What's Behind the Price of Gas?/Photos of a Dead Terrorist

For most Americans, Friday brought some welcome news. This was one rememberable week. The murderer Osama bin Laden got what he deserved; hand delivered by the US Navy Seal’s Team Six (thank you gentlemen) from America. The economy showed some times of growing and adding some 244,000 new jobs. Lastly, the price of oil dropped to $97.00 a barrel; down from $113.00. This should translate to a drop of about 20 cents a gallon in the next few days (have you ever noticed how the price can go up a nickel or more during a single day but takes a week to drop?). It’s the price of oil that I’d like to talk about in this column.

Prior to this week, the big five oil companies—Exxon, BP, Shell, Chevron, and Conoco posted record profits…again. Americans are suffering at the pump with near five dollar a gallon prices (in some places like Hawaii, the price was already over $6.00 a gallon). How could this be? Well, the big five made $34 billion dollars in the first quarter of the 2011. Yes, you read that right. Exxon made the most with $11 billion dollars. Up 69% from the same time last year, which was a record at the time. To put it another way, that translates to roughly $82,175.00 per minute. Over the last 10 years, the oil companies have made 1 trillion dollars in profits. In just 2008 alone, they made $100 billion…in profit.

Queasy yet? If not, this should do the trick. As if this obscene profit and the price at the pumps aren’t enough, did you know that the American Taxpayer pays between $4 billion and $9 billion to these same oil companies in the form of federal tax subsidies? That’s about $36.5 billion over the past decade. Now, I don’t begrudge any business making a profit. However, I do have a problem with a $34 billion profit while I struggle with filling up my tank and at the same have to pay to support these same corporations. To me this is a classic example of not just corporate greed, but the corporate domination of the federal government, which, by the way, includes both political parties.

So, just out curiosity, I wondered how much it cost to produce one barrel of oil. Did you know that the cost to research, develop, drill, pay taxes and salaries equals $30.00 per barrel? Yelp, just $30.00. Everything else is profit. And did you know that the big five have stashed away $1 trillion in cash reserves? Apparently they are expecting a very rainy day. The money is allegedly being held for future research, investments, and offset any “down year”, which they haven’t had in about 10 years. Personally, I suspect it’s also being held to keep any “green” technology or alternative energy off the market.

In addition to profits, the oil execs are busy pumping up the prices of their own sources of revenue---stocks. Exxon has taken some of its profits and purchased $5.7 billion dollars of its own stock and anticipates buying another $5 billion dollars, while the “poor” cousin, Conoco, which earned a mere $3 billion during the first 3 months of year, bought back $1.6 billion of its stock. Why would they do that you wonder? Simple. It artificially drives of the price of the stock, which makes it stockholders even more money. These people stay up late at night thinking about these things!

So, the next time you pull in to “fill ‘er up”, just remember that your tax dollars are helping contribute to that queasiness you’re feeling. When election time rolls around wherever you live, be sure to “thank” your Congressperson or Senator at the polls.


Osama bin Laden’s Photos

As everyone on the planet now knows, Osama bin Laden is dead thanks to the brave men and women of the US Armed Forces, and especially to US Navy Seal Team Six---hooyah! There’s a lot of speculation as to whether or nor he was armed; intended to surrender or not and so forth.

First off. Who cares? Bin Laden was a cold blooded murderer who thought nothing of killing innocent men, women, and children. Human life meant nothing to him. America did not need to trauma and expense to bring his likes to trial. Can you imagine the cost of providing security? Where would he be held? Would this be an American trial? After all, he masterminded murder in several countries, and let’s not forget that some of these countries don’t have the death penalty so someone like Osama would sit in prison at taxpayer expense. Personally, I can’t see holding the likes of bin Laden one day at taxpayer expense. I can’t even see paying for the food, medical care, or anything else to keep him alive in prison.

Not only would this be a security nightmare, but he would become the focal point of terrorist groups around the world. Who knows how many hundreds or thousands of hostages would be taken (and murdered) to free him. How many buildings and other structures would be bombed while he was being held? Some of our European “allies” have shown time and again their willingness to deal with terrorists. I don’t think it would be a matter of which one would cave, but which one would cave first.

As for the alleged outrage of killing an “unarmed” man, are they serious? Men like bin Liden wouldn’t hesitate to kill. Remember, Bonnie and Clyde and John Dillinger were “unarmed” too. This was simply a matter of who shot first. Besides, what do you expect? Should our sailors have said “please”? Should they have waited until he pulled his gun or grenade? In a combat situation, you act first. Period. As for calls of “revenge”, let’s not forget that he started the fight. We ended it. What are we supposed to do? Let people like him keep on hitting us and do nothing out of concern about possible “revenge”? I don’t think any reasonable person would accept that kind of logic.

Should we have informed the Pakistani intelligence, the ISI, or the Pakistani government? In normal circumstances, I would say yes. However, we needed to act on very time sensitive information pertaining to a very elusive target which required absolute perfect timing. Second, Pakistan’s military has let Osama slip through their fingers at least twice before. Third, Osama was living a very comfortable life in a military town that’s home to Pakistan’s version of West Point. Abbottabad is full of military personnel, as well as retired generals, intelligence officers, police officers, and government officials. He was living in the largest house in the area (which was also heavily fortified). Wouldn’t you have thought someone would have checked this out? The Pakistani government and/or military may not have known he was there, but it is a damning critique of their abilities.

Finally, the death photos. Should they be released? Obama says no because he’s more worried about the sensibilities of the Moslem extremists who already hate us than the widows and children of 9/11 or the American People. The liberal media is characteristically defending his decision and, naturally, the American People are opposing it. Listen, we as a people need closure. We need that visual confirmation. It’s part of human nature. The Arab people have seen worse on their local news. Arab media didn’t hesitate to show the three burned and mutilated US solders hanging from a bridge during the invasion of Iraq. They think nothing of showing innocent men and women having their heads sawed off. The photos of Saddam Hussein’s two sons were published, and video of his hanging were shown.

Obama did release the pictures of the Osama’s dead son and some of the others killed on May 2nd. So, why not allow us the closure of seeing the corpse of the man who caused so much bloodshed and sorrow?

Corporate Welfare

I’m sure just about everyone has noticed that a bipartisan Congress gave some $4 billion dollars worth of subsides and tax credits to the oil companies, and yet oil company executives belly ache about how much money they’re not making. We notice their “plight” every time we buy gas, oil, or anything else made with petroleum (like plastic). We notice Exxon made $7 billion dollars in profit the first three months of this year, but that’s just a fraction of the story.

Last year, according to the Spark newsletter, Exxon made after-tax profits of $26 billion dollars, an increase of 52% over 2003. Chevron-Texaco made $13 billion, an 86% increase from the previous year. Shell Oil was up 48% over 2003, with $19 billion dollars in profits. Poor babies. I suppose the increase in pump prices is to compensate oil companies for hiring more accountants to count all the money they’re raking in.

Continuing increases in oil prices will in the long run severely damage the economy. People will stop spending as much in order to compensate for the increase in gas and oil prices. The decrease in purchases will lead to a decrease in sales, which in turn will lead to layoffs. Service businesses, ranging from anyone in the transportation industry down to the pizza delivery person, will see a decrease in business in direct relationship to the increase in costs of their services as a result of the cost of oil and gas. Manufactures of high end vehicles such as trucks and SUVs will see a decrease in purchases as customers move to more cost effective cars. Businesses which use petroleum based products, which includes everything made of plastics, will see the costs increase. While some of the increase can be offset internally, it will eventually be passed on to the consumer in the form of higher prices for such things as milk (plastic containers) and computers. For fun, take a minute and look around. Count the number of items made of plastic. That will give you an idea of where the increases will come from.

In short, consumers will have less disposable income, and will make adjustments to compensate for the increase. Manufactures will be forced to increase costs to adjust for the increase of supply costs on their end. With less money to go around, companies will be forced to reduce costs in the form of “sales” which may offer a short term boost in the economy, but will make the economy more instable, forcing marginal companies to either layoff or close. Housing and “big ticket” sales will suffer as folks have less money to spend, and are increasing worried about the economy, which feeds into an increasing unstable economy. The Fed may have to step in to reduce interest rates in order to artificially stimulate the economy. This may, again, have short term benefits, but doesn’t address the cause. The long term result could be a recession.

In 1976, during the “Oil Crisis”, then President Jimmy Carter promised Americans that the US Government would do whatever was necessary to harness alternative energy sources. Well folks, we’re more dependent on foreign oil than ever before, and geo-political nature of world is far more dangerous and volatile than ever. The hated “oil rich Sheiks” of the 1970s turned out to be the same US oil companies that boasted such impressive profits cited above. Oil companies stifled any real efforts to develop alternative energy while it was still in its infancy. President Bush recently remarked that he couldn’t understand the public’s concern over the increase in pump prices, and cited that the increases had “been gradually coming over time.” What he meant to say was that the oil company’s dominance over energy has been gradually coming over time. My solution would be simple. First, invest heavily in alternate fuel sources. Set “non-breakable” time tables, and require oil companies to contribute to its financing. After all, since they spent millions trying to stop it, seems only fair they should now have to fund it. Second, demand auto manufactures develop energy efficient cars and trucks (as an aside, the auto industry has been very successful in dodging this one. In fact, cars are less efficient now than just 10 years ago). Set specific “drop dead” dates with stiff financial penalties, and accept no more whiney ass excuses. Third, nationalize oil and gas companies, along with all other energy and water producing facilities. Industries that have such an effect on national security and the public’s well being should not be in the hands of folks motivated solely by profit. Fourth, and perhaps the most important, put the presidents, CEOs, and boards of directors on trial for war profiteering, for clearly that’s what it is.