What Crisis?

September 2000

By J. Michael

Clinton releases 30 million barrels of oil (approximately 1 billion dollars worth) and frees up 400 million dollars in federal aid to assist lower income families with increased heating costs this winter.

What a nice guy huh? What's the reason for all of this "emergency action"? Well don't you know? We are in the middle of an oil shortage crisis. Well, not really. But the Clinton administration, with the push of the Gore campaign sure is doing their best to convince us that we are! I'm sure most of you have heard the speculation that it's a political move on Gore's part, so I'm not going to go into that. No, there is more behind this that once again people aren't taking the time to think about, and yes, it's a serious matter, whether you think so or not. The mentality that these things aren't serious...or that the government will take care of us and we don't have to worry about it, is that exact mentality that has given us an ever powerful and corrupt government. We all have responsibility in this country!

How many remember the Mobile/Exxon merger almost two years ago? I distinctly recall being told that this was such a great thing for all of us! It would lower gas and oil prices (which were at record low levels at the time), and would allow for better competition! At the time, crude oil was going for around $9 a barrel and average gasoline prices were 88-92 cents per gallon. These prices hung around this level for a short time after their announced merger but then began to rise to more reasonable prices, despite their claims. If nothing else, one would assume from what they were saying, that gas prices would at least stay level, but instead, within a nine month period they rose an average of 35-40%. Can you think of any other consumer good that would raise it's price nearly 40% in less than a year? or even less than 3 years?

That nine month period brings us to the fall of 1999, when gasoline was around 1.25 per gallon. Certainly not outrageous, but a far cry from the 90 cents we were paying and the 1.00-1.10 we could have reasonably expected to average by the promises of Mobile/Exxon. However, by the spring of 2000, gas prices had reached an average of $1.80+ nationally, with many areas well over 2.00/ gallon. Crude oil prices had skyrocketed to over $35 per barrel. At that time, prices were expected by most analysts to continue to rise with no sign of a break and no reasonable guess as to when it would begin to fall. Now again, this is a gasoline price increase of well over 100% in a 12 month period. An unacceptable rate of inflation (which I thought the "experts" were telling us that inflation was dead?). Yet at the same time, although frustrating, these prices were still not "devastating". For the average person, gasoline is probably not one of their largest annual expenses, this is part of the reason they were able to get away with more than doubling the prices.

Now, about 7 months later, prices have dropped some, but we are told we are in a crisis which requires emergency reaction. It seems to me, that last spring was much more of a "crisis" then what we are experiencing now. Even still, last spring was nowhere near "crisis" levels.

What about the 570 million barrels of oil that the government has on reserve? This country goes through about 15 million barrels per day. So the 30 million barrels that our hero of a president has released will be consumed in 2 days. How is that supposed to help any? That is the solution to an apparent "crisis"? It's pathetic that people don't simply look at the numbers and realize they don't add up at all. How will a two day supply of oil have any bearing on price? I find it interesting that the day prior to the announcement, oil dropped $1.50 per barrel, placing prices around $30 a barrel. Am I to believe that the mere speculation of getting 2 days worth of oil will drive down prices that much? It's obvious this is a fabricated crisis, put in the minds of the public. Mr. Clinton has a history of fabricating problems for any number of reasons. But by golly, he's a hero for always coming up with some sort of solution!

Even still, I have a more serious problem with this entire scenario than the simple manipulation of oil prices and fabrication of national crisis. No, the game playing has become part of politics, however, it has now reached a new level. You see, there is a reason that America has an oil reserve in the first place. In reality, it's one of the MANY ingredients that has made us the most powerful nation on earth. It demonstrates power and wealth, and is one of the numerous pieces to the gigantic puzzle of who we are as a nation. This oil reserve is not intended to save us each a few dollars a month at the pumps. Instead, it is intended for such instances as we experienced almost a decade ago with the Gulf War. When we have war planes to fly, Navy ships to sail and Army tanks to drive, those oil reserves will ensure that even if the worlds oil supply is withheld from us, it won't stop us dead in our tracks. We can still go on to fight the battle and regain our position. 570 million barrels won't last our entire population much more than a month, but it would certainly keep our national defense fueled for a while, should a real emergency arise! Plain and simple, the release of these reserves is not only silly game playing and mind manipulation, but it's playing with national security.

Alright, I'm almost done. The experts are claiming that the average household that using oil for heating will see an average increase of around $20/month in heating costs. Yes, that's quite an increase, but in the overall picture, an extra $20 a month for one of life's core necessity expenses isn't much. $20 a month is not an emergency. In all seriousness, it's far from a national crisis. So in addition to releasing a mere 2 days worth of oil (which in reality wouldn't do squat for prices if there really was a crisis), Clinton has decided to allow $400 million in additional aid to help defray some of these costs for "those who really need it" (whatever that means, be curious who actually gets it!).

I would think $400 million would help quite a few people defray $20 a month for this winter in heating costs. So why the oil release? A $1 billion dollar worth release of oil to help save us all a couple of bucks doesn't make sense. Why not take some of that surplus our government keeps talking about and help those that need it? (which of course the surplus doesn't exist either.) Wouldn't that seem to be much more prudent and wise use of government money? Isn't it bad enough they give out so many handouts, now they are giving the entire U.S. Population a handout by releasing oil. Or if the government really wanted to help us and save more money, why don't they cut the highest taxed item we have?...GASOLINE. I believe the current tax rate is something of 30%. But see that would eliminate billions of dollars in revenue for state and federal government. Those would be actual, realized losses. No, it's much easier to pull off some illusion of taking emergency action. Release a billion dollars worth of sacred oil and make it right back in taxes, rather than loose billions in revenue and actually do something useful to help cut costs.

See there are always so many options, but unless the government tells the public about them, no one will think they exist and will simply trust that the right thing is being done on their behalf. Our government was set up for the people and by the people. It's now basically "for the people"...everyone forgets they each have a responsibility too. Why should the government take care of us if we won't take care of ourselves first?

I'm going to go for a casual drive now! Pollute the air, waste resources, drive prices up and create a crisis. After all, the government will take care of me!

-J.M.

Send me your questions, comments and concerns at: jm@thinkingagain.com while you're at it, write your legislator, remind them they work for you!!

Copyright Disclaimer