A reader remarks…

     What about the argument that the oil companies are not drilling on leased areas as it is and the deregulation of futures speculation (Enron loophole) that has also contributed to driving up the price of oil? Why wont US oil companies get oil from South America or Canada? Why does most of the oil have to be bought from OPEC?
     Seems there's more to it than the offshore drilling solution… Not that I am against it, because I am for it. But that is only part of the solution on Middle East oil dependence.
     Actually, we need a mix of traditional and new energy sources (natural gas, solar, wind, geothermal, hydroelectric as well as coal and oil) to gain our independence from foreign oil. Germany is leading the way in this area, with legal mandates and tax incentives for the adoption of wind, hydroelectric, geothermal and solar heat. Google the city of Freiburg and you’ll find a town that makes so much of it’s own energy that it has a surplus the citizens sell at a profit to the national grid. They have homes that lose so little heat they can be warmed comfortably in the dead of winter using 30 lit candles and the trapped heat the occupants give off. So yes, there is more to the solution than drilling.
    But when President Bush lifted the executive ban on offshore drilling yesterday the price of oil futures dropped by $9 a barrel, finally stabilizing at a net reduction of $7.33 by the end of trading. Supply and Demand. What do you think would happen to the price of oil if Congress followed suit?
    Right now there are oil fields off California that, if opened back up for drilling, would produce oil in one year. Other areas will take much longer to develop, but we are looking at the possibility of almost immediate relief.
    If there is oil to be had on the leased land I think the oil companies would be drilling for it right now, given the price per barrel. I suspect most of that leased land is not as promising to yield oil as the outer continental shelf, our western oil shale and the ANWR deposits.
    I’ve heard that speculation adds from 40 to 80 cents a gallon to the price of gasoline. This may well be. On the other hand –and hear me out on this— the speculators, oil futures buyers, provide a valuable service. There is competition among nations to buy oil. India wants it and so does China. The futures buyers secure a reliable supply for U.S. end users. In other words, they make sure that when we turn the car on, there’s gas in the tank. The $4.50 a gallon is the price of buying the gas in a competitive world market. Once again, supply and demand.
    If you look into whom the futures buyers are, you won’t find a crew of buccaneers like Enron. You will find pension funds and public employee unions.
     We do, in fact get oil from Canada, which has the biggest deposit of tar sand in the world. The oil is processed out of that material, which is mined. Our South American supplier is Venezuela, which is run by our adversary Hugo Chavez, who is every bit as obnoxious as any Arab oil sheik ever thought of being.
    So I’m with you. Let’s drill and let’s diversify our energy portfolio. That is a solution that is truly pragmatic and truly progressive.

Burning food in a hungry world…

     Count me out when it comes to ethanol, however. In a world where starving children bloat up and are too week to brush the flies off their own faces, it is a grotesquely selfish and ultimately obscene act to take edible corn and turn it into fuel for SUVs. By 2015 as much as half of the U.S. corn crop could be going into ethanol production. What will this do to the price of animal feed? Meat and milk prices are already rising, what about the thousand-and-one other food products made directly or indirectly from corn?
     We Americans can afford a bigger food bill. What about the less fortunate peoples of the world? What are they to do when food is either too expensive or unavailable at any price? It is something to think about as we crank up the air conditioning in our SUVs this summer.    

Mr. Obama goes to Washington…by way of Baghdad

     Barack Obama is going to Iraq. The only question is …why? The answer is far from obvious because Obama went to some pains yesterday to say that the war in Iraq was a strategic mistake and it’s the war in Afghanistan that we absolutely, positively must win.
    There was no hint that Obama planned to modify or refine his position on the war for any reason. That’s because his net roots are being especially vigilant in examining anything he says about the conflict for signs of a shift to the center.
     This puts Obama –ahem!— between Iraq and a hard place because while the Democratic primary candidates bickered earlier this year about who would get us out of Iraq the fastest, the Surge worked and we more or less won the war. The terrorists have not been completely eliminated, but they hold no cities, Al Qaida in Iraq has been reduced by about 90 percent and the Iraq army is taking on more and more responsibility in the conflict.
    This calls for at least for a more nuanced approach to withdrawal by the Democratic standard-bearer. But with a civil war brewing on his own website over his shifts to the center on faith-based programs, gun rights and immunity for the telecoms who helped the government wiretap terrorists, Obama cannot move to the center on the war. He cannot cross the Netroots on the signature issue of the campaign.
    So if going to Iraq is not going to change his mind on policy, what’s the point? Frequent flyer miles? Or the excellent roast lamb they serve in Baghdad?

When those of us who consider ourselves conservative were winning, I didn’t feel the urge to blog. I was perfectly happy writing my magazine pieces on World War II and writing the occasional book.
     Now we conservatives are losing, thanks to a well-meaning but inept administration. Now that we are the underdogs I think it could be fun to look at the world and especially our country while the other side is busy ruining it.
    The main difference between those of us who call ourselves “conservatives” and self-proclaimed “progressives” (the preferred term to replace “liberal”) is that we conservatives tend to be more pragmatic than the left. Idea that work appeal to us, while progressive prefer ideas that make them feel good, whether or not they work. We look for results while they strive for fairness.
    There are other differences. For example, if you spend any time reading a major market newspapers, you will find that the progressives consider themselves to be much more intelligent than conservatives.  Favoring unlimited abortion rights, rejecting religion, and solving problems by expanding government makes you smart, apparently. If they are right then I shall wear my stupidity as a badge of honor.
    Our current energy crisis reveals yet another major difference between our two sides. The progressives feel the cure for $4.75 gasoline is to tax the oil companies, to forbid drilling for domestic oil in the icy, featureless wilderness of ANWR, to get people who have never conserved fuel in their lives to start conserving and to punish the people who buy and sell oil futures. Supply and demand? Please don’t try to confuse them with economic doubletalk. It’s about fairness and someone –not the progressive—taking the blame.
     Of course our side wants to assign blame too, but first we want to start drilling for domestic oil. Since that would mean a future expansion of supply, it will lower demand --which means oil futures and fuel prices will drop. That takes us to about page 11 of your Economics 101 textbook...

 Charles Schumer, the Democratic senator from New York, is one of the classic publicity hounds of the United States Congress. I first noticed him years ago when he was a congressman, throwing a picturesque tantrum over gun control legislation that was blocked by the Republicans.
    After that I seemed to see him every time I turned on the television or opened a newspaper. They say in Washington that you take your life in your hands if you stand between Chuck Schumer and a live microphone. But this week I discovered that the pen –or more accurately, the word processor—is mightier than the microphone.
    Sen. Schumer sent a letter on June 26 to the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) in which he doubted the liquidity of the IndyMac Bank. It was a valid observation about a bank in some difficulty…But…Schumer being Schumer, he also released the letter to the press --scaring IndyMac's depositors witless. That caused a good old-fashioned, 1930’s style run on the bank, which lost $1.3 billion in deposits in the following eleven days. The Feds had to take over the bank on Friday, setting the seal on the second largest bank failure in U.S. history.
    Called on his behavior, Schumer said it is like being blamed for calling 911 to report a fire. The Wall Street Journal said Schumer’s action was more like pouring gasoline on a fire.
    Why did Schumer do it?  Why did he publicize that letter, causing a run on the bank? In some quarters it is noted that the progressives have accused IndyMac in the recent past of unfair lending practices (Center for Responsible Lending, June 20) Six days later, Schumer broadcasts his letter to the world. Coincidence?
   Probably not. I am not sensing conspiracy so much as I am sensing classic Schumer Showboating. The man loves a headline and I think he simply wanted to grab a little ink.
   And so, people with uninsured assets in IndyMac (the FDIC only insures up to $100,000 in deposits) are ruined. But Schumer got his ink --red ink because the American taxpayer will have to come up with $4 to $8 billion to cover IndyMac’s losses. I hope Schumer thinks it was worth it.

     President Bush has lifted the ban on drilling for oil on the outer continental shelf. It’s a largely symbolic gesture because the Congress also has to give its permission –and there is no sign that the Democratic majority will allow the drilling.  Harry Reid, the Senate majority leader, said the people want a more “meaningful” solution to the problem of fuel prices. There’s that progressive yearning again for a feel-good solution.
    I hope that Reid and the Democrats stick to their guns. After all, about 60 percent of the public now supports drilling. The longer the Democrats stick to their increasingly unpopular principles, the better it will be for our side when the November elections take place.
   OR, we could put our country first and hope that the Democrats wake up to their error and authorize the deep ocean drilling.

    Whenever someone suggests drilling in America for energy independence you hear the argument, “But it will take seven years (or ten years) for the oil to actually get to market! And the new oil will only replace depleted supplies…”
    Gee. Hadn’t we better hurry up then? Sounds like we’re going to really need that oil by 2018.
The “It’s going to take seven years” argument may not hold water (or oil) by the way. Some oil experts say that it might only be two or three years before the oil gets to market. Whenever it does, it will be just as much in demand then as it is now.  So let’s get drilling!