Obama's War On Prosperity (Part One)

It's no secret that Obama wants to lower the level of prosperity in the country.  He knows that you cannot lift the bottom income earners up, so he wants to bring the top down.  From universal healthcare to higher taxes on the super earners to higher prices at the gas pump, Obama has consistently tried to find ways to "spread the wealth' as he famously said during his campaign.  This past week, in response to rising gas prices and growing noise about needing more drilling, Obama pulled out a chart that shows the percent of oil imported fell below 50% in 2011, the implication being that he's done something to encourage that trend.  He also said that we cannot drill our way out of the current gas price spike.  He's wrong on both accounts, but probably not for the reasons he would like us to believe.

Drilling now will not help the current gas prices, this much is true.  We needed to be drilling two, three years ago to have enough production today to effect a price reduction, and Obama has already made his stance on drilling clear.  The current spike in prices is due primarily to unrest in the middle east, which Obama has steadfastly encouraged.  Whether it was by NOT supporting the popular rebellion in Iran after their elections, allowing hard line Islamists to remain in power, or supporting chaos in Egypt, Libya, and elsewhere, thereby letting hard line Islamists like the Muslim Brotherhood gain a toe-hold, Obama's foreign policy has helped keep oil prices at record highs despite reduced demand resulting from the recession.  Even without new permits (more on that later) US oil production is slated to increase by 2 million barrels per day. This is primarily due to the 10-year permits issued by the Bush administration for drilling on federal lands (which makes me wonder - why doesn't Obama publicize his 'inheritance' of increased oil production?).  If we can get approval to complete the Keystone pipeline, that will add another 1 million barrels per day from Canada.  Combined, these 3 million barrels per day would allow us to stop imports from Saudi Arabia, Venezuela, Ecuador, Russia and Algeria, thus removing much of the uncertainty about our sources of oil, and hence the ability of speculation to drive the price.

To that end, according to Peter Morici, former chief economist at the US International Trade Commission, the oil produced domestically is $17 per barrel less than oil produced elsewhere.  This indicates that the North American oil market is detaching from the global market, and increased drilling coupled with the completion of the Keystone pipeline will have a significant impact on gas prices.  This can point to only onbe conclusion:

Gas Prices Are Purposely Being Driven Up

It's interesting that we have an incumbent president who cares so little about re-election that he's purposely driving gas prices higher, but there it is. Every time you pay more at the pump, it's because Obama wants you to. Four years ago, Democrats in Congress were livid about gas prices, demanding that George Bush do something about it. Today, they keep repeating the canard that the President can't affect prices, but as we reviewed above, Obama has taken direct action (or inaction, depending) to destabilize the middle east, has directly stopped drilling, and though he says he has lifted the moratorium on drilling, the issuance of permits is down 57% from before the moratorium.  When the Bush admin's 10 year permits expire, domestic production will plummet.

But perhaps most damning is this quote: "Somehow we have to figure out how to boost the price of gasoline to the levels in Europe." This was from Stephen Chu in 2008. It's an important quote, because in January 2009, Chu became Obama's Secretary of Energy. So not only is Obama's 'diplomacy' driving up gas prices, his guy behind the scenes has been overtly rooting for higher gas prices for the last four years, and since this summer is looking to be a record setter in terms price levels, it looks like he is going to get his wish.

To help in this gouging of the American public, Chu is calling for an end to more than $10 billion in oil company subsidies, while pumping more and more money into alternative energy companies like Solyndra, which then frequently go bankrupt.  He's also pushing vehicles like the Chevy Volt (with a $7500 per car government subsidy) despite the fact that there is no demand for the product (as evidenced by GMs recent furlough of 1300 workers while they idle the Volt's production line due to lackluster sales).  It seems that even when engaged in meddling with the market and picking winners and losers, the government's winners ARE losers.

Chu's methods are necessary to get a market for alternative fuels off of the ground.  The only way to make alternatives fuels and AF vehicles attractive is to make, well, all the decisions this administration has been making.  Encouraging unrest in the middle east, saying 'no' to the Keystone pipeline, placing moratoriums on drilling (not approving permits when the moratoriums have been lifted is really the same as having a moratorium), and enforcing year long reviews of any energy projects on federal lands; every step of the way, there's more red tape, there's more delay, and there's more cost.  Obama wasn't lying years ago when he said "under my energy plan, costs would necessarily skyrocket."

What is the solution?  I'll get into this in part 2 tomorrow!