Different Take on Gas Prices

High gasoline prices are causing lots of talk, political and otherwise. Today our local paper ran two Associated Press (AP) stories regarding the same. My point here is to raise some questions that don't seem to make it into the news stories much.

The AP stories focused on causes of high gasoline prices and made a distinct point in both stories, to say that politicians, Congress and the President can't do much about the price of gas. In fact the AP's position is that the ONLY things Congress or the President can do about gasoline prices is to reduce gasoline taxes or force more efficient cars into the new car showrooms, via higher miles per gallon (mpg) requirements.

One of the AP stories said that a 36 year study showed no correlation between increased US oil production and reduced gasoline prices. The point they were trying to make is that increasing oil production in the US would have no impact on gasoline prices. They further pointed out that there's more of a global consumption of oil products and therefore the US has a diluted impact on gasoline prices.

Okay, now you know the basis for my post. Time to call BS and talk about my point of view.

1. Why aren't we less dependent on foreign oil today than in the late 1970's? I'm 50 years old and I remember there were legitimate gasoline supply issues in the early to mid-1970's. Although the federal government imposed fuel economy standards that were meant to reduce fuel consumption and thus, our dependence on foreign oil, we remain at the mercy of other countries for a majority of our oil.

2. Why don't we have oil companies drilling for oil in more accessible places? For reasons (mostly tied to the environmental movement) United States oil exploration has been pushed to places that are very remote (e.g. the frozen tundra of Northern Alaska) and very dangerous (e.g. 5,000 feet below the surface of the Gulf of Mexico and more than 100 miles off the Florida coast).

3. Our cars are more fuel efficient (overall) and safer than ever before. Why hasn't the move to smaller, more efficient cars resulted in lower long-term gasoline prices? I know, global demand. But still, doesn't it seem that if we have adequate supply and more efficient vehicles, the prices should be more stable?

I am all for having our motor vehicles be as efficient as possible. However, we've seen our federal government throw hundreds of millions of dollars at "green energy" companies that then go belly-up. Chevrolet had to suspend manufacturing of the Volt, a hybrid vehicle that was flopping in sales because (in part) it could only travel 40 miles per electric charge and the federal government had to offer incentives just to get the price affordable.

Suspicious Study?

I find the 36-year study very interesting because the study would've started about the time the United States started to really ramp up the environmental protections against many development operations, including oil exploration. The federal government was increasing regulations during the same time the study was going on.

My Dream...Good Luck With That!

What I would love to see is the federal government easing many regulations and restrictions to encourage increased exploration, allowing that exploration to take place in less dangerous areas, but while keeping safety as the number one priority. I believe this can be done and I believe the oil companies are willing to do that. Most importantly, I believe this would have multiple benefits, the primary benefit being lower gasoline prices in the United States.

Would We Control Our Own Future?

Even if the world demand for oil remains high and results in countries outside the United States being able to put a higher price on their oil, at least we'd have some control over our own gasoline prices. It might even result in a lower oil price which impacts the production costs of many other products and services.

Government Forced Giveaways

This post is in reference to a recently debated/argued part of the "healthcare reform act," commonly called "Obamacare."

In the past few days there's been an uproar over a requirement in the act that forces employers to offer health insurance that will cover birth control pills (including the controversial "morning after" pill). The big argument recently has been that while churches were exempt from providing this, religious-based employers still had to provide it.

Today, the President announced that the religious-based employers wouldn't have to provide contraception drugs free of charge, but that the insurance companies would have to provide them instead.

People are so caught up in the religious aspect of this they miss the real issue which is; if the United States Government can tell an insurance company they must provide goods or services free to the recipient, they can do it in other areas as well. As silly as it may sound to some, what is to stop the Federal Government from telling a bicycle helmet manufacturer they must provide homeless people with a helmet free of charge? Wearing the helmet may lessen the possibility of serious injury (thus saving taxpayer dollars). Ergo, we are looking out for the safety of the homeless person and the possible high medical costs the taxpayers would bear.

Even if you buy the notion that the government is doing good, somebody WILL pay for the items being provided "free" to the recipient. Who will pay?

If you are okay with what the government is doing, how would you like it if someone came along and said you must start providing your services free? Let's say you're a nurse, or a school teacher or policeman. You've been trained, receive a paycheck and benefits for your services, but healthcare, education and public safety are basic human rights. Therefore, the government has decided that to help provide those services, you must work 8 hours per week for free in, say a home health service organization. Or if you're a teacher, you must provide 8 hours per week of free tutoring to at-risk kids, or if you're the police officer, you must do 8 hours of work in a troubled neighborhood. This is not voluntary. You must do this or be fined by the government. How would you like that?

Bottom line; the United States Constitution does not give the President, nor the Federal Government, the authority to force companies to give goods or services away. If we don't recognize this now, we willingly give over to the government the power to dictate anything and everything. It IS that important.

Ron Paul Comments Missed by Many?

During a South Carolina Presidential Primary debate this past week, Ron Paul made mention that trade with other countries was not hurting our economy and that we should not be worried about it. I believe his comments were so nonchalant that most people missed it, certainly the moderator did as there was no follow up.

To be sure, I am not a Ron Paul supporter (in fact I've never read his writings and I don't think I've ever visited his website). While I may agree with him on some issues, like many other political candidates, I disagree on some issues as well.

Congressman Paul was responding to comments made by opponents regarding overseas competition for jobs. Mr. Paul said we shouldn't be so worried about trade with countries like China because while we send dollars over there to buy their goods at cheap prices, the savings (due to low prices) stay here, in the pockets of the people buying the products.

The reason I think this is such an important point is that, as a nation, we largely ignore the elephant in the room on economics and jobs; which is that we all want to buy cheap products and services, but we think we deserve top pay for our own labor. Furthermore, we get outraged that companies take their manufacturing jobs (yes I said "their" not "our" jobs) to countries where the labor is cheap and regulations are more favorable to industry.

I believe we have raised our standards so high that it may take a full-blown crash of our economy in order to bring large numbers of manufacturing jobs back to America. Every economic money producer (e.g. housing, lending, technology creation) goes through booms and busts and labor will be no different.

We bought houses with no money down, maxed the loan payments out, maxed out the credit cards to furnish the homes, did the same with our cars, clothes, even education. Yep, with the help of society, willing lenders, educational institutions and a government willing to spend, spend, spend, we mortgaged our entire futures to the point that we require huge salaries to pay for the previous spending. Younger generations actually own very little because everything has been financed. By the time we pay our car off, we've got a new one with a new loan, the home mortgage is 30 years and we'll be retired before the mortgage is paid off, that is if we can actually someday retire.

We will need to get to the point where people are willing to work for a few bucks an hour and live at a much lower standard because the developing nations already do that and they are the ones getting the jobs. This will also require some relaxing of regulations by our government which also means people so entrenched in regulatory movements will have to forego their activism to get jobs back.

Ron Paul said in that same debate, we have a problem of morality. This got largely overlooked but the point is so true. We don't value hard work in America as much as we used to. We don't see being a hard worker as virtuous. Today, the hard worker is the sucker who just hasn't figured out how to make big money the easy way, without leaving the comfort of their recliner.

I now only wonder a)when the wage bubble will burst and b)whether there will be enough people with strong work ethic to put the nation back to work.