of their environmental sensitivity. But this is totally false. If ANWR were opened to drilling it would increase the profits of the oil companies because they would have slightly more to sell, but it would not have a noticeable effect on oil supply. It is estimated that it would take ten years to bring this oil supply to fruition and then “it would result in additional oil production of a peak 780,000 barrels per day in 2027, according to the mean case developed by the Energy Information Administration in a revised assessment of ANWR potential. That would result in trimming $0.75 (in 2006 dollars) off the projected cost of a barrel of oil, according to the EIA”
Thus only a decrease in oil consumption will bring the price down. A reduction in the excise tax as advocated by McCain/Clinton would discourage the reduction in gas consumption thus keeping the market from coming into balance and cause the price of gas to increase by the amount of the tax. Thus the price of gas would remain the same, but instead of the money going into the Highway Trust Fund to keep our roads in repair, it would go into the pockets of the oil companies. Taxing the oil companies as Clinton advocates would keep them from profiting from the windfall, but would have no effect on the price of gasoline. Some benefits from the high prices have already occurred. “General Motors Shifts Focus to Small Cars in Sign of Sport Utility Demise” says the headline at page one of this last Wednesday’s Business section of the New York Times.
As it happens, as painful as the price of gas is to consumers and truckers the world over may be, it is the result of the failure to anticipate this crisis. Had taxes been raised, or had CAFE fuel standards been increased years ago, gas consumption would have gone down and the spike we now have might have been avoided, but even that is questionable because in a globalized market the price is set by world wide demand and unless the whole world demand goes down prices will go up.
It is interesting to note that T. Boone Pickens who made his fortune in Texas oil is now investing in Wind Turbines. Here is a quote from Market Watch,
“Billionaire T. Boone Pickens said Thursday he's placing an order to buy 667 wind turbines from General Electric as part of an estimated $2 billion in start-up costs for his four-phase Pampa Wind Project. Pickens' Mesa Power LLP will buy the GE turbines, which will be capable of generating 1,000 megawatts of electricity, enough for 300,000 average U.S. homes. When complete, the Pampa Wind Project will cover some 400,000 acres in the Texas Panhandle. 'You find an oilfield, it peaks and starts declining, and you've got to find another one to replace it," said Pickens, who once operated one of the largest independent oil and gas production companies. "It can drive you crazy. With wind, there's no decline curve."
Finally, some have suggested that the weak dollar is at least partly responsible for the high cost of gasoline. Again this is a misconception. Since the price of oil is denominated in Dollars it makes no difference how weak the dollar is for the price of oil in the US. If oil were denominated in Euros it would be a different story. As it is the weak dollar is making oil more expensive in non-dollar countries, but not for the US.
It is time to come to grips with reality!
Monday, June 02, 2008
More about McCain
With the election for President of the US heading into the General Election, an examination of Democratic charges that McCain is in effect running for a Bush third term is in order. To do this we need to find criteria for the judgment. The criteria I will use are McCain’s voting record and his stated position on the issues.
As to his voting record, the Congressional Quarterly, a non-partisan publication tracking developments in the Congress, reports that McCain voted with Bush 89% of the time in 2006, 95% of the time in 2007, and through May 15 of 2008 he voted for the President’s stated position 100% of the time.
Looking at his website we can find his stated position on a variety of issues, which in most cases are vague. On abortion and the Supreme Court he is crystal clear.
On a Woman’s right to choose the website states “John McCain believes Roe v. Wade is a flawed decision that must be overturned, and as president he will nominate judges who understand that courts should not be in the business of legislating from the bench.
“Constitutional balance would be restored by the reversal of Roe v. Wade, returning the abortion question to the individual states.”
But he does not stop there. He adds, “However, the reversal of Roe v. Wade represents only one step in the long path toward ending abortion.”
In other words, while he does not specifically say so, McCain favors criminalizing abortion.
This should be of particular concern to women who have been supporters of Hillary Clinton. If any of them are considering not voting, or as some may have threatened, to even vote for McCain, they should think long and hard, for McCain would take away from them the right to control their own bodies.
But it is not entirely fair to give the impression that McCain agrees with the President on all issues. On North Korea Bush followed a hard line for most of his Administration resulting in Korea building an increasing a number of atomic bombs. Recently, under prodding from Condoleezza Rice, Bush adopted a more flexible approach which resulted in Korea actually backing away from its insistence on continuing its nuclear bomb program, has begun dismantling its facilities, and turned over 18,000 documents on its reactor at Yongbyon. But McCain has denounced the Administration for abandoning its hard line approach.
In Iraq McCain echoes the Bush bluster about victory but shows little understanding of the dynamics of that conflict. He talks constantly about defeating El Qaeda in Iraq, ignoring the fact that they were a non-factor before the invasion, and appear be a non-factor now. He shows no understanding of the difference between Sunni and Shiite; see here, a misstatement that was dismissed by Fox’s Brit Hume as a senior moment. Here is what Hume had to say:
“I think it’s probably just a blip, but it was a bigger blip than he wanted or needed at the time. I think the overall impression of the trip was this is a man welcomed by, knowledgeable of and comfortable with foreign leaders across a big part of the globe. But the mistake, nonetheless, raises questions not about his knowledgeability —we all kinda believe he has that—the question, perhaps, about his age, which is an issue. You know, the feeling was not that he’s a dope, didn’t know his way around, that he might have had a senior moment there, and I think that’s unfortunate for him.”
I don’t agree with Hume. I don’t know who the “we” is in that “we all kind of believe that” but in a way it doesn’t matter. We cannot afford a President who either has senior moments or lacks knowledge and understanding of the nature of our enemies. McCain lacks the understanding that no matter how long we stay in Iraq, Iraq’s Shiites will always have a greater affinity for Iran than for the US.”
He fails to understand that the war in Iraq has put strains on our military that has brought it very close to the breaking point; that the policy that has required the men and women of our armed services to bear an unbearable burden, with ever longer tours of duty and ever greater numbers of deployments, can not be sustained. That in order to continue our deployment in Iraq we would have to reinstitute the draft, a step neither Bush nor McCain are willing to embrace because it would be politically unpopular.
He claims to be a friend to our veterans but he actively opposes the bill sponsored by Senator Webb, which would give our veterans the same educational benefits that was given to the veterans of World War II. See here.
At one time McCain occasionally broke with Republican orthodoxy. But now that he is running for President he caters increasingly to the Bush/Republican base.
Anyone who thinks they can allow this man to become President out of peeve or disgruntlement does not appreciate how much the decisions of the next four years will impact our lives and those of our children. McCain, as President, would be a disaster for the US and the whole world.
As to his voting record, the Congressional Quarterly, a non-partisan publication tracking developments in the Congress, reports that McCain voted with Bush 89% of the time in 2006, 95% of the time in 2007, and through May 15 of 2008 he voted for the President’s stated position 100% of the time.
Looking at his website we can find his stated position on a variety of issues, which in most cases are vague. On abortion and the Supreme Court he is crystal clear.
On a Woman’s right to choose the website states “John McCain believes Roe v. Wade is a flawed decision that must be overturned, and as president he will nominate judges who understand that courts should not be in the business of legislating from the bench.
“Constitutional balance would be restored by the reversal of Roe v. Wade, returning the abortion question to the individual states.”
But he does not stop there. He adds, “However, the reversal of Roe v. Wade represents only one step in the long path toward ending abortion.”
In other words, while he does not specifically say so, McCain favors criminalizing abortion.
This should be of particular concern to women who have been supporters of Hillary Clinton. If any of them are considering not voting, or as some may have threatened, to even vote for McCain, they should think long and hard, for McCain would take away from them the right to control their own bodies.
But it is not entirely fair to give the impression that McCain agrees with the President on all issues. On North Korea Bush followed a hard line for most of his Administration resulting in Korea building an increasing a number of atomic bombs. Recently, under prodding from Condoleezza Rice, Bush adopted a more flexible approach which resulted in Korea actually backing away from its insistence on continuing its nuclear bomb program, has begun dismantling its facilities, and turned over 18,000 documents on its reactor at Yongbyon. But McCain has denounced the Administration for abandoning its hard line approach.
In Iraq McCain echoes the Bush bluster about victory but shows little understanding of the dynamics of that conflict. He talks constantly about defeating El Qaeda in Iraq, ignoring the fact that they were a non-factor before the invasion, and appear be a non-factor now. He shows no understanding of the difference between Sunni and Shiite; see here, a misstatement that was dismissed by Fox’s Brit Hume as a senior moment. Here is what Hume had to say:
“I think it’s probably just a blip, but it was a bigger blip than he wanted or needed at the time. I think the overall impression of the trip was this is a man welcomed by, knowledgeable of and comfortable with foreign leaders across a big part of the globe. But the mistake, nonetheless, raises questions not about his knowledgeability —we all kinda believe he has that—the question, perhaps, about his age, which is an issue. You know, the feeling was not that he’s a dope, didn’t know his way around, that he might have had a senior moment there, and I think that’s unfortunate for him.”
I don’t agree with Hume. I don’t know who the “we” is in that “we all kind of believe that” but in a way it doesn’t matter. We cannot afford a President who either has senior moments or lacks knowledge and understanding of the nature of our enemies. McCain lacks the understanding that no matter how long we stay in Iraq, Iraq’s Shiites will always have a greater affinity for Iran than for the US.”
He fails to understand that the war in Iraq has put strains on our military that has brought it very close to the breaking point; that the policy that has required the men and women of our armed services to bear an unbearable burden, with ever longer tours of duty and ever greater numbers of deployments, can not be sustained. That in order to continue our deployment in Iraq we would have to reinstitute the draft, a step neither Bush nor McCain are willing to embrace because it would be politically unpopular.
He claims to be a friend to our veterans but he actively opposes the bill sponsored by Senator Webb, which would give our veterans the same educational benefits that was given to the veterans of World War II. See here.
At one time McCain occasionally broke with Republican orthodoxy. But now that he is running for President he caters increasingly to the Bush/Republican base.
Anyone who thinks they can allow this man to become President out of peeve or disgruntlement does not appreciate how much the decisions of the next four years will impact our lives and those of our children. McCain, as President, would be a disaster for the US and the whole world.
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