There are some very ugly economic dynamics going on in America right now and it is about to be made much worse by Obama’s Fracking and Natural Gas Boom (aka “energy independence”). Let me state upfront that America needs – now more than ever – to Nationalize the Fossil Fuel and Dirty Energy industry.
For right or wrong, the excerpt below recites the rational that Washington allows Wall Street to impound in the price we pay for gas here in the domestic economy. And this speaks to one of many problems: Wall Street Traders should not be allowed to use surplus wealth to speculate and add huge margins to the price of gasoline – a key determinant of the country’s economic health and social stability. It is estimated that the prices at the pump are double what they would be because of Wall Str’s participation.
Now, if you nationalize the dirty energy industry and lower domestic prices you can raise government revenue a couple of ways: (1) stimulate demand by increasing the 99% disposable income; and (2) ear mark some of the savings to a tax (e.g. kick out wall street and save $2.00 gallon, then impose a tax of $0.50 per gallon, still leaves the 99% better off by $1.50 per gallon). I would also point out that a nationalized oil and gas industry would allow the People to accrue the full benefit of the oil and gas reserves that are held in common opposed to selling them for pennies on the dollars to Big Corporate Oil. Finally, we already subsidize the Oil and Gas in other, more cash like ways, already so the Taxpayers may want to think of these subsidies as an investment - an investment where they truly deserve to have an increase in their rate of return.
The article cites Wall Street’s World wide supply and demand concerns and how they effect their trading that results in the price of gasoline, oil, fracking oil, and natural gas that we all pay. The supply of oil is not equally distributed throughout the World. Some countries have less and some more. This leads to a problem for the American People: it is more profitable to sell American oil and natural gas on the international market. Producers can get a higher price if they export American Oil and Natural gas production than if they were to reserve what they produce for just consumption in the U.S. market were the same good(s) is abundant
But government can help sever the pricing relationship between domestic oil prices (domestic production sold domestically) and the price of oil it releases to the international market (domestic production exported). The problem is you’d have to Nationalize the Oil and Natural Gas industry, and most certainly have to kick wall street out of the pricing process. Sadly, America doesn’t even hint at doing it that way.
Instead, the system we have now saps the aggregate demand of the 99% with higher gas prices (drag on the economy), concentrates wealth in the hands of the wealthy (the least productive dollars in our economy – a drag on our economy), all while draining the government of a possible sources of revenue and savings (a drag on our economy).
Instead, as the article illustrates, we are fed what the Wall Street Traders are thinking everyday as they set painful prices.
“U.S. drivers are competing with drivers worldwide for every gallon of gasoline. As the developing economies of Asia and Latin America expand, their energy consumption is rising, which puts pressure on fuel supplies and prices everywhere else. “
“The U.S. still consumes more oil than any other country, but demand is weak and imports are falling. That leaves China, which overtook the U.S. late last year as the world's largest oil importer, as the single biggest influence on global demand for fuels. China's consumption has risen 28 percent in five years, to 10.2 million barrels per day last year.”
The article forces another good point: the way America currently operates the 99% does not participate in the success of the country. The well being (purchasing power) of the 99% is not really a determinant of the Nation’s economic success.
“Rising gasoline prices act as a drag on the economy because they leave less money in drivers' wallets to spend on other things. But because average prices have remained in a consistent range — between $3 and $4 per gallon since the end of 2010 — economists say their effect on growth has been minimal.”
All the growth goes to the 1%! In 2011 114% percent of the countries growth went to the 1% as the 99% actually lost ground. All the while, Obama was yammering on about the economies recovery. He meant, the 1%’s recovery, and they were recovering! The growth and the prosperity of the nation has been separated from the 99%. And with the focus on devastating the Commons – upon which we rely to stay alive – to turn America into the next OPEC they ugly dynamics are going to get worse.
So why should be tolerate fracking when it really only benefits the 1%? Especially, when it is the 99% that is paying the price for fracking in the form of a depleted commons. Outside of some of us being TEMPORARY wage slaves working the petroleum plantation the benefits of the Fracking and Natural Gas boom will not go to the 99%. And even these menial temporary benefits to the 99% will be offset by the investment in Climatge Change.
The vast majority of the permanent wealth benefits of Obama's fracking boom will go to the 1% - period.
And that's my quick stab at the problem.....