oil prices and the mismaged economy

[gonzomax]

@BrainGlutton

How do you know that? Are you familiar with any historical examples where it has worked out that way?

Sure in America before we had the trust busters busting up monopolies. America was making the rich wealthier at the expense of the workers and at great cost to the country. Sound familiar. The accumulation of wealth in America can only be compared to those times. We should be at constant war to fight those who want to control industries for their benefit at the cost of the masses . That leads to ugly times.

[XT]

@unconventional

Ben Bagdikian asserts that American corporate controlled media function as a cartel, so the information people read and see everyday serves corporate interests.

So what? Even if I agree with that assessment (which I don’t), what has this got to do with the price of tea in China?

@gonzomax

OK now OPEC isn’t a cartel. You are sad.

OPEC isn’t a cartel?? If it walks like a duck and quacks like a duck it probably isn’t a cat…

OPEC
From Wikipedia, the free encyclopedia
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The Organization of the Petroleum Exporting Countries (OPEC) is a large group of countries[1][2] made up of Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, Venezuela, and Ecuador (which rejoined OPEC in November 2007). The organization has maintained its headquarters in Vienna since 1965, hosting regular meetings between the oil ministers of its member states.

The principal aim of OPEC, according to its Statute, is the determination of the best means for safeguarding their interests, individually and collectively; devising ways and means of ensuring the stabilization of prices in international oil markets with a view to eliminating harmful and unnecessary fluctuations; giving due regard at all times to the interests of the producing nations and to the necessity of securing a steady income to the producing countries; an efficient, economic and regular supply of petroleum to consuming nations, and a fair return on their capital to those investing in the petroleum industry."[3]

OPEC’s influence on the market has been called into question. Several members of OPEC alarmed the world and triggered high inflation across both the developing and developed world when they used oil embargoes in the 1973 oil crisis. OPEC’s ability to control the price of oil has diminished somewhat since then, due to the subsequent discovery and development of large oil reserves in the Gulf of Mexico and the North Sea, the opening up of Russia, and market modernization. OPEC nations still account for two-thirds of the world’s oil reserves, and, in 2005, 41.7% of the world’s oil production, affording them considerable control over the global market. The next largest group of producers, members of the OECD and the Post-Soviet states produced only 23.8% and 14.8%, respectively, of the world’s total oil production.[4] As early as 2003, concerns that OPEC members had little excess pumping capacity sparked speculation that their influence on crude oil prices would begin to slip.[5][6]

Economics

OPEC decisions have had considerable influence on international oil prices. For example, in the 1973 energy crisis OPEC refused to ship oil to western countries that had supported Israel in the Yom Kippur War or October War, which they fought against Egypt and Syria. This refusal caused a fourfold increase in the price of oil, which lasted five months, starting on October 17, 1973, and ending on March 18, 1974. OPEC nations then agreed, on January 7, 1975, to raise crude oil prices by 10%. At that time, OPEC nations — including many who had recently nationalized their oil industries — joined the call for a new international economic order to be initiated by coalitions of primary producers. Concluding the First OPEC Summit in Algiers they called for stable and just commodity prices, an international food and agriculture program, technology transfer from North to South, and the democratization of the economic system.[citation needed] Overall, the evidence suggests that OPEC did act as a cartel, when it adopted output rationing in order to maintain price.[15]

Emphasis added. It’s a cartel in all but name. Whatever you want to call it, it doesn’t change the fact that taking what they say at face value or as gospel is pretty stupid.

-XT

[Gorsnak]

Obviously if it were a cartel it would be CPEC. It’s just an organization!

[Spoke]

@xtisme

Emphasis added. It’s a cartel in all but name. Whatever you want to call it, it doesn’t change the fact that taking what they say at face value or as gospel is pretty stupid.

I agree with that in general, but in this case, OPEC happens to be right. The soaring oil prices aren’t a function of low supply, but rather are a function of the plummeting dollar. And the plummeting dollar is not something OPEC can fix.

[XT]

@Gorsnak

Obviously if it were a cartel it would be CPEC. It’s just an organization!

Good point.

-XT

[XT]

@spoke-

I agree with that in general, but in this case, OPEC happens to be right. The soaring oil prices aren’t a function of low supply, but rather are a function of the plummeting dollar. And the plummeting dollar is not something OPEC can fix.

They are wrong in the fact that we don’t manage the economy the way they imply. The government doesn’t control the housing market and didn’t produce the bubble that has recently popped. The dollar was due for a re-adjustment…it was being maintained at an artificially high level for years now by countries who benefited from a relatively high dollar compared to their own currency.

OPEC’s statements were simplistic and basically just a way to rationalize their refusal to up production (if it wasn’t this it would have been something else if they didn’t want to up production). The OP latched onto it because it’s a bust on Bush and it’s something simple he COULD latch onto. Let’s not introduce complexity when there is a good Bush bash to be had. I just find it ironic that the OP would latch onto and swallow hole statements coming out of an organization such as OPEC…considering his stance business in general.

Oh…and I agree. OPEC can’t fix the mess we have gotten ourselves into. We’ll have to ride this coaster to the bottom and then see where we are at while we climb back out. Going to be a rough couple of years I’m guessing.

-XT

[Barry_From_Eastenders]

@BrainGlutton

How do you know that? Are you familiar with any historical examples where it has worked out that way?

Wouldn’t it have been easier to say Cite?

IMHO, it make more sense than saying something like:

You mean private corporate industry would be a kid in a candy store. The rest of us would have all the cavities as a result of their greed and selfishness. Well, at least until it all falls apart and government has to step in.

[Barry_From_Eastenders]

@xtisme

AFAIK we NEVER tried ‘no management’. If you have some evidence that it’s ever been tried I would love to hear it. If you are talking about the 19th century the government had it’s fingers in the pie constantly. We didn’t have a Fed then, if that’s what you meant…but no Fed does not equal no management or manipulation.

-XT

This!

[Barry_From_Eastenders]

@unconventional

The current US economic situation makes a solid argument against a laissez-faire economic philosophy. The invisible hand is a miserable failure, yet again. A corporate controlled newspaper with an OP-Ed defending the current American free market model is propaganda and dismisses the reality most Americans live everyday. If the public is inculcated in the supremacy of neoliberalism, it becomes the accepted truth.

Would you be so kind as to direct us to a “Peoples” magazine where we can learn the truth?

(So? How long till one of us calls the other a Nazi? )

[Barry_From_Eastenders]

@gonzomax

Sure in America before we had the trust busters busting up monopolies.

Monopolies are actually one of the main enemies to Laissez-faire economics. That’s actually one place where the government should step in.

[gonzomax]

Executive on a Mission: Saving the Planet (Published 2007)

Ray Anderson head of the biggest carpet conglomerate say our brand of capitalism needs fixing. He has exerted a lot of effort to clean up his production. Strange how an inside guy can see what the parrots of industry cannot. He feels industry should be cleaned up and it can. We do not have to ruthlessly plunder.

[Ocean_Annie]

@xtisme

So what? Even if I agree with that assessment (which I don’t), what has this got to do with the price of tea in China?

-XT

You dismiss information because it is from a cartel, but you, like all of us, probably get information/opinions to support your position from another cartel: the mass media.

[MichaelQReilly]

@Spectre of Pithecanthropus

We’ve been mismanaging the economy for at least sixty years. Right after the Second World War, the consensus grew up that the efficiencies of the past, like comprehensive mass transit, railroads, centralized patterns of homes and workspaces were outmoded. Highways, suburbs and cars were in. Since then nearly all development has been dependent on an endless supply of cheap oil. That supply is now ending. While I do not expect the utter collapse of civilization as a result, I do think the dislocations, disappointments, and diminished expectations that result will haunt us for generations to come. I wish to hell I wasn’t in this handbasket but I am.

You nailed it. Decreased oil consumption in the U.S. is unlikely because most people have no choice. Thanks to the way we’ve built since WWII, a huge majority of the population HAS to drive in order to get anywhere.

[Ocean_Annie]

@Barry From Eastenders

Would you be so kind as to direct us to a “Peoples” magazine where we can learn the truth?

(So? How long till one of us calls the other a Nazi? )

Here ya go - Real Journalism

[Voyager]

@MichaelQReilly

You nailed it. Decreased oil consumption in the U.S. is unlikely because most people have no choice. Thanks to the way we’ve built since WWII, a huge majority of the population HAS to drive in order to get anywhere.

We may have to drive, but we don’t have to drive Hummers. Replace every SUV which never goes anywhere more wild than the WalMart parking lot with a car with decent gas mileage, and our consumption would drop tremendously.

[Magiver]

@gonzomax

http://query.nytimes.com/gst/fullpage.html?res=9D0CE7D71139F935A35755C0A967958260
The problem with coal production is whether we have to destroy mountains and rivers to mine it. We have the 2nd most coal production in the world. How has the industry been derailed.?

In 1996 Bill Clinton turned the World’s largest reserve of low-sulfer coal into the Grand Staircase-Escalante National Monument (in Utah). Ron Brown could probably explain it better.

[Magiver]

@Voyager

We may have to drive, but we don’t have to drive Hummers. Replace every SUV which never goes anywhere more wild than the WalMart parking lot with a car with decent gas mileage, and our consumption would drop tremendously.

Market forces are already granting your wish. SUV sales are down and one of the most cost-effective hybrids is the Ford Escape. When I say cost effective I mean return on investment including money recouped on gas savings.

While I agree that many SUV’s are used to get groceries a lot of them are used to tow stuff with. The Ford Escapes of the world fit into the category you describe but for those people towing stuff then diesels will fill the gap. As the price of gas climbs the process will be accelerated naturally. The fleet fuel economy changes recently passed won’t mean a damn thing.

[treis]

@xtisme

They are wrong in the fact that we don’t manage the economy the way they imply. The government doesn’t control the housing market and didn’t produce the bubble that has recently popped. The dollar was due for a re-adjustment…it was being maintained at an artificially high level for years now by countries who benefited from a relatively high dollar compared to their own currency.

The government does control the deficit and fed rate. The only reason that the dollar can stay artificially high is because China can use their dollars to buy treasury bonds.

[MichaelQReilly]

@Voyager

We may have to drive, but we don’t have to drive Hummers. Replace every SUV which never goes anywhere more wild than the WalMart parking lot with a car with decent gas mileage, and our consumption would drop tremendously.

I agree, but returning to my post and the one that I agreed with, our mindset and building habits are what allowed the SUV craze to happen in the first place. The ever widening and building of more roads and the price of gas which didn’t reflect the true cost of driving directly enabled the H2.

[RickJay]

@treis

The government does control the deficit and fed rate.

The government does NOT control the interest rate - not directly, anyway.