American Citizens News Network

July 14, 2008

The Facts

In a highly unusual move the Federal Reserve invited camera’s into their meeting today while they approved some new rules for mortgage lenders. Supposedly the new rules will prevent the kind of predatory lending that has taken place over the past several years which resulted in the financial meltdown we are currently in. However, the new rules do not take affect until October 2009, over a year from now.

My View

Dozens of things ran through my mind when I learned of this, and none of them are good. The first thing I asked was why must we wait over a year before the new rules are implemented? There is but one answer; “grab & run”. Every sensible person in the country knows those rules could be implemented immediately if the Federal Reserve wanted to. But politics and the old “buddy system” must take first priority. According to the report, the Feds had to “make some concessions to industry executives”, because they, the executives, “fear” too much oversight. Now does that surprise anyone? The reason we are in this mess now is because they didn’t have enough oversight as it was. And, of course, to put some icing on the cake, the Feds left some very nice loopholes in the new rules for future abuse. How many more hundreds of billions of dollars will be stolen from the American taxpayer over the next year and through the loopholes? Another thing the Feds bowed down to was removing a proposal that would have prevented banks from paying brokers for “steering homeowners into higher priced loans”. Now your broker will make more money if he can cheat you, the buyer, out of more money. Finally, the Mortgage Bankers Association got the Feds to be “open” to more possible changes before the rules go into affect. Aaaaahhhhhh! Now we know why it’s going to be 15 months before the rules are changed. I suspect that by the time the new rules take affect, they will look nothing like they are now. Isn’t it great to have friends in high places!?

One other thing that came into my mind was the dozens of news organizations, and their “unbiased” guest, who were defending the lenders when the news first broke earlier this year. All you could hear out of these people was how it wasn’t the lenders fault; it was “those greedy, worthless borrowers who knew they couldn’t afford the loan”. Well, there’s a certain amount of truth in that, but as mortgage companies confidential emails, memo’s, and ex-employees come out and exposed the lenders conscious intent to make those bad loans, you don’t hear so much defending going on. But that doesn’t matter now; those trickle down economic advocates obtained their objective, which was to deflect the real cause of the disaster and garner up support from those who think they, the advocates, are gods. It’s the old adage of “if I can deflect the attention away from me, I’m free to continue my misdeeds”.

July 10, 2008

The Facts

That’s right; it’s TRILLION, with a capital “T”. If you have watched any news at all for the past three or four days you will know that Fannie Mae and Freddie Mac, two government sponsored mortgage lenders, are in very serious financial trouble. It’s been quietly building for quite some time now with just an occasional mention by the media. Bloomberg published this article on the impending disaster today, July 10, 2008. Their woes are a direct result of the mortgage melt down that claimed Bear Stearns, and what will probably be many more before it is finished. The biggest problem with Fannie Mae and Freddie Mac is that they have about $12 trillion in outstanding home loans (debt), and they are responsible for about half of that, or $6 trillion.

My View

First, let’s point out that the current total US debt is well above $9 trillion. Even the best estimates is that it will take us about 75 years to pay that off, and that’s only if we start balancing our federal budget by 2010 (we all know that won’t happen) and raise our tax burden by a substantial margin; otherwise it’s anybody’s guess how long it will take. Now; if we have to add another $6 trillion to that to cover Fannie Mae and Freddie Mac, our government will have little choice but to declare bankruptcy. In fact, there are many experts in the field that say we are already bankrupt, we just won’t admit it. If not bankruptcy, we will have to find some sucker country to loan us the money, in which case will eventually cost us as much as $20 trillion with interest, etc.

Second, let me debunk all those out there that are going to say the federal government and us taxpayers will not be held responsible for Fannie Mae and Freddie Mac. Even Wikipedia implies the government is not responsible.  That’s a bunch of crock. Yes, I am aware that in 1968 they were converted into a private corporation with share holders. But the two are still government sponsored companies, which means the federal government basically stands behind them. And don’t think for one moment that the corporate management and share holders don’t know that. Otherwise, why would they ever fund $12 trillion of debt? No fat chance. You can find plenty of supporting documentation on line to confirm that we taxpayers will foot the bill, and “What Do Fannie Mae and Freddie Mac Do” is one of them. Under “Do I have anything at stake in this issue”, you will find the following paragraph; “As a taxpayer, on the other hand, you have a cause for concern. The low borrowing costs of the GSEs is based on implicit Government backing for their $3+ trillion of debt and guarantees. If the GSEs ever have a financial disaster, the Government will have to bail them out and you and I will be on the hook for the cost”. GSE stands for “Government Sponsored Enterprises”. And I should point out that in 2003 (when this article was published) the two mortgage companies were only $3 trillion in debt. What private company would ever allow even that much debt to accumulate if they knew the government was not going to bail them out?

One thing we can all bet on; a lot of people have become extremely wealthy with the raping and pillaging of these two companies. And you can also bet they will not pay their fair share of the tax dollars that will be used to bail out the two companies. That’s the way the “supply-sider” politicians have set it up. And we, the real taxpayers of this country, have greatly aided them by saying “I don’t care, they are my political party and anything they do is OK with me!” Congratulations supply-sider supporters; you have helped put the last nail in our coffin.

UPDATE: I had prepared this post for earlier publication, but updated it this morning, July 11, 2008. This brief report, and others, are saying The New York Times is reporting that the government is considering “taking over” Fannie Mae and Freddie Mac. A senior Bush administration official has said Bush is considering a plan for the takeover. Anyone care to “debunk” me now that we middle class and lower class taxpayers will not be saddled with the bill created by the supply-siders?

July 2, 2008

The Facts

Wilbur Ross, Jr., Chairman & CEO of WL Ross & Company, told CNBC today that there was no shortage of oil or a supply problem. He also said the fair value of oil is $100 per barrel, but oil was trading as if Israel had already invaded Iran. Ross went on to say that the growth in oil demand was only 2%, which contradicts what many others are saying. (See one article on how Ross makes his money.)

On a different segment of CNBC, John Hofmeister, recently retired President & CEO of Shell’s US Operations, said there was plenty of crude oil for the next 30 years. In that particular segment of the show, he said that the oil industry had hurt itself by being “too Republican”. In another segment, Hofmeister said there was lots of oil offshore in Alaska that is not restricted, but it would be a little expensive to produce due to the environment and sea life, and that an infrastructure would have to be built to move the oil. What he didn’t say was an infrastructure would also be needed if drilling was allowed in Anwar (ANWR). Finally, in another segment, Jeff Kruper, the Department of Energy acting deputy secretary, kept saying that opening up restricted areas was the only answer to lower prices. He works for George Bush.

My View

The real problem in getting to the truth of the matter is that crude oil has become politicized, and since politics has become nothing more than the dissemination of disinformation and outright lies, who can believe them. Maxine Waters, Democratic Congresswoman from California, has threatened to nationalize all the oil refineries so Congress can regulate the price of oil and gasoline. She has support in that from Democratic Representative Maurice Hinchey from New York. Now that’s just what we need; our “efficient & effective” government regulating our oil and gas supply. But this just goes to show you how politicized this has become, with nearly all Republicans doing everything they can to support whatever the oil companies want.

The oil companies and their political supporters seem to be speaking with forked tongue. They keep telling us the reason for high prices is a crude oil shortage. But at the same time they are complaining about being blocked in building refineries to refine all that oil they are producing, yet existing refineries are not operating at full capacity, mostly by choice. Can they have it both ways? It’s kind of like our tax system; if you make it confusing enough that the average person can’t understand it, it then becomes easier to fool the public. And those who believe prices will come back down if more drilling is allowed are complete fools. That is never going to happen simply because more drilling is allowed, although I am a mild supporter of opening up many of the restricted areas just so we can began to become independent on foreign oil.

As John Hofmeister said, by becoming too Republican, the oil companies have not helped the problem. But that’s because the oil companies & other big businesses have convinced the Republican Party that the only way to govern the country is through big business. Naturally, the Democratic Party is going to fight that with every tool they have at their disposal, which, in the end, is no better than letting big business govern the country. We, the people, do have alternatives to both parties’ ideas, but we don’t have time to do anything about it, what with us being too busy supporting our favored party and arguing with each other.

With his retirement, John Hofmeister has started “Citizens for Affordable Energy”. Hofmeister is the Founder & CEO. He talks about it in his “Parting Shots” on the show today. Hofmeister says it is pro-consumer and will be a bipartisan, non-profitable organization that will be exploring alternative and affordable energy, with short, medium, and long term goals. He goes on to say that the citizens will be part of this, because they don’t have a voice now. The citizens, he says, put politicians in office to work for them, but Congress is working for themselves. He calls it “partisan paralysis”. Hofmeister acknowledges there are existing organizations who claim to be doing the same thing, but their membership does not include the average person. He says CAE will not be that way. We’ll see.

July 2, 2008

The Facts

Martin Sullivan, ex-CEO of American International Group (AIG), will be blessed with $47 million from AIG, although he was ousted from the company for poor performance. AIG lost 46 percent of it market value during Sullivan’s three-year rein. He is just one of dozens of CEO’s who have been forced out of their respective companies because of lack of leadership, yet were rewarded handsomely for their failures. Sullivan will also be given an office and an assistant until the end of this year.

My View

How many times have I said there is no “reward & punishment system” for those at the top of the ladder; only a reward & reward system for these “upstanding leaders” of our country’s companies. Although their contracts call for a higher reward if the company’s value improves under their leadership, there really is no incentive for them to even bother with the kinds of rewards they are going to get for failure.

Another thing I have said in the past is these “3-5 year CEO’s” know they are not going to be around to face the consequences of their decisions, because it generally takes many more years than that for the results of those decisions to be measured. Gone are the days when a CEO is in place for 10-20 years and he conducts the company’s business as such because he knows he will be around to be held accountable. Today’s CEO is a “slash, grab, & run” CEO (Yuppie generation).

In case you think that Martin Sullivan’s unjustified rewards do not affect you, you should remember two things. First is that our business-controlled government is more than happy to hand out your tax dollars to save a company that is going bankrupt because of people like Sullivan (ex., Bear Stearns); money that will never be paid back. Second, AIG is an insurance company, therefore any kind of insurance you may have (life, home, auto, etc.) just may be owned or underwritten by AIG. And guess what is going to happen to your premiums when the Sullivan’s of the world drag the company down, and then walk away with millions of dollars of the company’s money. Naturally, when you see those premium increases, poor CEO performance with unjustified rewards will not be mentioned as part of the “justification” for those increases. You can bet on that.

July 1, 2008

The Facts

Crude oil prices have more than doubled in the past 15 months. As consumers, we are given any number of reasons for this, depending on who we are listening to. The most quoted reason is supply & demand. However, many of us can not accept that “supply” can decrease so rapidly relative to “demand”, or “demand” can increase so rapidly relative to “supply”, during a one-year period of time that it justifies a 100 plus percent increase in price. Ironically, most who say oil prices are justified or unjustified seem to be divided along political party lines. Those who say price increases are justified seem to be of the Republican persuasion while those who say they are unjustified seem to be of the Democratic persuasion, with very rare exceptions on both sides.

My View

In 1870 John D. Rockefeller started Standard Oil Company of Ohio with three other partners, but later bought them out. Then he became a monopoly through shear ruthlessness. By 1890 his monopoly could fix its own prices and terms of business because it had no competitors (quoted). By 1896 Rockefeller was worth $200 million ($5 billion indexed to 2007). But being a country of laws, one which forbids monopolies, the Supreme Court broke up Standard Oil in 1911. But that didn’t stop Rockerfellow and future business men in our country from aggressively pursuing ways to monopolize their product. About the only thing the action against Rockefeller did was tell these thieves they needed to find “legal” means of monopolizing, and if there were no legal means, bribe the countries lawmakers to pass laws that would circumvent the monopoly laws. And that has been done very successfully.

Not one single person today could make a viable argument that oil companies are competitive. There just simply isn’t any competition between them other than negotiating for sites where they want to drill for oil. Even at the retail market of gasoline, there is no real competition. And where there is no competition, prices are controlled; hence, a monopoly. (Occasionally, the retail owner will vary the price of gasoline a penny or two out of his own profits as a competitive edge, but the price to the retailer is set daily to include all of them.)

Take a look at all the places in the US where oil is produced; Alaska, Gulf of Mexico, the mountain ranges, west coast, etc.; even from abroad. Once the oil comes out of the ground and volumes recorded, it all goes into the same “barrel”. (“Barrel” is described as pipeline, tanker trucks, tanker ships, storage tanks, etc.) One market pays the same for all crude oil produced (by grade), no matter where it comes from. It doesn’t matter what oil company you are talking about, they all get the same price for their oil at any given time. Hence, a monopoly. No incentive to produce oil more economically for the purposes of competition. Now compare that to, say, the auto makers. For every compact car that rolls off any assembly line let’s charge the same sale price; for every full size car that rolls off any assembly line lets charge the same sale price; etc. etc. etc. You get the point. The results? No competition; charge any price you want or what the market will pay. How about appliance manufactures? Refrigerators, for example. All 19 foot refrigerators, same price; all 21 foot refrigerators, same price. How about all 4 ounce chocolate candy bars; lets charge the same price regardless of the manufacturer. (There’s a name for this kind of market, but we Americans don’t use it because it doesn’t coincide with a Democracy or a Republic.)

We must remember one thing; when our constitution and laws were set up, there were a lot of arguments about who should run (control) the country. Was it to be made up from all the citizens, or only the wealthy (people of “means”). Remember, our forefathers had just fought a war to free themselves of an “upper class” tyrannical government. So the majority of our forefathers won out; the country was to be ruled by citizens from all walks of life, not just by the wealthy. However, we have now, over time, silently elected a government that has successfully changed that. The wealthy and businesses control our government, albeit a government “elected” by the rank & file citizens. I demean the word “elected”, because the wealthy & big businesses have been very successful in convincing the rank & file citizens to vote the way they want them to vote through massive disinformation programs, propaganda, and just plain outright lies designed to tell people what they want to believe based on disinformation and propaganda.

Today you hear a lot about letting companies operate in a “free market”, especially in reference to oil companies. Confined to the basic definition of that two-word phrase, I completely support that theory. However, we have migrated to a point where the marketers want selected enforcement of that phrase.

Ever wonder why “a girl’s best friend”, the diamond, is so expensive. Not because of supply & demand based on how many diamonds mother earth produces. It’s because DeBeers controls over 90% of the worlds diamonds, and they put very strict limits on how many diamonds are released to the market over a given period of time. I’m not saying that there is a limitless supply of oil like there are diamonds, but when there is control without competition, you can charge any price you want.

The end results is that if we want to get back to paying a fair market price for crude oil and the products derived from crude oil, we must force the oil producers to move back into a competitive market. Without competition, oil companies are nothing more than a DeBeers, charging any price they want regardless of supply & demand or cost of production. However, we can’t depend on the Supreme Court to do that for us this time, as they are owned by the same people who own our elected officials.

Rockefeller, you won.

June 23, 2008

The Facts

Oil prices are now a huge part of every daily news show and many discussion segments. It seems that anyone who is given the opportunity to be on television is offering their reason(s) as to why oil has doubled within the past year. Those reasons range from a basic supply & demand issue to a conspiracy issue. There is any number of explanations, with many variations, depending upon who you are listening to.

My View

On CNBC’s Power Lunch today there was a segment entitled Saudi Arabia Oil Summit. Kyle Cooper with IAF Advisors and Arthur Gelber of Gelber & Associates were the guest. CNBC’s Melissa Francis, who has just returned from the summit, participated in the discussion. Nothing unusual about this segment by today’s standards except for one thing Arthur Gelber said. While addressing what part speculators had played in the current price of oil, Gelber said (in reference to speculators) “a different word should be used”. My mind immediate turned to how the term “trickle down economics” has been changed not once but twice over the past decade or so. This latter term was changed because Wall Street & politicians realized the average American worker had become too savvy to what it meant, which was putting more of our tax dollars in the pockets of large businesses without any real return. So I wondered if there was an attempt to apply this same strategy to speculators. I didn’t have to wait long to realize my suspicion was right. In the very next segment, CNBC host were picking up on this. One even said maybe someone could come forward with a new word and definition. So here we go. If you are familiar with any of my stuff, you will already know my point of view on this; “if the definition of a word or phrase is uncomfortable to you, just change the definition or apply a different word”. One last thought on Gelber’s comment. On Gelber & Associates web site under “About Us & Our Work”, you will find the following; “Gelber & Associates is a nationally recognized energy consulting and advisory firm specializing in energy trading practices (bold added) and protocols”. So why do you suppose Gelber would like to use a different word for “speculator” in reference to what part speculators are playing in the price of oil. This bears repeating for this case: “If you are uncomfortable with the definition of a word, just change the word”.

 One other thing was discussed several times on CNBC today, and that was how production volumes would, or could, affect oil prices. Now we all know that under a true “supply & demand” scenario, as production increases to offset shortages, prices go lower. We have certainly been bombarded with that “fact” by the many politicians and oil industry leaders who are telling us that if oil companies are allowed to drill in restricted areas, oil prices will come down. Although I am in favor of opening up certain restricted areas, it’s very hard to believe them. All we have to do is look back over the past twelve months. Oil prices have doubled during that time. Are we to believe that the demand for oil has increased to such a level in just twelve months it justifies doubling the price? We have also been told by these same people that the price of oil will come down just on the news that we are going to open up these restricted areas. I have to certainly question that. With the news today that the Saudis has agreed to increase production by another 200,000 barrels a day, that brings the total production increase by the Saudis to 700,000 barrels over the past three months. And during that time oil has gone up about $30 per barrel. Added to that, gasoline usage has dropped by nearly 2% during that time in this country alone. Oh, sure, there could be all kinds of “reasons” argued for that. But there is only one real reason; the producers now know that, overall, most of their customers are willing to pay the current prices for gas. So it is no longer a supply & demand issue; it is an issue of “what people will pay”.

June 11, 2008

The Facts

CNN’s Ali Velshi was giving another report this morning on oil, just as all news outlets are doing now on a daily basis’s. Ali was dressed in a black three-piece suit today and had been wearing a sheriff’s “badge”, but taken it off for this report. He was giving his usual justifications for the current price of crude oil, but the major point in this particular piece was the bill that was put down in the Senate yesterday. That bill, among other things, would have place a windfall profit tax on several oil companies. In his support of the bill being defeated, Velshi said, among other things, that if we put this tax on the profits, oil companies would “just take their business elsewhere”.

My View

Before you start screaming at me, I am not in favor of a windfall profit tax. It’s not that I don’t think the oil companies (and others) need to be yanked out of the world of greed & corruption and back into the world of morality; it’s that I know this won’t work. The very least that would happen is that we’d all be paying higher prices for gasoline and all other consumer products. For that reason alone, it’s a stupid idea. It’s just another way for the idiot Democrats to get more tax money to spend foolishly. But there were some other things in that bill that I am in favor of and those should go forward, but that’s another story.

Ali Velshi’s comment that the oil companies would “just take their business elsewhere” was a huge mistake on his part if he’s going to insist he’s not just another big business spokesperson. Take their business elsewhere? Yea, right! That’s just what they’d do! Abandon the only real market in the entire world that gives them the kind of profits they are enjoying? Abandon the daily 5 million plus barrels of oil production in the US? Abandon the protection that the United States offers them? For crying out loud; how idiotic can you get; or better yet, just how idiotic does he think we the public are. Ali Velshi just needs to put a name tag on his suit that says “Oil Company Public Relations”.

In that same segment, Velshi and his co-defendants were making fun of the “conspiracy theorist” who were saying the oil companies and others were propagating this current oil crisis just to scare the public into opening up drilling in protected areas. I can assure you I am no conspiracy theorist, but you can bet that those in favor of opening those areas are going to take advantage of this, even if there some small chance that it’s not part of the reason for this “crisis”.

June 11, 2008

The Facts

CNN American Morning aired a report today on the plight of the small, independent American dairy farmer. The farmer they interviewed in Maryland says that his cost had gone up over $9 thousand just in the first quarter of this year. But he can not recoup that added cost by increasing his sell price due to a law that was passed several years ago in an attempt to keep the price of milk down for the consumer. However, wholesalers and retailers (and maybe others) are not bound by that law. As their cost goes up, they can increase their prices to compensate.

My View

I really don’t know which political party came up with this “selective free market” law, but just by spending a life time of seeing, & admitting to, both the good and bad in the two major political parties, it’s not hard for me to guess which one did this. But I could be wrong. Still, I’d just love to hear the propagandist explanation today of the idiot(s) that put this one together and getting it passed through Congress. But you can bet that today’s net result of this law wasn’t passed in one bill. On that point, I would guess that the initial bill did not limit the law to any specific group that handles the milk on its way to the consumer. I suspect that, in time, after this law was passed, powerful lobbyist for the wholesalers, retailers (and maybe others) did what they do best, and that was to pay off certain Congressional members to get amendments to the law to exempt them. However, the small dairy farmer doesn’t have that kind of money or power, so he’s stuck.

One of my many quotes is “be careful of the law (or rule) you make; you may wind up having to live by that law”. So here’s my law on this; if we are going to prevent the small dairy farmer, who is a producer, from increasing his price on his products as his cost go up, let’s prevent the oil companies (and others), who are producers, from increasing the price on their product as their cost go up in order to keep the cost down to the consumer. How about that; think that’s fair? Of course you would if you are on one side of the political party line, and, of course you wouldn’t if you are on the other side of the political party line. So let me guess; you will decide if you think it’s fair or not just as soon as you learn whether it was your political party that did this, or that “other” political party, right? Isn’t “Free Market” great?

June 10, 2008

The Facts

Keith Hennessey, Assistant to the U.S. President for Economic Policy and Director of the U.S. National Economic Council, was the morning guest on CNBC’s Squawk Box today. He was pumping up George Bush’s accomplishments relative to the economy, and the latter’s desire to make the tax cuts permanent. But each time he did so, he was very quick to say that it would take 6-9 months before we will see the results. And he was just as quick to say that raising taxes on businesses would not fix our economics problem.

My View

First off, you’ve got to admire Hennessey for leaving the door open for his buddy Bush; “6-9 months before we see the results” of making the tax cuts permanent. That’ll give the old sheriff time to get out of town before everyone knows its all bunk. That little trick has been working for those 3-5 year CEO’s of large companies for 20 plus years now, so why not our President.

Now on to what matters. Let’s understand the difference of “raising taxes on businesses” versus “discontinuing tax breaks”. THERE IS A DIFFERENCE! The first is asking businesses to pay more than their fair share of taxes, which they clearly are not doing when you throw in all those tax loop holes they have. The second is telling businesses that they are no longer going to be on an entitlement program.

I hear so much about how we have to do something about entitlements we are handing out to undeserving people, and no one would agree with that more than I. However, the main difference with me and so many others out there is that I also do not think businesses should be getting entitlements, no matter what kind of “justification” one wants to put on it. Get this through your thick skull; trickle down economics DOES NOT WORK! How many more times have we got to prove that? That’s been tried by every Republican administration since the 1950’s, and some before, and the only thing it accomplishes is making the rich companies richer with near to nothing filtering back into the work place.

That doesn’t make you happy? Ok, let’s do this. Let’s take away all my tax loop holes (which I can’t take advantage of because my income doesn’t qualify me for those) and take away the tax loop holes for big businesses (and the wealthy). Let’s take away all these big business tax cuts that seem to be so important to so many and have one tax law for every individual and every company. Then at the end of every year let’s pass out the same tax forms to everyone, individuals and companies. Now, let’s all do our taxes, but; let’s add an extra box just above the bottom line for big business; and that box will say “deduct 5%”. Now they will be paying 5% less taxes than me. Guess what? I’ll be happy with that. But guess what else? Before the ink is dry on the tax forms, big businesses will be screaming, “no, no, no; let’s go back to the old way and I’ll gladly give up those all-so-important tax breaks”.

Here’s the bottom line; big businesses, Bush, and all those others will not be satisfied until only individuals earning less than $125 thousand a year and small businesses with less than 25 employees are paying taxes in this country. But really, they won’t be satisfied then; after that, they will not want to pay any state taxes, city taxes, property taxes, sales taxes, cost for any environmental damages they cause, etc., etc., etc. I said this many, many years ago; business will not be happy until 100% of gross revenues are coming into the board rooms and 0% is going out. And I have no doubt that, even then, they would be looking for some way to improve on that. But, hey! Don’t misunderstand me here; if you think I am saying that the Democrats are better, you are as wrong as you can be. The only difference between the two is that the Republicans want me to support the wealthy and big businesses and the Democrats want me to support all the worthless people, lazy people, & illegal immigrants in this country, and whole host of other unworthy causes. All I want is a job and for all of us to be treated equally. And trickle down economics, supply side economics, or pro-economy economics, what every phrase you chose to use, has not given anyone below the executive level a job yet.

June 8, 2008

The Facts

On February 7, 2008 a dust explosion in a sugar refinery in Georgia killed 13 people. Since then 52 more dust explosions have occurred here in the United States. There were 281 of these explosions between 1980 and 2005 that killed 119 people and injured 718 more. Democrats introduced “The Worker Protection Against Combustible Dust Explosion and Fire Act - H.R. 5522” that would require OSHA to enforce existing laws, which they clearly are not, and add laws that would accelerate compliance. However, OSHA has advised President Bush to veto the bill when it comes across his desk, and it appears that Bush will do just that.

My View

Two questions; why does OSHA not police these sites and enforce the existing laws, and why would Bush want to veto the new bill? I’m sure a lot of people would have many different answers to the first question, but it’s no secret why Bush will veto the new bill. Anything that’s going to cost big businesses money Bush is going to stop it if he can, no matter what the cost is to the general public, the workers, and the taxpayers. He has demonstrated that policy for seven years now. But I’m sure he will have his propaganda and disinformation experts come up with plenty of “justification” for his actions. And guess what; he will win and the stupid Democrats will back off. They are just as bought off as the Republicans, and all the Democrats are doing is posturing for position for the next election. Wonderful political world we live in, isn’t it?

June 6, 2008

The Facts

During the two day period of June 3rd and June 4th, crude oil prices dropped more than $6. Then over the last two days prices jumped about $16, to more than $138 per barrel. Every news source in the country is talking about this today. On top of all this, the jobs report for last week came out this morning with 49,000 jobs lost last week. That contributed mightily to the Dow dropping nearly 400 points today.

My View

So much for the “supply & demand” excuses for rising oil prices. But that hasn’t stopped the propaganda experts; they know there are still millions out here that are still their puppets and gladly mimic the notion that supply & demand is driving the prices up. Then there’s the scare tactics. It seems that the Deputy Prime Minister of Israel made some off-handed comment today that “bombing Iran’s nuclear sites was unavoidable” and the disinformation experts grabbed onto that as an excuse of rising oil prices. Next I expect to hear the night cleaning lady in the UN building being quoted on the shortage of petroleum related cleaning products as the reason for a huge price increase.

There are a few in the media that is starting to question these excuses. However, some are being careful. One female reporter on CNBC today had a slip of the tongue when she used the word “accelerated” in reference to the price increases, but very quickly corrected herself and substituted the word “upsurge”. Not a whole lot of difference in the definitions of the words, but “accelerated” has more of a sinister sound. And she made it even more suspicious by being so quick to change the words (sure, then there’s the teleprompter). But other reporters such as Mark Haines of CNBC’s “Squawk on the Street” is becoming even more skeptical. He doesn’t seem to buy all this “justification” crap. He’s always been one to raise an eyebrow at many of the questionable reports, and he seems to be the only one on that network that isn’t a big business puppet. He often questions some of the things businesses are reporting, and challenges many of the other CNBC reporters.

One CNBC guest this morning, Thomas Higgins of Payden & Rygel, said that for the first time in several years the demand for oil imports have fallen. That doesn’t support the supply & demand theory. He also said that he certainly believes we are in a recession, which doesn’t set too well with the current administration. (Of course, if the Democrats win the White House in November, I fully expect to see the Republican machine come out within the first month or so of 2009 and declare that we are in a recession.)

Another report today put the capacity of oil refineries at only 87%. That can be viewed two ways; either there is not enough oil to refine or there is not a big enough demand for gasoline. I’m sure those who support the supply & demand theory will use the first, and those who say that supply & demand is not the problem will use the latter. But with the nearly 5% drop in the demand for gasoline in the past two to three months, it is easier to believe the latter.

Right along with the increase in the price of oil today, and as mentioned earlier, the Dow dropped nearly 400 points. There were lots of folks willing to offer there opinion today on why that happened. The most popular opinion was the jobs lost report that came out this morning. With the 49,000 jobs lost last week, that brought the total job looses for 2008 to 325,000. With this latest report, this means we have lost jobs every single month for the past two years. And when you take into account that just about all the jobs experts tell us that we need an increase of 100,000 jobs each month just to break even, some might say we have “lost” over 800,000 jobs this year. This brought the unemployment up to 5.5%, which is the highest since 1987. Let’s see now, who had been in the White House for several years in 1987?

I think it’s time to change the “official” definition of recession (and maybe even depression) if we are going to continue to rely on the current definition to determine if we are in a recession or not. Of course, even if that did happen, I wouldn’t expect the Bush White House to acknowledge it. No President, Republican or Democrat, likes to admit to a recession during their watch. But it seems this current Republican President and his diehard supporters are worse than any before.

May 22, 2008

The Facts

Crude oil hit $135 per barrel overnight and that’s the major topic on most news outlets this morning. Oil prices have now doubled over the past year. A gallon of regular gasoline is expected to hit $5 within the next 2-3 weeks, and diesel fuel will reach $6 a gallon before then.

My View

P.T. Barnum of the Ringling Brothers and Barnum & Bailey Circus is credited by many for the following famous quote; “there’s a sucker born every minute”. I have come to realize that that quote has never been more accurate than it is today. Not only is there a sucker born every minute, but those who were born without that disease most definitely have it now, and it is incurable. Although not fatal, it’s been successful in turning us all into complete idiots.

Without exception, when the experts are pressed, they acknowledge that the price for a barrel of oil should be between $55 and $70 based on today’s supply and demand. This is not some big, earth-shattering, revelation. They have been telling us this fact since oil reached $100. Even Shell Oil’s president of US operations made a direct reference to that on a CNBC program. But we don’t listen. Why? Because we’ve been brainwashed. And why are we letting ourselves be brainwashed? Because we are too busy arguing over whose political party is evil and whose party is our savior.

When the price of oil is discussed by those who support the current prices, they always point to our need to become independent on foreign oil. That’s always followed up by a declaration that we must drill for more oil in our own country and build more refineries. Then that is immediately followed up by pointing out that it’s the “tree huggers” who are preventing us from drilling and building. That results in the general public quoting those “experts”. Objection accomplished; BRAINWASHED!

So if it’s not supply & demand that’s causing the high price of oil, why should we believe that once drilling limits are lifted the price of oil will come into line? Because we are brainwashed. When all areas are opened up for drilling and the price of oil is still rising, or at best, not coming back in line with supply & demand, more excuses will be made and the brainwashed public will once again blindly accept the “justification” for high prices.

This supply and demand disinformation is being splattered all over the news this morning. And not one single news outlet is challenging these “non-tree huggers” when they point to supply & demand as the cause of high oil prices. Yet these same news people have the supply and demand experts on their programs telling them it’s not supply & demand. There was a time when the news media could be relied on to keep these disinformation machines in check. However, the news media has been assimilated and is now part of that machine.

Not long after the 1972 oil embargo, Playboy magazine published an article which addressed the sudden increase of crude oil prices. In that article Playboy said that beginning in 1918 the oil industry had, on four occasions, manipulated the oil market in order to increase the price of oil. While finding that hard to believe back then, it is very believable today.

Let’s face the facts; the oil companies want no limits placed on where they drill for oil and they are going to get their wish, regardless of the cost to the public or the economy. In the meantime, they are enjoying huge increased profits from this fleecing. Unlike earlier years, the oil industry and their “bought & paid-off” lackeys are not even trying to seriously defend themselves because they know there is nothing that can be done about it. So why bother. I liken it to a bank robber; if you know there is nothing anyone can do about it, rob a bank everyday.

May 16, 2008

The Facts

In February of this year Turkish troops stormed across the Iraqi border for a three-day battle with guerrilla forces. The price of crude oil rose over $2 from that skirmish. Three weeks ago on April 25th a cargo ship working for the United States fired warning shots at approaching Iranian boats in the Gulf. This resulted in a $3 increase in the price of crude oil. Earlier this week a devastating earthquake hit China. Oil has now increased about $5 because of that tragedy. The official explanation for this latest price increase is that there will be a big increase in demand for oil because of the earthquake.

My View

What’s my point? Simple; no excuse is so trivial that it can not be used to raise the price of oil. So don’t be surprised to hear of a huge oil price increase on news that President Bush got laryngitis (or something) and can no longer “negotiate” with OPEC to bring the price down. What this all amounts to is the price of oil is not where the oil companies and the traders want it to be, so they will resort to more of these trivial and insulting excuses. But they don’t have to worry about explaining it to the American public and those who are being destroyed by these prices; The news media is more than happy to justify it for them. Ali Velshi & others of CNN, CNBC, and Fox News is all they need to “explain” things.

In case you didn’t hear about it, the school that was destroyed in the earthquake in China was a very new building. Already the Chinese government is saying that the builders used sub-standard building materials and the builders may be executed. That is exactly why corporations and business have to be regulated. Without being regulated with force, there is no limit on how low businesses will stoop for money. And don’t think for one second that just because we are “Americans” our business leaders wouldn’t do the same thing as those Chinese school builders did just for a bigger profit.

April 27, 2008

The Facts

Federal prosecutors are investigating Wachovia Corporation for possible involvement in laundering drug money for Mexico and Columbia. Wachovia is refusing to make any comment.

My View

Over the past few months Wachovia has made the news for scamming the elderly, for which they paid a fine of $144 million. There have been dozens of blogs talking about how bad Wachovia is. There have been many questions over the past two years about the way they treat their customers on credit cards and many other things. I even wrote about a personal experience I had with them that said Wachovia wants to charge $1.20 just to put a phone caller on hold until someone was available to take the call. And there have been many more reports on how Wachovia conducts their business.

Folks, here’s the bottom line; as long as our elected government officials from both political parties and our government agencies are being “financed” by big business, this sort of thing is going to continue. Those involved in these illegal and unethical actions know they will not have to pay any consequences when exposed. They know that eventually some news organization will expose them, but in the meantime they will make millions of dollars knowing they will not be held accountable.

Every week there are reports about this sort of thing. Therefore, it can not be defended by saying this is not the norm and we can not blame all financial institutes for the crimes of a few. It has become the norm. The abnormal is the few who do abide by the laws, both legal and ethical. I just hope that our country can be saved before history includes America as another powerful nation that failed because of greed and corruption by our leaders.

April 22, 2008

The Facts

The price of a barrel of oil is now increasing an average of $1 per day. Oil prices are up 23% this year, 16% in just the first three weeks of April. A gallon of gasoline is going up an average of 12 cents per week. Later reports say gasoline is averaging an increase of 5 cents or more per day. A Lou Dobbs report quotes Public Citizen as saying that the current price of gasoline is 20% higher due to speculation by hedge fund managers, which is helping make these managers rich beyond imagination. The same Lou Dobbs report says these high prices helped earn annual paychecks of $2 billion for some hedge fund managers.

My View

The above 20% quote by Lou Dobbs means that gasoline is over 70 cents per gallon higher because of these hedge fund managers. Even without that 20%, gasoline and oil prices are way out of line. The average cost of producing a barrel of oil off shore in the US averages less than $30 per barrel. I know some reports show that as being much higher, but having a lot of experience in the oil industry, I can tell you that those reports are inflated.

I have written several posts on the subject of oil, including one report on these hedge fund speculators. In the latter, I said that the entire world economy and millions of people’s lives are being destroyed in order for a few speculators to get much richer than they already are. I suppose a $1 billion annual income is just not enough for some hedge fund managers. They want to double-down on a sure thing; for certain a sure thing if you are in complete control of the bet. Even pro-oil man Ali Velshi of CNN says that most experts are reporting that oil should be between $60 and $80 per barrel based on supply & demand. Those figures agree with John Hofmeister, president of Shell Oil’s US operations, who said on March 20 of this year that triple digit oil was way out of place. This being the case, a gallon of gasoline should be around $1 less than it is today. So even though the Hedge Fund Association is denying responsibility for the inflated oil prices, they are lying; which makes them this month’s poster child of my personal slogan – Truth is Truth, Lies are Lies.