Will the World Like the US Better Under Obama?

[editec]

have no problem with capitalism and never have. I do however have and always have had a problem with ruthless capitalism unchecked when it is to the detriment of this Nation and its people.

Just as I can say I have no problem with some socialist programs where they are necessary, but I DO have a problem with unchecked socialism.

You ran yoour thoughts up the flagpole and let me tell you I salute them both

Capitalism is an excellent economic system that can create enormous wealth.

It can ALSO be the root source of multiple tragedies of the commons.

Socialism can be a fine system of governance.

It can also become the chains that enslave a people.

the problem is not capitalism...neither is it socialism (which is really government in any form).

The problem is always PEOPLE, folks.

People using one system or the other to screw their neighbors.

We do not live in a capitalist society.

We do not live in a socialist society, either.

We (americans) live in a mixed economy (one with capitalism for the poor, socialism for the rich) and a shamocratic republic.

ORIGINAL SIN not in the theological sense, but in the humanist sense.

GREED AND FEAR are the two things that make individuals use their power to screw their neighbors.

that is really all original sin is describing, as far as I am concerned.

It is a metaphor, dig?

 

[cbi0090]

At the moment the US has a huge PR problem. People outside its borders generally don't like it. Why? George Bush and a bullying "do as we tell you, not as we do" big stick being waved. I think Obama has the ability to make the US back into one of the most well liked nations again. It'll take a while, and a lot of hard work, but he can do it. His biggest problem will be whether he kowtows to certain lobby groups within the US political system.

Teddy Roosevelt said that the world will never like us and he's been correct but only from the elite perspective. Only those elite throughout the world don't like us. The common person has a completely different perspective (when they aren't flag waving for one of their leaders).

 

[editec]

The common person has a completely different perspective (when they aren't flag waving for one of their leaders).

Happily for us, most of the common people in rest of the world judge us based on what they know about American life from TV.

You know: Dallas, Falcone Crest, MTV, reality TV, snoop dog and pablum like that?

Apparently we're all obscenely rich people, self centered, greedy, prone to murder, drug addicted, sex addicted and almost none of us have to work?

They think that the problems we have are either solved with guns or by a clever black servant who really runs our mansions?

They think that girls who work in coffee shops in New Yrok can afford fashion designer clothes, that they make enough money to live in apartments that would cost $6000 a month.

 

[ScreamingEagle]

Why has the price of petroleum risen so quickly?

Surely the answer cannot be found in a simple supply/demand equation.

The demand for petroleum hasn't risen by 60% in the last two years. Neither has the supply fallen by 60%.

In May 2006 the price of oil was about $80 a barrel (in 2008 dollars)

Now it's what... about $130 (in 2008 dollars) or so, right?

Why?

Until we can answer that question, finding a solution to the problem is going to rather difficult, isn't it?

Oil companies do NOT control the price of oil...not anymore. If that is your point Screaming Eagle, then I quite agree with you when you suggest that punishing the oil companies will not solve this problem. They seem to have very little to do with pricing petroleum since they control so very few wells.

Most of the world's oil is controlled by foreign governments, not by the oil companies that buy their oil,

OTOH, the oil companies ARE making a tremendous windfall from this situation, so you can perhaps understand why some Americans are calling for their heads.

At any rate, do you have a solution, Screaming E?

Given that the rising prices have nothing to do with a decrease in supply OR an increase in demand, I mean.

FWIW, We do not live in a capitalist society. Neither do we live in a socialist society.

We live in a mixed economic system where elements of capitalism and socialism effect our world.

So to complain that socialism is going to hurt us, when the oil companies do so very well because of the socialist/capitalist economy is sort of ignoring the reality of what we are dealing with, don't you think?

In reply I'm going to post a pointed article that was written two whole years ago….because essentially nothing has changed…except price increased from about $2.50 to 4.00 (and will probably go higher)….which (in addition to the weakness of the dollar) is still a reflection of….

Say It With Me: Supply and Demand
By Charles Krauthammer
April 28, 2006


If you thought the Dubai port deal marked a record high in Washington cynicism, think again. Nothing can match the spectacle of politicians scrambling for cover during a spike in gasoline prices. And this time the panderfest has gone all the way to the Oval Office. President Bush has joined the braying congressional hordes by ordering the Energy and Justice departments and the Federal Trade Commission to launch an investigation into possible gasoline price fixing.

What a disgrace.

Precisely 10 years ago (April 29, 1996) as gas prices reached a shocking $1.27 a gallon, President Bill Clinton ordered his Energy and Justice departments to launch investigations to find out why. In my column that week, I offered a wild guess as to why: "supply is down and demand is up." I offered Energy Secretary Hazel O'Leary and Attorney General Janet Reno a $100 bet (I roll high on sure things) that their million-dollar probes would do nothing more than confirm my hunch.

No takers. Even Cabinet secretaries don't throw away C-notes. Sure enough, months later these perfectly pointless investigations discounted charges of price gouging and attributed the price hike to . . . increased demand and decreased supply.

Today, every time an Iranian mullah opens his mouth about nukes, the risk premium for Persian Gulf supply interruptions jumps again. Crude oil prices alone account for about $1.70 of what you pay for a gallon at the pump. So 10 years later, I'll wager again. Here's what the Bush search for price gougers and profiteers will find:

Demand is up. China has come from nowhere to pass Japan as the number No. 2 oil consumer in the world. China and India -- between them home to eight times the U.S. population -- are industrializing and gobbling huge amounts of energy.

American demand is up because we've lived in a fool's paradise since the mid-1980s. Until then, beginning with the oil shocks in 1973, Americans had changed appliances and cars and habits and achieved astonishing energy conservation. Energy use per dollar of gross domestic product was cut by 30 percent in little over a decade. Oil prices collapsed to about $10 a barrel.

Then amnesia set in, mile-per-gallon ratings disappeared from TV ads and we became "a country of a million Walter Mittys driving 75 mph in their gas-guzzling Bushwhack-Safari sport-utility roadsters with a moose head on the hood, a country whose crude oil production has dropped 32 percent in the last 25 years but which will not drill for oil in the Arctic National Wildlife Refuge for fear of disturbing the mating habits of caribou."

I wrote that during the '96 witch hunt for price gougers. Nothing has changed. Except that since then, U.S. crude oil production has dropped an additional 12.3 percent. Which brings us to:

Supply is down. Start with supply disruptions in Nigeria, decreased production in Iraq, and the continuing loss of 5 percent of our national refining capacity because of damage from hurricanes Katrina and Rita. Add to that the mischief of idiotic new regulations. Last year's energy bill mandates arbitrary increases in blended ethanol use that so exceed current ethanol production that it is causing gasoline shortages and therefore huge price spikes.

Why don't we import the missing ethanol? Brazil makes a ton of it, and very cheaply. Answer: the Iowa caucuses. Iowa grows corn and chooses presidents. So we have a ridiculously high 54-cent ethanol tariff and ethanol shortages.

Another regulation requires specific ("boutique") gasoline blends for different cities depending on their air quality. Nice idea. But it introduces debilitating rigidities into the gasoline supply system. If Los Angeles runs short, you cannot just move supply in from Denver. You get shortages and more price spikes.

And don't get me started on the missing supply of might-have-been American crude. Arctic and outer continental shelf oil that the politicians kill year after year would have provided us by now with a critical and totally secure supply cushion in times of tight markets.

In March 2000, the price of gas hit $1.80 per gallon. Scandalized congressional Republicans shamelessly pushed for repeal of Clinton's whopping 4.3-cent gas tax increase. Now that the president is a Republican, what do you think Senate Democrats are proposing? A 60-day suspension of the federal gas tax. It would cost $6 billion and counteract the only good thing that comes with high gas prices -- the incentive to conserve.

George Shultz once said, "Nothing ever gets settled in this town." But even Shultz, who has seen everything, must marvel at the perfect regularity, the utter predictability, of the bottomless cynicism of Washington in the grip of gasoline fever.

Charles Krauthammer - Say It With Me: Supply and Demand - washingtonpost.com

 

[AllieBaba]

THe world doesn't hate America. The America-haters in America want us to believe they do, but they don't.

The only members of the global community who hate us hate us because they want something we have and they can't take from us. So they piss and moan about how horrible we are, all the while hiding the fact that the real reason they hate us is because they are threatened by the freedom of others.

 

[editec]

Demand is up. China has come from nowhere to pass Japan as the number No. 2 oil consumer in the world. China and India -- between them home to eight times the U.S. population -- are industrializing and gobbling huge amounts of energy.

Demand is up 60% in the last year?

Ah...no.

Supply is down. Start with supply disruptions in Nigeria, decreased production in Iraq, and the continuing loss of 5 percent of our national refining capacity because of damage from hurricanes Katrina and Rita. Add to that the mischief of idiotic new regulations. Last year's energy bill mandates arbitrary increases in blended ethanol use that so exceed current ethanol production that it is causing gasoline shortages and therefore huge price spikes.

Again, nothing in the above mentioned explains a 60% increase in price increases in the last year or so. Everything above has been a problem for much longer than that.

Sorry, while I understand how the fundamentals are inevitably driving up the cost of petro, nothing about those fundamentals explains such a dramatic spike in such a short time.

What DOES explain this IS market demand, but not the end user market, the FUTURES market.

There IS a huge demand for futures contracts, because there was a huge flight from other markets (like the stock market and the the currency market, even the real estate market).

Really, nothing else really explains this price spike that I can see in the numbers.

Sheer folly of a market gone slightly nuts.

Investment will find a place to go, and right now, the monied interests see no better place to put their money than into commodities futures.

It really edoesn't take that much extra investment money in those markets to dramtically effect prices.

This is a speculative bubble, methinks.

 

[ScreamingEagle]

Demand is up 60% in the last year?

Ah...no.

Again, nothing in the above mentioned explains a 60% increase in price increases in the last year or so. Everything above has been a problem for much longer than that.

Sorry, while I understand how the fundamentals are inevitably driving up the cost of petro, nothing about those fundamentals explains such a dramatic spike in such a short time.

What DOES explain this IS market demand, but not the end user market, the FUTURES market.

There IS a huge demand for futures contracts, because there was a huge flight from other markets (like the stock market and the the currency market, even the real estate market).

Really, nothing else really explains this price spike that I can see in the numbers.

Sheer folly of a market gone slightly nuts.

Investment will find a place to go, and right now, the monied interests see no better place to put their money than into commodities futures.

It really edoesn't take that much extra investment money in those markets to dramtically effect prices.

This is a speculative bubble, methinks.

Mr. Crude Oil (Arjun N. Murti, Energy Analyst, Goldman Sachs) says:

Oil markets are driven by fundamentals. Our response to the notion that it is merely a bubble is that you are still seeing no supply growth. If the price isn't real, where is the supply?

Gas may have to hit $5.75 a gallon before consumption cools enough to take the heat off fuel prices.

What Mr. Crude Oil Sees Ahead - Barrons.com

 

[editec]

Oil markets are driven by fundamentals. Our response to the notion that it is merely a bubble is that you are still seeing no supply growth. If the price isn't real, where is the supply?

I'm sorry Mr Murti, but honestly the above simply doesn't make any sense.

"If the price isn't real"? The price is very real.

where is the supply?

Huh?

 

[editec]

Our response to the notion that it is merely a bubble is that you are still seeing no supply growth. If the price isn't real, where is the supply?

With all due respect to Mr. Murti, say what?

New supplies can't come online overnight.

Demand cannot come down dramatically overnight, either.

Demand for oil is not especially (or quickly) price elastic.

No simplistic supply demand equation explains this price increase.

Not unless they're not telling us something we need to know, at least.

That, I doubt, frankly.

 

[ScreamingEagle]

With all due respect to Mr. Murti, say what?

New supplies can't come online overnight.

Demand cannot come down dramatically overnight, either.

Demand for oil is not especially (or quickly) price elastic.

No simplistic supply demand equation explains this price increase.

Not unless they're not telling us something we need to know, at least.

That, I doubt, frankly.

Well, I have to admit that his answer is rather murky. Adding to the suspicion is the fact that Goldman Sachs is one of the major insiders and players. So you think the control of oil prices has moved from OPEC to Wall Street?

Does this mean that oil companies are putting oil in storage? At what point would they release their stores to bring down prices? How much would that be per gallon?

 

[Annie]

I'm just jumping in here with a factoid:

SignOnSanDiego.com > News > Business -- Iraq oil minister says security allowed oil boost

ASSOCIATED PRESS

3:44 a.m. June 7, 2008

BAGHDAD – Iraq's oil minister says improved security has allowed the country to boost its oil production to pre-war levels.

Oil Minister Hussain al-Shahristani says the increase has enabled Iraq to earn nearly $28.5 billion in revenues in the first five months of this year.


Advertisement
Production last month hit the pre-war level of 2.5 million barrels a day. And al-Shahristani tells parliament that in the coming five years, Iraq should be able to produce between 4 and 4.5 million barrels a day....

 

[editec]

Does this mean that oil companies are putting oil in storage?

I don't think they have to do that. The amount of money being shunted into the commodities markets is enough to increase the spot price and futures contracts without having any real shortages.

At what point would they release their stores to bring down prices? How much would that be per gallon?

Not that I think there are any stores to release, but I think the price of oil is about 40% higher than it ought to be.

Of course if you believe in the perfect market theory, then the price of oil is exactly right.

Market prices are not subject to law of supply of demand, but they ARE subject to the perception of the players.

Perception is reality in the markets, folks.

 

[ScreamingEagle]

I don't think they have to do that. The amount of money being shunted into the commodities markets is enough to increase the spot price and futures contracts without having any real shortages.




Not that I think there are any stores to release, but I think the price of oil is about 40% higher than it ought to be.

Of course if you believe in the perfect market theory, then the price of oil is exactly right.

Market prices are not subject to law of supply of demand, but they ARE subject to the perception of the players.

Perception is reality in the markets, folks.

Perception has always affected the markets....however, I still believe that in this case the perception is grounded in reality….demand is really growing but supply is not really growing. Forty percent of this super spike may be due to speculation as you say but when and where does supply come along to ease this speculation spike? I think that's what Mr. Crude Oil was referring to.

So unless there is something hinky going on with the commodity market, it seems to me our only real choices for relief are creating more supply or using less...or seeking alternatives...I think solar will be major in a few years.

Other than small gains like Iraq getting its production back up, Mexico, and Brazil's brand new possibilities off their coast, there ain't that much happenin' at the moment….as per usual Drill Nuthin' Congress is pretty much sittin' on its thumbs...

 

[AllieBaba]

Solar has already been ruled out as a viable option for massive-scale energy production.

The only viable option is to drill for our own oil. It's idiotic that we don't. This mess is our own making, and I love to watch the morons who thought putting a cap on US drilling would be a good idea piss and moan over the cost of gas, and try to find someone else to blame.

WHat a bunch of goofs.

 

[editec]

Forty percent of this super spike may be due to speculation as you say but when and where does supply come along to ease this speculation spike?

If there is no significant shortage to begin with, then no supply need come along for the market to correct.

Was there a significant shortage of housing that drove up the cost of it? Or was there simply so much money chasing real estate that the prices rose to absorb all available funds?

Was there a significant shortage of dot.com stocks to explain the imprudence that people showed when they laid their money down on those turkeys?

Shall I ask you about the demand-supply insanity of the tulip bulbs bubble, or have I made my point clearly enough?


Now as to you excellent point that there is an inevitable upward pressure on the price of oil?

Sure, absolutely. The price of oil is going to go up over the long run, but not like this.

The inevitable price increases should have SOMETHING to do with the actual demand and supply condition at the time.

We are not running out of oil tomorrow, after all.

So I think given that there was no spectacular supply disaster, and a predictable growth in demand, we will see a steady climb in prices, but not 40% a year, for goodness sakes.

This price makes no sense, and I do not believe it can last much longer.

We'd both best hope to God I'm right, about this, too.

We will be in world-wide depression soon if I'm not.

 

[Chris]

President Obama will help America's image abroad tremendously, and this change in image will help America.

 

[Annie]

President Obama will help America's image abroad tremendously, and this change in image will help America.

How and why?

 

[manifold]

How and why?

It will help put to rest a lot of the negative stereotypes about America and Americans. When we re-elected Bush, we effectively turned our nose and said FUCK YOU to the rest of the world. In fact, that's precisely why I voted for him. However, in retrospect, spite probably wasn't the best basis for making a choice at the polls. I can be be pretty small sometimes.

 

[Chris]

How and why?

Obama is smart, charismatic, and well spoken. He presents a different face to the world. A multiracial, multicultural face. More like the real America.

 

[Chris]

Solar has already been ruled out as a viable option for massive-scale energy production.

The only viable option is to drill for our own oil. It's idiotic that we don't. This mess is our own making, and I love to watch the morons who thought putting a cap on US drilling would be a good idea piss and moan over the cost of gas, and try to find someone else to blame.

WHat a bunch of goofs.

Solar has been ruled out? By whom? Exxon?

The Israelis are building the largest solar power station in the world and expect this one station to supply 5% of their energy needs. Their goal is to be completely independent of foreign oil by 2030. The Danes already get 20% of their energy from wind power. It can be done. The technology is there. We need to move in this direction because alternative energy will be the most important industry of the 21st century. Are the Danes and the Israelis smarter than us?