“Drill, Obama, Drill” Won’t Save You at the Gas Station

Republicans have a problem. The economy is improving…under President Obama’s watch.

And it is precisely because the economy is improving, both here and abroad, that gasoline prices are rising.

Because they can no longer blame him for slow growth or rising unemployment, Mitt Romney, Rick Santorum, and Newt Gingrich are now blaming the President for high gas prices, which is a little like blaming him for a strong economy, a charge he’d gladly plead guilty to.

So here’s my question for the candidates: If Democratic policies are responsible for oil that now costs $102/barrel, does that mean that Republican policies were responsible for oil that cost $145/barrel back in 2008?

In fact, George W. Bush oversaw the largest rise in oil prices in American history, from $20/barrel in 2001. And you know what? It wasn’t his fault either.

Demand is growing, and supply can’t keep up. Global production has been flat since 2005. No president can change that.

But you can’t say Barack Obama hasn’t tried.

President Obama has overseen the largest rise in drilling rigs in American history, from less than 200 in April 2009 to over 1,200 today. American oil production is the highest it’s been in eight years. We now import 15 percent less oil than we did in 2005. For the first time since 1949, the United States is a net exporter of gasoline, diesel, and other fuels.

There was a time, not too long ago, when none of this was true. Back then, during the last presidential campaign, we were told that “drill, baby, drill” was the answer to our woes.

Well, we’ve tested their theory. We’ve ramped up drilling exponentially. We’re living through a mini-boom in oil production. And gas prices keep rising.

The skeptics have been vindicated.

But old slogans die hard.

No amount of drilling can bring back the good old days. According to economist James Hamilton, “The 138 million barrels produced in North Dakota and Montana in 2010 is about half of what the state of Oklahoma produced in 1927 and a fifth of what the state of Alaska produced in 1988.”

Increasing production in new oil fields only replaces declining production elsewhere. That’s why American oil production has fallen from 10 million barrels per day in 1970 to 6 million today.

Even with new shale oil in North Dakota and further exploration in the Gulf of Mexico and Alaska, the International Energy Agency predicts we’ll never produce more than 6.7 million barrels per day. Even if the President opened the Outer Continental Shelf to exploration, the best we could expect is another 0.5 million barrels per day.

That may sound like a lot, but it’s a drop in the bucket on the world stage, where prices are set. If we opened every possible region to oil exploration, the Energy Information Administration estimates that gas prices would fall two cents per gallon.

But not until 2030.

Because drilling takes a long time.

That’s why, when the Washington Post fact-checkers tried to figure out how the Keystone XL pipeline might affect gas prices, they reported: “We could not find any experts…to say that the prospect of the pipeline being built in the future would somehow impact the price of gasoline today.”

Two cents per gallon, eighteen years from now. Is that what our environment is worth? Is that what the safety of our workforce is worth?

After the worst environmental disaster in American history.

After a record-setting fourteen billion-dollar weather disasters last year.

After the highest Arctic temperatures and the lowest Arctic sea ice volume on record.

After fourteen dangerous leaks at the first Keystone pipeline.

Can we not say we’ve been warned?

But the Republican candidates don’t care. If they really cared about rising gas prices, they wouldn’t be beating the war drums against Iran. Time and time again, conflict in the Middle East has inflated the price of oil.

Just ask George W. Bush. Okay, so maybe it was his fault after all.

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This op-ed was published in today’s South Florida Sun-Sentinel.

What Small Government Really Looks Like: Not a Pretty Picture!

Once upon a time, America had a small government.

Before World War I, government spending was less than 10 percent of the economy. During the Great Depression, it reached 20 percent. By 1960, it hit 30 percent. And so, for the past fifty years, one in every three dollars spent in America were spent by Uncle Sam.

In 2012, the Republican presidential candidates have staked their campaigns on a promise to reverse this trend. Many Republicans openly pine for the good old days of rugged individualism — the days before Social Security and Medicare, before the FDA and the EPA, before income taxes and government-backed mortgages.

You might think that such an extreme position belongs to rabble-rousers like Glenn Beck but not mainstream pragmatists like Mitt Romney. You’d be wrong.

Candidate Romney has proposed cutting taxes annually by $180 billion, mostly for the top 1 percent of income earners. At the same time, he has pledged to balance the budget without cutting defense spending. According to the Center on Budget and Policy Priorities, the only way to fulfill all these promises is to cut nondefense programs by 50 percent.

In other words, Romney wants to get rid of half of everything the government does, except Social Security and the military.

Half of our schools. Half of our national parks. Half of our federal law enforcement. Half of our food safety. Half of our clean air. Half of our veterans’ health care. Gone. Forever.

And Romney is no exception. If anything, his proposal is tame in comparison. Newt Gingrich’s proposal, for example, would cut taxes by $850 billion. You can just imagine the carnage.

In Tuesday night’s State of the Union address, President Obama staked out the opposite position, asking Congress to raise taxes slightly on millionaires and to use half the savings from ending the wars in Iraq and Afghanistan to reduce the budget deficit. The other half he pledged to public infrastructure projects.

And not a moment too soon.

Over the last fifty years, infrastructure spending has steadily fallen as a share of the economy. We now spend 2.4 percent of GDP on transport and water infrastructure, compared to 5 percent in Europe and 9 percent in China.

According to government reports, one in four bridges need significant repairs or are bearing more traffic than they were designed for. 700 water pipes burst every day because they’ve worn out. One in three roads are in substandard condition, increasing traffic fatalities, congestion, and gas emissions. 1,300 dams have been designated “high-hazard,” meaning they could fail and result in fatalities. We spend $50.6 billion every year just to clean up spills from old sewage systems.

In recent years, state and local governments, which contribute the vast majority of infrastructure spending, have shrunk significantly in the wake of unprecedented budget shortfalls. The federal government needs to step up, but the Republican candidates would rather scale down.

There will never be a better time to rebuild our infrastructure. Millions of Americans desperately need jobs. The government can borrow at near-zero interest rates.

We’ve been here before.

In 1935, with unemployment at 20 percent, the government created the Works Progress Administration. Over the next eight years, the WPA provided eight million jobs. It built or renovated 560,000 miles of roads, 20,000 miles of water pipes, 417 dams, 2,700 firehouses, 5,000 schools, 1,800 hospitals, 2,000 stadiums, 1,800 runways, and 6,000 fire and forest trails. By 1941, before the United States entered World War II, unemployment had fallen to 6 percent.

We can do it again.

Or we can go back to the nineteenth century. We can go back to a world without paved roads or bridges or clean water, with one-room schoolhouses spaced many miles apart and hospitals that took hours to reach. We can go back to the days when sewage was untreated and floods overwhelmed many towns, when recessions were more frequent and unemployment rose more sharply.

We can go back to small government, if we’re willing to give up our way of life.

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This op-ed was published in today’s South Florida Sun-Sentinel.

What to Read Before the Iowa Caucuses

For our Republican readers who live in Iowa, and for any non-Iowans who wants to know which candidate to root for, here’s a handy compilation of past Trading 8s posts:

What to Read on Jon Huntsman

What to Read on Michele Bachmann

What to Read on Mitt Romney

What to Read on Newt Gingrich

What to Read on Perry vs. Romney

What to Read on Rick Perry

What to Read on Rick Perry and the “Texas Miracle”

What to Read on Ron Paul

Don’t Blame the Fed for Holding Back the Recovery

Social Security Isn’t Lying to You. But Rick Perry Is.

Sigh. Yet Another Trojan Horse.

Why Jon Huntsman Is More Dangerous Than You Think

Courtesy of statistician Nate Silver, here’s a prediction that aggregates all the major polls:

And since the results of Iowa set up the next stage of the primary season in New Hampshire, here’s how that January 10 election is shaping up so far:

What to Read on Newt Gingrich

Gingrich Urges War with Iran and Skyrocketing Oil Prices — Juan Cole

Gingrich: “We need a strategy of defeating and replacing the current Iranian regime with minimum use of force. We need a strategy…of being honest about radical Islam and designing a strategy to defeat it…

“We need a strategy in central Asia that recognizes that, frankly, if you’re Pashtun, you don’t care whether you’re in Pakistan or Afghanistan, because you have the same tribal relationships.

“But if we were serious, we could break the Iranian regime, I think, within a year, starting candidly with cutting off the gasoline supply to Iran, and then, frankly, sabotaging the only refinery they have.”

The new round of sanctions on Iran recently announced by the US, the UK and Canada have helped drive the price of Brent crude over $100 a barrel…

Oil supplies are tight, and if the US and Israel really could succeed in taking the 2.3 million barrels a day that Iran exports off the world market, on top of the Libyan reductions, it would likely put the price up to more like $200 a barrel (i.e. for Americans $6-$7 a gallon for gasoline).

The US…cannot hope to both replace Iranian production and meet increasing Asian demand with any known “all-energy” policy in the short to medium term. That is a science fiction scenario.

Iran has more than one refinery. The US doesn’t have the assets in Iran to conduct such extensive and massive “sabotage.” And, Iran could “sabotage” things right back. If he means bombing Iranian refineries from the air, that would be an act of war.

There are no [Pashtuns] in Iran or Central Asia, and Gingrich’s bizarre comments on Islam and Central Asia have nothing to do with Iran or its gasoline and petroleum production. Most post-Soviet Muslims in Central Asia are Tajiks or Turkic and are relatively secular.

As far as I can tell, Gingrich wants war with the whole Muslim world.

Newt’s War on Poor Children — Charles M. Blow

Nearly two weeks after claiming that child labor laws are “truly stupid” and implying that poor children should be put to work as janitors in their schools, he now claims…, “Really poor children in really poor neighborhoods have no habits of working and have nobody around them who works. So they literally have no habit of showing up on Monday. They have no habit of staying all day. They have no habit of ‘I do this and you give me cash’ unless it’s illegal.”

[But, the fact is,] three out of four poor working-aged adults — ages 18 to 64 — work.

[Most] poor children live in a household where at least one parent is employed. And even among children who live in extreme poverty…a third have at least one working parent. And even among extremely poor children who live in extremely poor areas…nearly a third live with at least one working parent.

[Even] as more Americans have fallen into poverty in recent years, the crime rate over all — and, specifically, among juveniles — has dropped.

Gingrich Culls War Hawks for His National Security Team — Ali Gharib

Gingrich announced his national security team…:

  • David Wurmser: In 2007, a U.N. official called Wurmser one of the “new crazies” who wanted to attack Iran. In 1996, Wurmser co-authored a paper…advocating the removal of Saddam Hussein from power.
  • Ilan Berman: Berman…has advocated U.S.-led regime change in Iran… [He’s] also attempted to minimize negative effects of [a military] attack and, in 2005…, said Iran is a “prime candidate” for Iraq-style pre-emption…
  • James Woolsey: Woolsey advocated for the Iraq war, supports illegal Israeli West Bank settlement construction, and now pushes a confrontational stance on Iran. In 1998, Woolsey signed onto a…letter urging the military removal of Saddam Hussein…
  • Robert “Bud” McFarlane: In 1988, McFarlane plead guilty to four counts of withholding information from Congress in the Iran-Contra scandal, in which he played a major role, even secretly travelling to Iran in the early arms-for-hostages part of the affair.

Fact Checking the Tea Party Debate: Republicans Stumble on Tax Issues — Citizens for Tax Justice

Gingrich [said] that he is “cheerfully opposed” to raising taxes by closing the sorts of corporate loopholes that benefit GE and other corporations, while also conveniently leaving out that he actually works as an advisor to GE.

Gingrich and the Destruction of Congressional Expertise — Bruce Bartlett

Gingrich said the [Congressional Budget Office] “is a reactionary socialist institution which does not believe in economic growth, does not believe in innovation and does not believe in data that it has not internally generated.”

Most policy analysts from both sides of the aisle would say the C.B.O. is one of the very few analytical institutions left in government that one can trust implicitly.

Gingrich said, “If you are serious about real health reform, you must abolish the Congressional Budget Office because it lies.”

Gingrich did everything in his power to dismantle Congressional institutions that employed people with the knowledge, training and experience to know a harebrained idea when they saw it. When he became speaker in 1995, Mr. Gingrich moved quickly to slash the budgets and staff of the House committees, which employed thousands of professionals with long and deep institutional memories.

In addition to decimating committee budgets, he also abolished two really useful Congressional agencies, the Office of Technology Assessment and the Advisory Commission on Intergovernmental Relations. The former brought high-level scientific expertise to bear on legislative issues and the latter gave state and local governments an important voice in Congressional deliberations.

The amount of money involved was trivial even in terms of Congress’s budget. Mr. Gingrich’s real purpose was to centralize power in the speaker’s office, which was staffed with young right-wing zealots who followed his orders without question.

Sorry, Newt. You Never Balanced the Budget — Robert S. McIntyre

In fact, the budget surpluses that we enjoyed from 1998 to 2001 had nothing to do with [Gingrich’s] balanced budget act. Instead, the surpluses stemmed from a dramatic surge in federal revenues, mainly personal income taxes.

In 1993, Bill Clinton undid some of the Reagan tax cuts for the wealthy, in a bill that every Republican in Congress opposed. In the years that followed, federal revenues shot up. By 1996, the deficit had fallen by more than half from its 1993 level.

In 1998 tax revenues continued to soar… That was enough to produce a $64 billion budget surplus. …this had nothing to do with the ’97 budget act, which, because of its tax cuts, actually reduced the 1998 surplus slightly.

How Newt Gingrich Added $16 Trillion to the National Debt — Bruce Bartlett

According to the latest Medicare trustees report, the unfunded liability of Medicare Part D is $16.1 trillion.

[Just before Congress voted on Medicare Part D], Newt Gingrich [wrote in the] Wall Street Journal: “Every conservative member of Congress should vote for this Medicare bill. […] If you are a fiscal conservative who cares about balancing the federal budget, there may be no more important vote in your career than one in support of this bill.”

The Republican Candidates’ History on Mandates — Sarah Kliff

Newt Gingrich has repeatedly supported the mandated purchase of health insurance… “I agree that all of us have a responsibility to help pay for health care,” he told “Meet the Press” earlier this year.

Newt Gingrich’s Doctoral Dissertation — Robert Paul Wolff

“Belgian Education Policy in the Congo: 1945-1960 A Dissertation Submitted on the Sixth Day of May, 1971 to the Department of History of the Graduate School of Tulane University in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy by Newton Leroy Gingrich.”

There is no evidence in the text that he traveled either to Belgium or to the Congo, and he seems not to have interviewed any of the principal actors, Belgian or Congolese, even though the dissertation was written only a handful of years after the departure of the Belgians from the Congo.

Colonization is seen almost entirely from the perspective of the colonial power, not from that of the indigenous population. The rule of King Leopold II, who literally owned the colony as his private property until, at his death, he willed it to Belgium, is widely understood to have been the most horrifyingly brutal colonial regime in Africa. Gingrich acknowledges this fact once in the dissertation.

There’s Gotta Be Something Better Than This

by Norman Horowitz

There’s gotta be something better than this,
There’s gotta be something better to do.
And when I find me something better to do,
I’m gonna get up, I’m gonna get out.
I’m gonna get up, get out, and do it!
There’s gotta be some respectable trade;
there’s gotta be something easy to learn.
And if I find me something I halfwit can learn,
I’m gonna get up, I’m gonna get out.
I’m gonna get up, get out and learn it!

Sweet Charity

Corporate management. Congress. Presidential candidates. There’s gotta be something better than this.

I grew up in a middle-class Jewish environment naively believing that the world was an orderly place run by those who knew what they were doing and that there would be peace and prosperity for all because we were led by brilliant people.   Continue reading “There’s Gotta Be Something Better Than This”