Idaho GOP Sen. Larry Craig stood on the Senate floor last week to utter an amazing statement. He said that "...a premature withdrawal from Iraq could have dire consequences with our economy and energy supply...."
Craig's Democratic challenger Larry LaRocco had something to say about this new-found Republican honesty in an interview with NewWest.net. Craig "has confirmed that [the war in Iraq is] no longer about security, it’s no longer about squashing terrorists-he’s putting the lives of our great men and women at risk for oil...."
So, it all about oil, folks. Meantime, the consumer is about to get screwed at the pump worse than you have ever experienced, due to oil refineries experiencing a record number of fires, power failures, leaks, spills and breakdowns, which results in less gas at higher prices.
It isn't just the refinery problems - real or imaginary-that are going to hit you in the wallet. Crude oil prices hover at near-record levels, and the cost of everything is going up to cover that larger expense. What can do you do about these higher costs? You can eat them!
Groceries haven't risen this much in so short a time since 1990, when they rose 6.5%. It was far worse during the oil crises in 1973 (16.4%) and 1974 (14.9%). But don't worry! Those "experts" who predicted that stealing Saddam's oil would be a cakewalk now predict that these higher oil prices are only temporary.
Meanwhile, a report on future oil prices released by CIBC World Markets suggests that "a growing appetite for oil in the developing world and a seemingly unquenchable thirst for it in most developed countries will push prices to $80 US a barrel this year, and to $100 US by the end of 2008."
Here's a final fact of economic life even neo-confidence Savants can't deny. If consumers don't have enough money to keep buying all those cheaply-made man-child toys arriving daily from Asia, our economy will collapse faster than you can say "Impeach Clinton!" What will happen to your lovely record-level Dow then?
Article comments
— go to most recent comments1 - Clavos
Oil prices keep rising, but we keep buying more and more of the stuff.
Apparently, prices aren't high enough yet.
Do you get your ideas from Paul Ehrlich?
2 - Baritone
I'm not sure just how many of us can NOT keep buying petrolium products. First, they are ubiquitous. Petrolium products go far beyond just the fuel and lubricants we use in our autos.
While a few of the larger cities in the US provide good public transportation, that is not true of a greater number of smaller cities. Many mid-western cities provide only token public transportation, usually in the form of a drastically trimmed down metro bus service. Most mid and far western cities have large suburban or "x-urban areas which are not served by these bus services. Only a few such cities have any commuter train service either. Obviously, there are even fewer options for rural folk.
The result is that most people in these areas have few options beyond the family sedan to get to and from work, to do the family shopping, getting the kids to soccer practice, making doctor visits, etc. Car pooling is an answer for some, but far from all. I literally could not do my job if I had to depend on public transportation or car pooling in my community.
Couple that with the general love affair most Americans have for their cars. Few people are willing to even consider other means of transport. Watch most auto ads on the tube. They generally depict people virtually creaming their jeans over their cars. Many people feel as passionately about their cars as NAR members do about their guns. (Maybe that's why drive by shootings are so popular. They offer the best of both worlds.)
How high will gas have to go before we stop buying it? Pretty high, I'd say.
Baritone
3 - Clavos
Baronius,
All of what you say is true.
But it doesn't account for the rapid RISE in demand.
I agree: the price will have to get considerably higher before we actually cut back, which would indicate to me that we're not nearly as close to cataclysm (or even hurting) as the author suggests.
Which is why I made reference to Ehrlich.
4 - Clavos
Damn, Baritone, I did it AGAIN!
I'm VERY sorry for trying to re-name you.
5 - Dave Nalle
So, the article has revealed that ONE representative embodies the beliefs of everyone in government. Wow, he should be like president or something.
As for the gas price, let's jack it up even more. I doubt the tiny amount of oil currently coming from Iraq would make much difference, so let's tack on a nice big federal gas tax.
Higher gas prices mean more money for small farmers and pressure to expand public transportation and increased sales of alternative fuel vehicles. Sounds great to me.
Dave
6 - Baronius
Hey, Clavos, I would never misspell NRA.
I've got to say that Baritone's point is valid. I believe that telecommuting and reorganization of communities will diminish oil needs in the long run, but there's very little wiggle room in the day-to-day oil consumption of a commuter.
Realist, your last few articles have been disjointed. This one's better. I still disagree, though.
7 - moonraven
The World Market folks were just quoting Hugo Chavez, who said now 80 bucks a barrel and next year 100 bucks a barrel.
And he should know--given that he controls OPEC prices. He has also yet to be wrong about any of this stuff.
Of course there are non-OPEC producers: Mexico (only 8 to 9 years of reserves left due to selling below OPEC prices to the US--and due to lack of maintenance and the milking of PEMEX as a cash cow soon to be out of the game anyway), Norway and Canada spring to mind.
But Norway is very keen on keeping its crude prices above the prices for OPEC crude.
Canada is a wild card in the game--and I suspect a lot of its chances of becoming a heavyweight player depend on whether its governments turn around and start heading towards keeping the profits in Canada instead of slushing them off to Big Oil. At the moment, they are hewading in the opposite direction--and one has to wonder just how deeply the reserves of masochism run in that northern neighbor....
MOST conscious folks have known EVERYTHING was about oil at least since Thoma Hartmann published THe Last Hours of Ancient Sunlight.
Anyone who has NOT read that book should be boiled in....oil.
8 - moonraven
Thom Hartmann, actually.
Because the book is so well-done I guess the collective consciousness expressed itself theough my fingers and wanted the writer to be female....
9 - Baritone
Would that we were back in the days when the Nederlanders based their economy on tulip bulbs.
Just owning a "Semper Augustus" or two would make you rich. Not very useful, but easier to keep around and much more attractive than a barrel of oil.
Baron - er - Baritone
10 - Clavos
"Baron - er - Baritone"
LOL!
11 - Baritone
Moon,
Just a note. Coincidentally, I had just recently placed a couple of Hartmann's books on hold at our local library including The Last Hours..."
Don't heat up the oil just yet.
Baritone
12 - moonraven
Considering you are a minority of ONE who even has intentions of reading it, I think I can safely start heating up the oil.
If it turns out that folks on this site are a lot more with it than they have shown themselves to be, I will make a HUGE btach of onion rings....
13 - Baritone
Mmmmm. Do you make your own breading? Don't use Vidalia onions. They lose their flavor when cooked. Oh, and use either peanut or maybe safflower oil. Do you have a good deep fryer?
B-tone
14 - Clavos
"Just owning a "Semper Augustus" or two would make you rich."
Until the bubble went the way of all bubbles...
15 - Baritone
Ahh, yes. Bubbles always burst, don't they?
When do you think the oil bubble will burst? It's a big, heavy-assed bubble which, when it blows, will leave a huge mess.
B-tone
16 - Clavos
Oh, yuck. Oil all over everything!...Oh, wait...it already IS...
17 - moonraven
B:
Rest assured that I learned to cook, recipe by recipe, from Escoffier's Ma Cuisine. Back in the 1960s. Since then I have added Russian, Mexican, Thai, Chinese, Japanese, Indian, Hungarian, Italian, Moroccan and Middle Eastern to the repertoire....
Onion rings are hardly a difficult project.
Nor is the French onion soup I made yesterday--complete with a stock made from beef bones....
18 - Baronius
See, Moon? There wasn't a single insult in that whole posting. You *can* do it.
19 - Baritone
I earned my culinary stripes (literally) as a cook in the U.S. of Army, and later as a manager of a fine seafood establishment named after a famous, though fictional pirate.
B-tone (I would use just "B" but then you might confuse me with "B" - just ask Clavos.)
20 - moonraven
Baronius:
I did not write insults until you guys insulted me--and all the other women who have ever tried to post on this site.
I am a mirror--I reflect back what you do.
So if you don't want to be insulted, clean up you act of degrading women.
21 - moonraven
Baritone:
I spent 11 days in the US Army in Fort McClellan, Alabama (otherwise knows as Deliverance Country).
It was the most disgusting food I have ever seen--something terrible called grits that was actually library paste, pulverized pork chops, collard greens cooked to the consistence of diarrhea.
Just one of the reasons I left.
22 - bliffle
Please pardon an unwelcome digression back to the original article, but it's been reported that Bush recently called Maliki and told him his number one priority is the Iraq Oil Law, which guarantees ultra-low prices to US oil companies. Not peace, not reconciliation, not police training, not army training, not getting the legislature to work through the month of August, not The Surge, none of those, just guarantee low prices to oil companies.
23 - moonraven
That's last week's news, Bliffle--but tomorrow's for the folks on this site who insist that black is white.
Thanks for reminding us that black is, in fact, black.
24 - Baronius
Moon, when was that exactly? In the past week or so, I've probably been shorter-tempered with you than usual, but for a few months now you've been yelling at me.
25 - moonraven
Baronius:
I have no idea what you are asking about?
When was WHAT?