Bent Corner

I was listening to CNN this morning and Donald Trump was on the phone saying that he supports John McCain for President. Not that I’m surprised. I’m sure that most mega-millionaires are supporting John McCain for President. After all, he wants to lower their taxes while Barack Obama wants to raise their taxes.

It turns out that not the reason The Donald is supporting McCain. Supposedly, it’s because he thinks McCain will go to OPEC and “make” them lower oil prices. He then offered up an analogy. He said that if he and somebody else owned similar stores and they got together and decided collectively how much to charge for certain items, they would end up in jail. The problem with that logic is that OPEC does not set the price of oil. They collectively decide how much oil they will produce.

Why doesn’t Donald Trump know this?

OPEC doesn’t set the price for oil. The world oil market does that. That’s one of the reasons allowing oil companies to drill off-shore wont effect the price of oil. OPEC would almost certainly decrease their oil production to match any increase in oil production here in the United States. The amount of available oil on the world market would remain the same. The oil companies would certainly make even more money then they make now, but the price we as consumers pay wont change.

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Gasoline is currently hovering at around $4 a gallon.  I heard a talking-head expert on CNN say that it may climb to $6 a gallon before the end of summer.  Normally I’d say he was just making it up, but he was wearing a tie and a tweed blazer. He obviously looked like he knew what he was talking about.

Why does gas cost so much?  The experts say that it’s because of the price of oil.  The price of a barrel of crude keeps rising to astronomical levels.  Oil futures climbed all they way up to $143 a barrel this past Friday.

One of the things I don’t understand about this whole process is why gasoline fluctuates, but motor oil doesn’t.  Gasoline isn’t the only thing derived from crude oil.  Motor oil comes from crude too.  It costs around $25 bucks to have my car’s oil changed at one of the national chains.  That’s what I was paying ten years ago.  Why has the price of an oil change not risen at the same exponential rate that gasoline has?

With gas at $4 a gallon, why doesn’t it cost $80 for an oil change?  All things being equal, you would think that it would.

Not that this was news to me. Of course it was about the oil. It was always about the oil. This from The Sunday Times (UK):

AMERICA’s elder statesman of finance, Alan Greenspan, has shaken the White House by declaring that the prime motive for the war in Iraq was oil.

In his long-awaited memoir, to be published tomorrow, Greenspan, a Republican whose 18-year tenure as head of the US Federal Reserve was widely admired, will also deliver a stinging critique of President George W Bush’s economic policies.

However, it is his view on the motive for the 2003 Iraq invasion that is likely to provoke the most controversy. “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil,” he says.

Greenspan, 81, is understood to believe that Saddam Hussein posed a threat to the security of oil supplies in the Middle East.

Britain and America have always insisted the war had nothing to do with oil. Bush said the aim was to disarm Iraq of weapons of mass destruction and end Saddam’s support for terrorism.

Not only was the invasion about the oil, but the continued occupation of Iraq is about making money for Halliburton and KBR. Money from the U.S. taxpayer. Where are all of the fiscal conservatives when you need them?

A recent congressional analysis shows the Iraq war is now costing almost $2 billion a week. It might be different if we were actually getting something of value for our money. The middle-east is more unstable then before. There are more Islamic fundamentalist terrorists now then there was before Bush invaded Iraq. One of the goals in The War On Terror™ should be to make the number of terrorists go down, not go up.

I’m old enough to remember when being a Republican was all about fiscal responsibility. That seems like a long time ago.

This is just ridiculous:

NEW YORK (AP) - Exxon Mobil Corp. on Thursday said its profit rose to $10.49 billion in the third quarter, making it the second-largest quarterly profit ever recorded by a publicly traded U.S. company. The world’s biggest oil company said its net income amounted to $1.77 per share for the July-September period, up from $9.92 billion, or $1.58 per share, a year ago. The results surpassed the expectations of Wall Street analysts. On average, analysts expected the company to earn $1.59 per share in the quarter. Revenue fell to $99.59 billion from $100.72 billion from a year ago, which saw then-record oil prices because of hurricanes Katrina and Rita. The largest quarterly profit ever was Exxon’s $10.71 billion profit in the fourth quarter of 2005.

I think what bothers me the most about a company like Exxon Mobil making so much money is that they really didn’t do anything to earn it. They didn’t do anything to deserve it. They just drill, pump, haul, process, distribute, and then sell something they happen to control. Something we all need. Something we have no real choice whether we will use or not.

It’s not like they cured cancer or figured out a way to make fat free mayonnaise taste good.

Exxon Mobil hasn’t created anything. They didn’t invent some innovative product or technology. They are being rewarded with record profits because they control the oil. The oil we all need as an energy source. The gasoline we need for our vehicles comes from oil. Most of our electricity is generated from power plants powered by natural gas.

Exxon Mobil didn’t invent oil. They don’t create it. It’s natural resource from planet Earth. They only control it.