Wednesday, March 02, 2011

What Oil Shortage?

Here's the $60 million question: why are gas prices going up so high? On fears of an attack on oil supplies in the Middle East, and Libya? Repeat, on fears of an oil shortage?

Okay, but the head of the Organizaton of Petroleum Exporting Company, OPEC, said there is no justification for any spike in crude oil prices. UPI reports: "Officials from Saudia Arabia said last month that OPEC won't permit any shortages."

Here's another question: who benefits the most from the spike in gas prices? Which companies have consistently reaped gargantuan profits in the face of global economic misery, and who has allowed this practice of price gauging while flacidly trying to pass legislation that will be too little, and too late?

The answers are so obvious, it's almost a cliche except to those who are torn between filling their refrigerators, or their gas tanks. So far, Congress and the president have done nothing to stop this monstrous gluttony by the oil cartel. Flaccid proposed legislation to raise taxes marginally on oil companies is too little, too late.

So, here's a suggestion: let the federal government take over the big four oil companies just until Libya and the Middle East stabilize to prevent further escalation of gas prices which can only spell economic ruin.

When you hear some, like Federal Reserve Chairman Ben Bernanke, assert that the rise in gasoline, so far, does not pose a threat to any present, or future recovery, that is flat out untrue. As those of us who are barely scraping out a living know, when the price goes up at the pump, everything else goes up, too.

Mr. Bernanke is right about one thing, though. The rise in the cost of gas won't adversely affect the recovery, especially given that the "recovery" applies only to corporate America.

Oh, and to those who say this is socialism, was it socialism when the government took over the post office, and Amtrak? The president was right in taking over General Motors to prevent its inevitable collapse, and bankruptcy. He would likewise be right to take over Exxon-Mobil to prevent the kind of price gauging that will only lead to bankruptcy for working men and women in this country.

Since Mr. Obama has shown such bold leadership in his handling of the auto industry, now if the time for a temporary federal takeover of those oil companies whose obscene profits need to be redirected into consumers' pockets not only to tackle the federal budget deficit, but to ensure the longevity of social programs like Social Security, and Medicare.

It was under the George W. Bush administration that the delusion of insufficient oil supply first surfaced, and this delusion should be relegated to the archives of history. As we now know, Bush's "war on terror" was really a war on your pocketbook.

The only way to justify the rabid campaign of corporate fearmongering about instability in the region is to look at the banner profits in the last quarter of 2010 alone when Exxon-Mobil, according to the New York Times, the largest domestic oil company, posted a healthy 53% increase in profit.

Occidental Petroleum, the behemoth onshore crude producer, also saw its fourth quarter profit rise nearly 30%, and profits at Royal Dutch Shell are predicted to escalate so much, over the next decade, that several executives have already opted to convert their bonuses into company share.

How about the federal government acting as interim chief executive of Exxon-Mobil, Chevron, Shell, and any other oil company that grows fatter at consumer expense? After doing so, the administration can then officially raise their tax rate to 37%, and collect that 37% not merely on their profit, but on all their corporate income, as well as set in place price controls to prevent this kind of carpetbagging from happening in future.

Clearly, gross lack of federal oversight of the oil industry is working so well that in corporate boardrooms, and on Wall Street, that nobody wants to say a peep about it, but when the number of working Americans lined up at food banks grows to include folks in suits and ties, maybe somebody on K Street will open their mouth.

After all, since the president's strategy of government takeover has worked so well to grow the auto industry that is now having the best year they've had in many, then why not try it on the oil companies, and arrange for a temporary federal stewardship to prevent the further obscene escalation of prices we're now seeing at the pump.

Austerity; it's not just for working Americans, but oil companies, too.