July 18, 2008

The Facts

The citizens of San Francisco, California will be voting on whether or not to rename their water pollution control plant the George W. Bush Sewage Plant. Supposedly this action is a way to publically voice their disgust with the presidency of George Bush.

My View

If you are familiar with ancient history, you may already know there were several occasions where a new ruler and his subjects would destroy all monuments, writings, and/or symbols of a past ruler. Ancient Egypt is probably best known for this, although there are records of other civilizations doing the same thing. The declared purpose of this by modern man is the new ruler was trying to destroy any evidence that the past ruler even exist. This may very well be the case, but in light of our own political leaders over the past few decades, I wonder if there may have been a different reason. Just like our illustrious CEO’s who are well rewarded financially for poor performance & complete failure, we Americans insist that monuments be built to our political leaders whether they were good leaders or not. All this makes me wonder if ancient leaders had another purpose in mind when they had all those monuments destroyed. Could they have possibly been thinking “I may not be able to rewrite history and make the person not exist, but I’m certainly not going to allow monuments to exist giving praise to a tyrant, a failure, and a destroyer”.

Only a small percentage of Americans think much of George W. Bush. He has been such a terrible president that his own political party, including the presumptive Republican Presidential nominee, are trying to distance them selves from him during the Presidential campaign. Of course, once the election is over, all that will change, but they know Bush is a terrible liability now. As for me, I really thought Bush would be a very good president, so I voted for him the first time. But I darn sure didn’t the second time, and the only reason he won his second term is because of the lies and attacks on John Kerry in 2004. That being said, I don’t know if I would go so far as to name a sewage plant after Bush, but he certainly doesn’t deserve any monuments of praise. But you can bet millions, if not hundreds of millions (possibility even billions), of taxpayer dollars will be spent building those Bush monuments once he’s out of office. And we can’t depend on the Democrats to prevent that from happening; they want to do the same thing for their failed leaders also.

July 17, 2008

The Facts

CNBC is our recognized business channel. Although I am not an investor anymore, I like to watch CNBC off and on during the day in order to stay abreast of what’s going on in the business world. In this effort, I’ve noticed a trend on CNBC that is troubling; many of their anchors and reporters are openly disclosing their personal biases, and have started “arguing” with those who disagree with them.

My View

When I first started hearing and seeing what at the time were just little innuendoes of these biases on CNBC, I dismissed it. However, over the past year or so it seems they have become more blatant, so I asked a couple of friends who also watch CNBC what they thought. I was a little surprised with what they said, especially since they both lean toward supply-side politics, but that was the very reason I asked them rather than some other friends. My surprise was that they agreed with me.

Not all the CNBC anchors and reporters fit into the category of “open biases”. Mark Hanes, Joe Kernen, Steve Liesman, Sue Herera, and a couple of others don’t let their biases come out, and they occasionally take issue with those who do. David Faber, Suze Orman, and Bob Pisani occasionally show theirs, but not often. But Erin Burnett, Michelle Caruso-Cabrera, Jim Cramer, Melissa Francis, Larry Kudlow (although you expect that from his own show), Becky Quick, Trish Regan, Rick Santelli, and a few others leave no doubt who they support. Melissa Lee and Jane Wells occasionally do also.

I don’t know; maybe I have a different idea of what anchors and reporters are suppose to do. When I was a young man, reporters reported just the news and the facts, and often challenged interviewees when it was obvious they weren’t being totally honest or moral. But it seems in today’s news world it’s a competition of who can better sale their personal beliefs and convictions. You expect these biased views from politicians and people who have something to loose or gain by pushing a certain agenda, but that is not what I expect from news reporters. I do expect them to report opposing views when applicable, but I don’t expect them to attempt to impose their personal biases. We all know there’s enough of that in the news media already. That is the unpublished “mission statement” of some news organizations, and I accept that although I don’t approve of it. But when you watch those news outlets, that’s what you’re watching them for.

It’s not just that there are those on CNBC who show their biases; they aggressively argue with another anchor, reporter, or guests who have differing views and opinions. They try to intimidate or force them to change their minds. Take this week for example. During the second day of the Bernanke Q & A in front of the House Financial Services Committee, in an attempt to quite a couple of those biased anchors and reporters, Mark Hanes said “ the Federal Reserve and others is for a free market—————until they aren’t”. He was obviously referring to the Feds bailing out failing big private businesses with taxpayer money, but think individuals and small businesses that made bad financial decisions should be “allowed to fail or succeed”. But it was obvious the others weren’t overjoyed with Hanes comment. Relative to this recession we’re in, many of the anchors and reporters are now mimicking their favorite “experts” who are saying the only problem with our economy is a “lack of confidence”. Even during the House Financial Services Committee hearing with Bernanke, one member even referred to that phrase as a bunch of bunk, and an excuse to avoid the real problem. (He, the committee member, and others refer to the term as “Voodoo Economics”) A day or two ago, there was a bit of positive news in the stock market, something that hasn’t exist for a while. Erin Burnett seemed to be a bit upset that a big deal wasn’t being made over this. Her comment was “Nobody seems to care about good news; what’s going on with that?” I guess she forgot about the recession (almost depression), the failing financial industry, the millions of lost jobs, the soaring price of oil and gasoline, the deteriorating dollar, our skyrocketing debt, etc., etc., etc. Then today Michelle Caruso-Cabrera even tried to “justify” tax evaders who were hiding their money overseas when she and Sue Herera were interviewing Republican Senator Norm Coleman. Coleman is the Chairman of the Senate’s Permanent Subcommittee on Investigations. Caruso-Cabrera interrupted Coleman by trying to compare the US to other overseas countries who are tax havens. She seemed to be insisting that if we were going to stop Americans who were evading taxes, we should also be stopping foreigners who invest in the US and don’t pay taxes. In other words, at least in my view, in part she was trying to defend US tax evaders by saying they should be left alone if we aren’t going to go after those foreigners who were doing the same thing. And she insisted on arguing the point, but Coleman stood his ground with her.

The most popular tactic these anchors use to win over their argument and/or make their point is to rudely “step on” the guest. By this, I mean as soon as they realize the opponent is disagreeing with them or saying what they don’t want to hear, they very quickly interrupt them. Then, if they are not completely successful with that tactic, time for the segment seems to “suddenly expire”. Maybe it’s just my imagination, but time seems to expire for the segment more often with opponents than with allies. As a reporter, you expect them to interrupt if the guest is avoiding the question; however, just because they are disagreeable is no cause for interruption.

“Privatized profits and socialized looses”, something I wrote about a few months ago, is a phrase that is starting to be used a lot in the face of our government bailing out big private business such as Bear Stearns and others, and now, possibly, Fannie Mae and Freddie Mac. You should be watching CNBC when that phrase is used by a co-worker or a guest. You can see the disdain in the faces of those I speak of. It’s as though they don’t care anymore that you know of their biases. The bottom line for me here is that if these “reporters” want to enter an arena of voicing their personal biases, they should find another venue, such as a commentator or an “opinion” forum. There is no place for that in reporting the business news of the day. Then again, maybe CNBC is just afraid of Rupert Murdoch, and is promoting this kind of “reporting”. You may remember Murdoch claimed the reason he was starting his business channel was because CNBC is too “business unfriendly”.

July 16, 2008

The Facts

Since the price of oil has increased so dramatically over the past several months, there’s been a lot of lobbying to open up restricted areas for drilling and oil production. President Bush has not failed to mention this each and every time he gets in front of a microphone. Many Democrats are against this, as are most of the environmentalists. Without fail, those who are in favor of opening up the restricted areas justify the need by proclaiming we, America, must become independent of foreign oil, and bring down the price.

My View

Earlier this month I wrote a post entitled “Why Oil Prices Are What They Are” where I addressed the absence of competition in the oil industry. One of the reasons for this absence is that all the crude oil produced in the world goes into a single “bucket”, where the price is set to all countries and customers, regardless of who produced it. With that fact in mind, just exactly why are we suppose to believe America will become independent of foreign oil if we start producing more oil here in America? And just exactly how will this bring down the price of crude oil here in America if foreign countries like China and others continue to increase their consumption?

I worked in the oil and gas industry for many, many years, and just about all of that time was spent offshore in the Gulf of Mexico. And there is one thing I can personally attest to; safety and environmental records have improved so much since the early-to-late 1980’s that it’s almost a non-issue, and will continue that way if current regulations continue to be imposed on the oil companies, including the smaller oil producers. By comparison, onshore plants, refineries, and facilities can only dream of being as good. Therefore, I can not oppose to opening up restricted areas if those same laws are applied AND enforced. But Bush, Chaney, nor any other advocate can convince me we will become independent of foreign oil or the price will come down just by opening up these areas. That argument is nothing but a smoke screen to give the oil companies access to more product so they can grow bigger and wealthier. This fact is more evidence this administration and their supporters are working only for the oil companies and other big business, and have absolutely no concern for the middle and lower class. It’s also evidence they have absolutely no problem lying to the public in order to achieve their goals. Remember their resistance when Congress pushed to curtail adding crude oil to our reserves while the prices were so high? Remember how they said our reserves would dwindle and we couldn’t afford that? Well, the price of crude oil dropped $6 per barrel today when the new numbers came out. Crude oil stocks rose by 3 million barrels; gasoline was up 2.4 million barrels; and distillate rose by 3.2 million barrels. And that’s with refineries operating at just over 87%. Just more evidence of the lying. But why should the lying surprise us; this administration has demonstrated on many occasions they have no problem lying about anything to achieve their objectives. And to think we (including me) called Bill Clinton the biggest liar of them all. Thank God Bush didn’t have sex in the oval office, or we’d really be upset with him.

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 12, 2008

The Facts

If you are prone to watch commercials you have certainly see the AT&T laptop connect card commercial that is staged on a set designed to look like an island in the Pacific. The commercial designers give you the idea it’s in the Pacific by putting Amelia Earhart’s lost airplane in the background. The actor in the commercial says something like “we have come to this island to find something; and we found the internet”. Then he goes on to tell us all about how great the AT&T laptop connect card is. Obviously, this commercial is insinuating there is no place we can go and not be able to connect to the internet if we buy their laptop card and subscribe to their service.

My View

If you have been enticed to look into the AT&T laptop card, whether due to this commercial or otherwise, have you pulled up their coverage map? I did; and guess what? Clearly one-third, possible close to one-half, of the United States is shaded as “No Service”. Now I find that a little unusual. Normally with commercials, you can always expect some, shall we say, “exaggeration”. But this AT&T commercial goes way beyond that. And I purchased an AT&T product just yesterday (not a laptop connect card), so you can’t say I’m biased against them.

I suppose you get my point; if an AT&T laptop connect card can connect to the internet on a deserted island in the middle of the Pacific ocean, you would certainly expect to be able to connect any place in the Continental United States. But, then again, we live in a society that not only accepts dishonesty as being ok, we seem to encourage it. And that being the case, why should we expect the “truth in advertising” laws to be complied with?

July 12, 2008

The Facts

Today I received a comment on my original post about the letter that is going around entitled “Big Oil” by Bill Phillips. (In case you haven’t seen it, the letter suggests Bill Phillips is a descendant of Frank Phillips of the infamous Phillips Petroleum Company, which is supposed to qualify him on oil and oil politics.) The comment is by Randy Phillips, who says he is a descendant of Frank Phillips. I use Randy’s name in this post, as he proudly used his name with his comment to my original post, so I don’t think he would have a problem with me using it here. You can read Randy’s comments by linking to my original post, but the following is his comment.

“The assertion that “Bill” Phillips wrote this article under the auspice that he is a relative or more accurately a direct descendant of Frank Phillips the founder of Phillips Petroleum is fraudulent. There is no Bill Phillips born under Frank Phillips. There are only a total of 17 blood offspring to date to the present fourth generation (where it current ends). 14 are still living; I am one of them. None of us has the name “Bill”. Not one of us has EVER worked for Phillips Petroleum or the merged Conoco Phillips. So, if you believe this letter was written by a credible source, I’m afraid you are mistaken. If it’s discussed further it should be noted that this is written with a fraudulent endorsement by a non-existing person.”

My View

I also made a comment on my post in response to Randy’s comments. In that comment I said it was for that very reason I inserted the last paragraph in my post, which suggest that Bill Phillips may not have written the letter and that it may be fraudulent. As I also suggested there are no limits to what many will do to achieve their objectives, and this “Bill Phillips letter” proves that. I have little doubt that Randy Phillips is real, as his location and email address is available to me, and I doubt anyone would make that available if they weren’t genuine. As you may have noticed in the infamous letter (if you’ve read it), no such information was made available to confirm that it’s genuine.

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 9, 2008

The Facts

On CNBC this morning Nouriel Roubini of RGE Monitor said the financial markets credit looses will go beyond $300 billion and reach $1 trillion. (RGE Monitor is a global economic and financial analysis firm based in New York City with additional offices in Asia and Europe, and ranked as one of the world’s best economic web sites.) Roubini teaches economics at NYU, and has an excellent record in his economic forecasting (even Becky Quick of CNBC admitted that, which was surprising). He’s very pessimistic about the future of our economy, and expects the current recession to get worse and “be long & protracted”. Relative to the financial crisis, Roubini predicts it will be the worst one since the great depression of 1929, that hundreds of banks will go bankrupt, and a government bailout will be of little help. Roubini also pointed to the 62,000 jobs that were lost in June as further evidence of an impending bad recession when coupled with the fact that we now have had six straight months of job looses.

My View

Democratic Governor Joe Corzine of New Jersey was also a guest on CNBC this morning talking about the economy, and the differences of how Barak Obama and Joe McCain propose to handle the economic situation. Corzine was pointing out how the Republicans want to spend & spend and not come up with a way to pay for the spending (this use to be the Democrats). It seems the Republicans want to spend the money, but don’t want the wealthy and corporations to pay their fair share. They seem to figure if they just “charge it”, the middle class and lower class taxes can pay for it later; if it gets paid at all.

Joe Corzine is a very well experienced economic politician. He is low keyed and doesn’t get rattled by the aggressors. Becky Quick and Joe Kernen of CNBC tried a couple of times to trick him up, but it didn’t work. When Corzine mentioned that incomers of $250 thousand and more weren’t paying their fair share of taxes, Quick said “$250 thousand doesn’t go as far in New Jersey as it does in the mid-west”, implying most people in New Jersey shouldn’t have to pay their fair share of taxes because it cost more to live there than in other places. Corzine shot back immediately saying 90% of the people in New Jersey made $100 thousand or less. Speaking directly to Quick, he went on to say “I hate this trickle down stuff, and that’s what you are talking about, under McCain and the last 7 or 8 years of Bush”. Quick quickly shut up (no pun intended). To support the trickle down economics flaw, Corzine pointed out that in the 1990’s (under Clinton) we had a 22 million job increase, while under Bush we have had only a 6 million job increase. He finished off that portion of his comments by saying “maybe the people who watch your show are not being bothered with the economy, but the vast majority is getting crushed”. The entire interview with Joe Corzine was extremely enlightening. You should go here and watch it. It’s 10 1/2 minutes long, but worth it.

Right after Corzine, CNBC had Mitt Romney on. This seemed to make the host smile with pleasure and delight. Romney was introduced with great fanfare and music. Joe Kernen started the interview by saying “I tried to ask Corzine some questions, but he was so smooth I couldn’t lay a glove on him”, and said to Romney “maybe you could counteract what Corzine said”. And, of course, Romney did, but it was with very flawed facts and disinformation. But to be fair, Kernen did ask Mitt Romney some tough questions, to which Romney answered in typical political fashion, which was really no answer at all. However, he didn’t miss out on the opportunity to mention “reigning in spending”, which was immediately followed up with that dirty word “entitlements”, which means Social Security, Medicare, and Medicaid; all those things middle and lower class people eventually come to rely on. But he conveniently ignored the fact that tax breaks and other “goodies” given to the wealthy & corporations is also “spending”; which now is also considered an “entitlement” by those recipients. If you like, you can watch Romney’s interview.

Both politicians, Corzine and Romney, were basically promoting their respective Presidential candidates and throwing rocks at their opponents. But when it comes to the proposed tax plan each candidate has officially filed, the facts speak for themselves. I wrote a post on this last month, and once you read that and all the supporting documentation, you to will know the facts, whether you want to accept them or not.

As for CNBC host, with the rare exception of one or two, they certainly come across as supporting the political right. (And to think Rupert Murdoch, owner of Fox News, started his business channel because he thinks “CNBC is too anti-business”.) Any guest who speaks too negatively about the economy, growth, or the market while under a Republican President, they (the host) try to get them to reword their comments or change what they are saying. If they can’t, they just wait until the interview is over and then try to debunk them when the guest is no longer around to defend. And you certainly can’t take the word of the many investment managers CNBC has as guest. They are never going to give the market or the economy a bad report card. If investors stop investing, those managers are loosing big money. Even while the “Bullish” market is at 27.4%, the lowest it has been since 1994, the investment managers are saying the Bear market is over. Most say all will be well in “XX” months, so “now is the time to invest”. Naturally, since no one has a crystal ball to refute them, they have nothing to loose; and if they are wrong, no one will remember what they said.

CNBC often cites the result of their on-line and television polls on these issues. Sure, their polls are going to be positive about the economy and the markets; as I said before, the vast majority of the people who watch CNBC are in that upper 5%, and not only will that 5% not be bothered by the bad economy, they have much to loose if they support the idea the economy is severely damaged. So I put little credence in CNBC polls.

My bottom line on this post is that we are in a recession by its basic definition, regardless of the arguments, and it is going to get much worse. We can thank the Bush administration and the changes in laws he has insisted on for the markets and big businesses. However, if you are part of that 5% who has become wealthy, or wealthier, by those changes, you are happy and not bothered by the recession.

July 8, 2008

The Facts

Henry Waxman, Democratic Representative, is considering legislation that would ban federal money to pay for positions in the White House such as the one that Carl Rove held during President Bush’s first term in office. Waxman says Rove was in charge of campaign politics for the Bush administration, and taxpayers should not have to pay for this kind of position. Waxman said “can you imagine the reaction if each member of Congress had a campaign person paid for with taxpayer dollars?”

My View

Only George Bush and other radical extremist Republicans would have the gall to place a position like that in the White House paid for by taxpayer money. I use to think the Democrats were an underhanded political party, but they are angels now compared to what the radical extremist Republicans have pulled over the past fifteen plus years. Rove’s position was tagged as an “aide”; therefore it could be passed off as a necessary position paid with tax money. But I noticed he left the job after Bush was reelected. I guess he wasn’t needed anymore.

Karl Rove has redefined dirty politics to its lowest form and set a new standard of just how low people will stoop to obtain a goal. We should all be very proud of that. Political office, especially the oval office, has so much uncontrolled power that the likes of Karl Rove will stop at nothing to get elected. If history is honestly written it’s not going to be very kind to Rove. He has had more than his 15 minutes of fame, and he has basked in that glory. Somehow, he has managed to convince himself that the lie’s he spreads is ok, as long as “it’s in the best interest of the country” (which really means in the best interest of the party). When the time comes for his life to end, if he is aware that his time is near, he is going to have a miserable death. However, I say that on the basis that he has a conscious, and it’s hard for me to believe he has one. But most people who live a life without one seem to suddenly acquire a conscious when they are on their death bed.

Over the past six years I have paid close attention to the disinformation and outright lies put out by both major political parties, and the Republican Party and their spokespersons can take great pride in the fact they have won hands down by such a large margin it is immeasurable. They come in form of emails, letters, ads, and in live forums with friendly host who will not challenge them. As much as I despise the people who make up the Democratic Party, I find myself asking if I really want a party in power that has published so many lies. Let’s face it; if they will tell that many lies about their own party and their opponents party in order to get elected, just how honest can I expect them to be once in office; enter George Bush.

July 3, 2008

The Facts

You may have already received an email from a friend (with content inserted, attached, or a hyperlink) of an article (or letter) supposedly written by Bill Phillips entitled “Big Oil”. Or, if you have “googled up” the words “big oil”, you most certainly have found this article. Bill Phillips is a descendent of the infamous Phillips Petroleum Company owner(s) (now ConocoPhillips), and, according to the intro to the article (obviously by someone else), has been in the oil business for “nearly 50 years”. If you read his “Big Oil” article, there can be no doubt that Phillips is casting a vote for the Republican Party and denigrating the Democratic Party. It’s all about which political party is responsible for the oil crisis, the high price of gasoline, the devalued dollar, & other things, and who should be in political control of the country.

My View (& some more facts)

I learn of this article from a friend who included me in an email he sent out to his friends. Of course, my friend is of the “Republican” persuasion, which is fine with me, so I wasn’t surprised to get it from him. But what’s ironic is that people will read these sorts of things and, because it says what they already want to hear, they buy into it hook, line, and sinker without questioning anything or doing any research on it. In this case, since Bill Phillips has “spent nearly 50 years in the US oil and gas industry”, many will considered him an “expert” on the politics of oil, and on the “facts” about oil production. But once you start doing some research on his “facts”, you find they are very slanted in favor of his politically views, and in some cases, absolutely not true.

Take his quote on royalty percentages; he says outright that the “government collects 25% on the gross oil”, implying that every barrel that comes out of the ground is charged a 25% royalty. (He also implies that he’s talking about the Federal government.) But the actual published percentage’s by the Federal MMS (Minerals Management Services) is 1/6 and 1/8. Some states also charge a royalty, but that is negotiated at a state level and has nothing to do with the Democratic controlled Congress. Some states & private land owners can charge up to 25%, but that is negotiable.  But not everyone pays a royalty. If the cost of production is high, the MMS can, and often does, forgo the royalty. He also doesn’t point out that a large portion of charged royalties never get paid. In addition, oil prices are adjusted upward to offset the royalty cost, just like manufactures adjust their cost upward to include any taxes they pay. (Besides, if all royalties were dropped today, we’d see no decrease in the price of crude oil, and everyone knows that.) So Bill Phillips quoting 25% as a blanket cost for royalties is very, very slanted, and borders very close on being an outright lie. And, of course, he doesn’t point out what the royalty money is used for. For example, The Land and Water Conservation get a huge chunk which is used to acquire parklands and to maintain them. The actual government policies that govern all this is very lengthy and puzzling, just as all government documents are, but this site gives you a brief look at oil and natural gas royalties.

The same slanted “facts” applies to the first several paragraphs of his article relative to his “definition” of big oil. He has slanted these “facts” so bad, they can’t even stand on their own two feet without falling over. To point out all the slants here would take a lot of paper, but you can easily find unbiased facts all over the internet that reveal the real truth.

Another of his “facts” is slanted pretty badly. He tells us “your dollar is now worth 0.62 Euro-cents”, and blames the Democrats for that. That dollar value is right on as of today, but what isn’t true is his blaming the Democrats for that. Between 2000 and 2006, with a Republican in the White House and the Republicans controlling Congress, the dollar fell from about $1.20 to about $.75 against the Euro. Therefore, using Phillips’ analogy, a Democrat Congress under a Republican President is responsible for a 17% drop in our dollar, but under a Republican Congress and Republican President, the dollar dropped 40%. Can you see any “politics” here?

In my research on this issue, I literally found dozens of sites that address the Bill Phillips article. I was quite surprised at the amount of places carrying his article and the responses to his article. A lot of the responses are opinions, but some actually address the issues of his article. You can find them as well as me, but this one (a blog), although not “official”, takes each of the articles paragraphs (or part of a paragraph) and addresses it. I can only say that it is “interesting”, but not known to be factual.

One other thing I should point out here; the Democrats have not passed one single piece of legislation in the past 18 months that has caused the price of crude oil to rise. (That’s the time they have been in control of Congress during the Bush administration.) Thus, about the only thing Phillips and others can say about that is that prices have risen simply “because Democrats have controlled Congress”. Naturally, they could not produce any evidence of support, but they could say it without fear of anyone producing evidence to the contrary. But there is one fact they can not deny; oil prices have risen 600% over the past 7 years. And guess who’s been in the White House for those 7 years; Republican George Bush. And that party also controlled Congress for almost 6 of those 7 years.

Here’s my point on the Phillips article; it is politically & selfishly motivated. If you already want to believe that the Democrats are bad and Republicans are good, you will like it and believe it; if you have different beliefs, you won’t. If you are like me, and don’t believe either party is taking care of America and its citizens as a whole, including our oil crisis, you will question everything Phillips says, just as you should with any article like this, whether it is slanted in favor of the Republicans or the Democrats.

Just yesterday I wrote this post on politicizing oil, and Bill Phillips has done that very well. And because he has “been in the oil business nearly 50 years”, he has accomplished his goal of convincing a lot of people he has the credentials to know what he’s talking about, and that the only way to go is with the Republicans. However, I doubt he’s made many converts; all those quoting him were already Republican supporters. All Phillips has done is given them more disinformation and lies to spread around to support their preconceived agenda.

Finally, I should point out this “fact”. In the hundreds of sites I researched, I have not found a single one that seems to the “official publisher” of the Bill Phillips article (letter). There may be one, but I haven’t found it. The “letter” is dated May 28, 2008 on every site I found, with only the site publish date differing. So you have to wonder; is this something that Bill Phillips really wrote, or just another of those millions of bogus “fact” articles that is constantly running around the internet and being passed around in emails?