Can an Election Year Forge a True Bi-Partisan Compromise

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sackman86	Can an Election Year Forge a True Bi-Partisan Compromise		Lead	[-]
Posts: 492 07/17/08 12:35 PM	Reading with interest about efforts to forge a compromise on energy issues. Efforts are being made to forge a compromise bill that would allow additional drilling in the OCS but would also attempt to regulate and dampen excessive speculation in the oil markets. Now, most dems. are against offshore drilling and don't think it will really help. Most repubs. think that speculation has little to do with oil prices, that this is purely driven by supply/demand. This thread is not meant to rehash these issues or positions. It is designed to discuss whether BOTH parties can act like grown ups, recognize that compromise will be necessary to get anything done here and to reach a true compromise, where neither side is truly happy, but the American people benefit from a legitimate effort to address these issues in a substantive way. Normally, I would say fat chance. But we are in a hotly contested election year and it seems to me that both parties have an interest in being able to say they attacked this issue in a bi-partisan way. So what do people here say. Does this get done? And if so, do we simply get a weak bill that doesn't accomplish the objectives of either side?
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NumenLumen		#1	[url]	[-]
Posts: 1993 07/17/08 12:46 PM "Most men are pigs, but I think in a much more subtle way than we're given credit for."	This possibility has crossed my mind. It may be that it's less about "acting like grownups" and more about the Dems wanting to take a potentially very negative issue for them off the table. The exact folks that Obama was having trouble "reaching" in the primary are the ones most pinched by high energy prices. Personally, I hope something does get done regarding domestic oil production before the election, because regardless of the result (even if there is a party switch in either or both houses....seemingly unlikely) I don't think it will get done afterward for all of the usual reasons. Speaking from my perspective, I am not at all thrilled at the potential intrusion into the market some of the "anti-speculation" measures would take, but I wouldn't get exercised over them being traded for the potential of opening up greater domestic oil and gas production. I think the Dems have to weigh the relative powers of the environmentists against the labor element of their coalition who are really pinched by high energy costs and would potentially benefit from jobs being created in the industry.
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Ol Badger		#2	[url]	[-]
Posts: 3803 07/17/08 1:16 PM Inside the Beltway	It is designed to discuss whether BOTH parties can act like grown ups, recognize that compromise will be necessary to get anything done here and to reach a true compromise, where neither side is truly happy, but the American people benefit from a legitimate effort to address these issues in a substantive way. This begs the question of what's meant by "the American people benefit from a legitimate effort to address these issues in a substantive way." Which people would benefit? Who would lose? How do we evaluate the equities of winners and losers? If the parties "compromise" on energy policy, does that automatically mean the result is "good"? Doesn't the actual substance of the compromise count for something? For example, in 1820 and again in 1850 the slavery and anti-slavery forces reached a compromise, but would we argue today that those compromises were beneficial to the American people? I guess I'm always a bit surprised that so many people equate "compromise" with "good policy". They're not equivalent terms. In fact, sometimes the best policy outcome is doing nothing at all. In this case, we almost certainly don't have the luxury of doing nothing, of course, but offshore drilling is simply a palliative; we know for certain that it will not solve the long-term problem--at most it might buy us a few more years. And going after speculators is mostly theater, a bit of symbolic politics to soothe the angry masses and disguise the fact that the real result will be oil derricks along the East and West Coasts. So what's the benefit derived from the compromise? It seems to me that on big policy issues it makes more sense to have a vigorous debate, one that claifies the underlying values and equities rather than obscuring them. For example, not that I am endorsing his proposals, but at least Al Gore is being provocative: Former Vice President Al Gore said on Thursday that Americans must abandon fossil fuels within a decade and rely on the sun, the winds and other environmentally friendly sources of electric power, or risk losing their national security as well as their creature comforts...Mr. Gore called for the kind of concerted national effort that enabled Americans to walk on the moon 39 years ago this month, just eight years after President John F. Kennedy famously embraced that goal. He said the goal of producing all of the nation's electricity from "renewable energy and truly clean, carbon-free sources" within 10 years is not some farfetched vision, although he said it would require fundamental changes in political thinking and personal expectations. http://www.nytimes.com/2008/07/18/us/politics/18gorecnd.html?hp=&adxnnl=1&adxnnlx=1216317786-Rilmk9RoXg4/6ptYurXp3Q That kind of thinking would produce a huge political fight, but also a substantive debate that might be a lot more useful than a compromise that simply puts off the problem until another day. Compromise is where you get after the debate, it's not the starting point, whether the issue is energy, taxes, social legislation, foreign/defense policy, whatever. These ARE the good old days!
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DCBadger7		#3	[url]	[-]
Posts: 1924 07/17/08 2:30 PM Recovering Political Hack	From a purely political and campaign point of view, I wouldn't be surprised to see the DEMs get behind this type of compromise. Whether it happens will come down to a calculation by the DEM leadership and the Obama campaign: are they better off keeping the offshore drilling issue as viable election-year, campaign trail issue? Or are they better off taking it off the table now? Were I them, I'd be awfully tempted to go with the latter as I can swallow the offshore drilling pill in the knowledge that if Obama wins, his administration to effectively block any drilling through bureaucratic means (foot dragging on permitting). Even if Obama doesn't win, there still are other avenues I can pursue to slow or block the move offshore.
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sackman86		#4	[url]	[-]
Posts: 493 07/17/08 2:35 PM	OB, I agree and disagree with your post. You ignored my last point, which is the question of whether we end up with a compromise that is so watered down as to be meaningless. I agree with you that compromise, for compromise sake is not a good thing. On the merits, we have disagreement. After having read a great deal, listened to congressional hearings and spoken with multiple friends in the investment industry, I think that both sides actually may have some merit here. Yes, some offshore drilling may only be a short term band-aid, but it may have some benefit, at least with respect to perceptions and affecting the "perception" of a possibly increasing supply. Though I am generally against this, like NUmen, I am willing to compromise if we can identify areas out far enough as to not visually impact some of our most valuable coastline. I very much disagree with you on speculation. I do think this has had a meaningful role. I also recognize the complexity of this and am clear now that no expert knows with certainty what will happen if loopholes are closed and margin requirements greatly increased. In my opinion, the upside greatly outweighs the downside. One thing that is clear is that minor perceptions can cause a significant swing in price. Thus, if investors and others see that supply may ultimately increase and speculation may be reduced, folks holding contracts may be more inclined to sell for fear of a precipitous drop. I already think there is a bit of this going in the last 2.5 days. If this legislation furthers the perception, than that in and of itself may change the dynamics. If anything, I think Gore's plan is far more idealistic. Come back here and claim your steak dinner from me in 10 years if we have abandoned fossil fuels. I like the notion and we should be begin in investing in making the change, but this is a vague, pie in the sky proposal. The energy legislation can truly have a shorter term meaningful impact for consumers in a very difficult economic time.
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blockski		#5	[url]	[-]
Posts: 1129 07/17/08 3:04 PM	sackman86 wrote: OB, I agree and disagree with your post. You ignored my last point, which is the question of whether we end up with a compromise that is so watered down as to be meaningless. I agree with you that compromise, for compromise sake is not a good thing. On the merits, we have disagreement. After having read a great deal, listened to congressional hearings and spoken with multiple friends in the investment industry, I think that both sides actually may have some merit here. Yes, some offshore drilling may only be a short term band-aid, but it may have some benefit, at least with respect to perceptions and affecting the "perception" of a possibly increasing supply. Though I am generally against this, like NUmen, I am willing to compromise if we can identify areas out far enough as to not visually impact some of our most valuable coastline. I very much disagree with you on speculation. I do think this has had a meaningful role. I also recognize the complexity of this and am clear now that no expert knows with certainty what will happen if loopholes are closed and margin requirements greatly increased. In my opinion, the upside greatly outweighs the downside. One thing that is clear is that minor perceptions can cause a significant swing in price. Thus, if investors and others see that supply may ultimately increase and speculation may be reduced, folks holding contracts may be more inclined to sell for fear of a precipitous drop. I already think there is a bit of this going in the last 2.5 days. If this legislation furthers the perception, than that in and of itself may change the dynamics. If anything, I think Gore's plan is far more idealistic. Come back here and claim your steak dinner from me in 10 years if we have abandoned fossil fuels. I like the notion and we should be begin in investing in making the change, but this is a vague, pie in the sky proposal. The energy legislation can truly have a shorter term meaningful impact for consumers in a very difficult economic time. Sack, the notions that we a) need to transition away from oil and b) need to decrease the price of oil are diametrically opposed. High prices are the best thing to possibly happen, as they've now alerted us that there's a problem. That's the problem with all of the politicians. No one has said the politically unpopular thing that is most likely the hard truth. Prices are, and will be, high. And high prices are exactly what we need to force a change.
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Ol Badger		#6	[url]	[-]
Posts: 3805 07/17/08 3:25 PM Inside the Beltway	blockski wrote: That's the problem with all of the politicians. No one has said the politically unpopular thing that is most likely the hard truth. Prices are, and will be, high. And high prices are exactly what we need to force a change. Well, let's not be too hard on politicians. After all, it's easy to say that high gasoline prices are the best incentive to move away from dependence on oil (foreign or domestic), but for millions of people there are some real financial hardships in that kind of transition. Among those hurting most are low-income people who tend to own older (and therefore generally less fuel-efficient) cars, especially those with long commute times to work. For some people the tradeoffs between gasoline and rent, food, health care, and clothing--the basics. Even for the broad swath of middle-income people current gasoline problems are causing some big financial strains. And it's not as if they can just dump their suburban houses on the market, pull their kids out of school, move into urban high-rises, and find jobs closer to their new homes next week. Heck, the vast majority of Americans can't even hop on public transportation and leave the car at home. As Uncle Joe Stalin used to say, to make an omlette you had to crack some eggs; but very few people volunteer to be the eggs. These ARE the good old days!
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Ol Badger		#7	[url]	[-]
Posts: 3806 07/17/08 3:53 PM Inside the Beltway	sackman86 wrote: Yes, some offshore drilling may only be a short term band-aid, but it may have some benefit, at least with respect to perceptions and affecting the "perception" of a possibly increasing supply...I very much disagree with you on speculation. I do think this has had a meaningful role. I also recognize the complexity of this and am clear now that no expert knows with certainty what will happen if loopholes are closed and margin requirements greatly increased. In my opinion, the upside greatly outweighs the downside. Well, I wasn't trying to get into the merits. Rather, I was responding to the implicit idea that compromise is a good thing, a theme that appears often on this board, but that the political scientist in me finds off the mark. There was a nice statement of this in a WP book review the other day: In laying out this case, [Jeffrey] Sachs makes a significant contribution to a peculiar genre of nonfiction: the Great Global Scheme. Economists ranging from Hernando de Soto to Joseph Stiglitz have written in this genre, in which (typically) a great economist diagnoses the world's ills, then proposes sweeping policies to cure them. Political scientists often read the prescriptions with amusement because the author almost always relies on the "political will" of leaders. Indeed, by Page 11, Sachs has already declared, "We don't need to break the bank, we only need common goodwill." This is a polite way of hoping that powerful politicians will ignore powerful political incentives. http://www.washingtonpost.com/wp-dyn/content/article/2008/07/16/AR2008071602453.html All public policy decisions create winners and losers in the real world, and in a democracy politicians can't just ignore those impacts. It's almost never obvious what the "best" solution to a particular policy issue is, so members of Congress do what any of us does in our own lives: they respond to the incentives (votes, power relations within Congress, external lobbying, etc.), filter those through their own personal value systems (for good or ill), and muddle through. As to the substance, your view on drilling seems to be at war with itself. You seem to be saying that even if we can't greatly increase supply--certainly not in the short- to medium-term--by drilling offshore, somehow investors will be hoodwinked into perceiving that supply will increase a lot and therefore will push down the price. Are these the same investors who are manipulating the price now? And btw, I agree that there likely is price manipulation at play. I was pilloried on this board for saying that Gray Davis probably was right a few years ago when he argued that electricity prices in CA were being manipulated; Davis lost his governorship, but when the feds got their hands on the inside Enron material they found that he had been right all along. My point, however, was that whatever Congress might do about price manipulation would be at the margins; the long-term cost of oil is going up unless someone finds a huge new pool of the stuff that no one knows about today or consumers figure out how to use a lot less of it. The policy questions for me revolve around how we are going to deal with the transition from an economy that assumes cheap oil to one that assumes expensive oil, including how we're going to make sure that the most vulnerable are not crushed during the omlette-making. Those issues are bound to be contentious. These ARE the good old days!
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blockski		#8	[url]	[-]
Posts: 1130 07/17/08 3:58 PM	Ol Badger wrote: blockski wrote: That's the problem with all of the politicians. No one has said the politically unpopular thing that is most likely the hard truth. Prices are, and will be, high. And high prices are exactly what we need to force a change. Well, let's not be too hard on politicians. After all, it's easy to say that high gasoline prices are the best incentive to move away from dependence on oil (foreign or domestic), but for millions of people there are some real financial hardships in that kind of transition. Among those hurting most are low-income people who tend to own older (and therefore generally less fuel-efficient) cars, especially those with long commute times to work. For some people the tradeoffs between gasoline and rent, food, health care, and clothing--the basics. Even for the broad swath of middle-income people current gasoline problems are causing some big financial strains. And it's not as if they can just dump their suburban houses on the market, pull their kids out of school, move into urban high-rises, and find jobs closer to their new homes next week. Heck, the vast majority of Americans can't even hop on public transportation and leave the car at home. As Uncle Joe Stalin used to say, to make an omlette you had to crack some eggs; but very few people volunteer to be the eggs. Oh, without a doubt, it's an unenviable position. Still, so far all the political rhetoric seems to be focused on finding a bad guy (oil executives! speculators!) or pushing some silver bullet 'solution' (drilling!). There's no doubt that we need to do something to deal with high fuel prices - however, the implicit assumption is that whatever that solution may be, the end result will be a lowering of prices. That's a bad assumption to make. The future is going to be a place where the prices are high, but they don't have as large of an impact on us because we have alternative sources, because we use less, because we've changed our land use patterns, etc. In short, the solution isn't going to be making oil cheap again, it's going to be putting in policies and programs that make it easier to deal with high prices.
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Ol Badger		#9	[url]	[-]
Posts: 3807 07/17/08 4:56 PM Inside the Beltway	blockski wrote: In short, the solution isn't going to be making oil cheap again, it's going to be putting in policies and programs that make it easier to deal with high prices. Yes. These ARE the good old days!
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DCBadger7		#10	[url]	[-]
Posts: 1925 07/17/08 6:55 PM Recovering Political Hack	Ol Badger wrote: blockski wrote: In short, the solution isn't going to be making oil cheap again, it's going to be putting in policies and programs that make it easier to deal with high prices. Yes. I would add the solution also involves insulating ourselves against the volatility of the world petroleum markets. Total insulation is obviously unrealistic, but we can certain do better than the status quo.
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badgerjon66		#11	[url]	[-]
Posts: 628 07/17/08 8:47 PM	Interesting tidbit about Cali. energy manipulation. I don't remember too many details, but i followed it a little at the time because I own a couple shares of Duke Energy, one of the providers attacked and accused by politicians at the time. I'm pretty sure they were completely cleared---after all the political finger-pointing died down---of any and all accusations (as usual, lots of press coverage of the accusations, none on the acquital). There was some less-than-ethical manipulating of prices by some (Enron, I think) but California politicians created the conditions which led to the problem. They wanted energy but NIMBY production and had set up some very strange market conditions for short term political reasons that led to sudden price increases. Anyone paying attention knew---long ago---that oil would not remain cheap forever. We all should probably have been more aware that increasing consumption in the rest of the world (China and India particularly) would put pressure on supply and increase the price, though few of us could anticipate the rapidity of the rise. Our government---for whatever good or bad reasons---has multiplied the effect over a relatively short time by limiting supply (Anwar, offshore drilling, etc.) and especially by devaluing the dollar. I recently read something about oil prices increasing fourfold in dollars but only double in Euros over a fairly short time period. Those on the left have long wanted much higher prices, but wanted to do it primarily via much higher taxes---which our wonderful congress would surely put to good use. Well, they now have what they wanted. Stalin did not mind cracking a few million eggs. He did not worry about getting volunteers, and he did not worry about elections. Let's see how the Dems craft policies and programs that take advantage of this---they have the control of congress to do pretty much whatever they want. (just a wild guess---higher taxes and more government control) I will agree that Gore is provocative. Hypocrisy is always provocative and he is personally making a bundle off the hysteria for which he is largely responsible. I'm still expecting him to move to a home as energy efficient as G. Bush's ranch house---someday.
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LamontS1		#12	[url]	[-]
Posts: 790 07/18/08 8:08 AM	Most people don't realize that curbing "speculation" won't necessarily bring down the oil price. The problem is not that there is too much speculation. The problem is that too many people are on the same side of the trade (long futures contracts). Simply reducing the number of players involved and the total amount of liquidity in a market isn't going to solve the problem of high prices. In fact, the more liquidity in a market the more fair the price and, conversely, the less liquidity in a market the more easily markets can be manipulated.
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sackman86		#13	[url]	[-]
Posts: 494 07/18/08 9:14 AM	The question, Lamont is can a compromise be forged. You don't believe in speculation an I don't believe in off-shore drilling as a meaningful solution. Thhis is pretty much where the two sides are. Can the two sides agree to put partisanship aside and forge and agreement that allows more drilling, but also attempts to reduce speculation. If putting measures to reduce speculation won't affect prices, why not allow it to be tried?
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NumenLumen		#14	[url]	[-]
Posts: 1998 07/18/08 9:54 AM "Most men are pigs, but I think in a much more subtle way than we're given credit for."	I agree with this, except to the extent that high energy prices are caused by our weak currency: "The future is going to be a place where the prices are high, but they don't have as large of an impact on us because we have alternative sources, because we use less, because we've changed our land use patterns, etc. " A reversal in the fall of the U.S. $ will cause oil and gas prices to fall. At what cost to other elements of the economy- hard to tell because the recipe for improving the greenback probably involves increasing interest rates. I disagree with this: "Sack, the notions that we a) need to transition away from oil and b) need to decrease the price of oil are diametrically opposed." Because I think you are a short- and mid-term issue with a long-term issue. Transitioning away from oil is a very long-term prospect. Dealing with the impact of oil prices on consumers in the short- and mid-term by taking measures that would likely reduce the /bbl cost of oil is important to consider now. The bottom line is that both things need to be done. Your comment on high prices signaling a problem is on the mark- that's what markets are meant to do, after all. Getting back to the initial notion of this thread, I think there is a level of agreement building that we have to approach this problem on many fronts. Conservation and letting the economy suck while we wait for as-yet-not-invented alternatives to take hold ain't going to cut it. Nor is sucking every drop of oil we know exists from every nook and cranny from sea to shining sea and beyond. It has just taken a "crisis" to drive public interest and will beyond the narrow solutions (or lack thereof) promoted by interest groups pulling strings on both sides of the aisle.
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Ol Badger		#15	[url]	[-]
Posts: 3814 07/18/08 10:54 AM Inside the Beltway	Curiously, today's WP juxtaposes a couple of related articles. First, Al Gore challenges the nation: Former vice president Al Gore yesterday called on Americans to convert all electricity generation to wind, solar and other renewable sources within 10 years and end their reliance on fossil fuels for the sake of the U.S. economy and the world's climate...He also called on automobile companies to make plug-in electric cars and advocated an overhaul of the national electricity grid "to link areas where the sun shines and the wind blows to the cities in the East and the West that need the electricity." http://www.washingtonpost.com/wp-dyn/content/article/2008/07/17/AR2008071700244.html Pie in the sky, right? And yet there's this small piece tucked inside the paper: AUSTIN, July 17 -- Texas, headquarters of America's oil industry, is about to stake a fortune on wind power. In what experts say is the biggest investment in the clean and renewable energy in U.S. history, utility officials gave preliminary approval Thursday to a $4.9 billion plan to build new transmission lines to carry wind-generated electricity from West Texas to urban areas such as Dallas. "People think about oil wells and football in Texas, but in 10 years, they'll look back and say this was a brilliant thing to do," said Patrick Woodson, vice president of E.On Climate & Renewables North America, which has about 1,200 megawatts of wind projects already in use or planned in Texas. Texas is the national leader in wind power, generating about 5,000 megawatts. But wind-energy advocates say the lack of transmission lines has kept a lot of that power from being put to use and has hindered the building of more turbines. Most of Texas's wind-energy production is in petroleum-producing West Texas, where nearly 4,000 wind turbines tower over oil pump jacks. The new plan would not build a slew of new turbines but would add transmission lines capable of moving about 18,000 megawatts. http://www.washingtonpost.com/wp-dyn/content/article/2008/07/17/AR2008071702549.html These ARE the good old days!
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LamontS1		#16	[url]	[-]
Posts: 791 07/18/08 10:56 AM	sackman86 wrote: The question, Lamont is can a compromise be forged. You don't believe in speculation an I don't believe in off-shore drilling as a meaningful solution. Thhis is pretty much where the two sides are. Can the two sides agree to put partisanship aside and forge and agreement that allows more drilling, but also attempts to reduce speculation. If putting measures to reduce speculation won't affect prices, why not allow it to be tried? If a compromise is necessary. However, the attempt to "reduce speculation" is simply a propaganda event, while drilling is a real longer term solution to a very serious energy, security, and balance-of-payments problem. Last Edited By: LamontS1 07/18/08 10:58 AM. Edited 1 time.
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LamontS1		#17	[url]	[-]
Posts: 792 07/18/08 11:13 AM	AUSTIN, July 17 -- Texas, headquarters of America's oil industry, is about to stake a fortune on wind power. In what experts say is the biggest investment in the clean and renewable energy in U.S. history, utility officials gave preliminary approval Thursday to a $4.9 billion plan to build new transmission lines to carry wind-generated electricity from West Texas to urban areas such as Dallas. "People think about oil wells and football in Texas, but in 10 years, they'll look back and say this was a brilliant thing to do," said Patrick Woodson, vice president of E.On Climate & Renewables North America, which has about 1,200 megawatts of wind projects already in use or planned in Texas. Texas is the national leader in wind power, generating about 5,000 megawatts. But wind-energy advocates say the lack of transmission lines has kept a lot of that power from being put to use and has hindered the building of more turbines. Most of Texas's wind-energy production is in petroleum-producing West Texas, where nearly 4,000 wind turbines tower over oil pump jacks. The new plan would not build a slew of new turbines but would add transmission lines capable of moving about 18,000 megawatts. A lot of the new investment dollars flowing into the huge new Texas windfarms is from T. Boone Pickens, the old oilman (everyone has probably seen his new windpower commercials). Also, the second biggest wind tower manufacturer in the US (I think they're second behind GE) is Broadwind Energy which operates their largest tower manufacturing facility in Manitowoc, WI -- they used to be called Tower Tech until last year -- and has the infamous hedge fund manager Jeffrey Gendell from Tontine Capital Partners as its largest invester. People can grumble and grumble about the lack of government rhetoric about wind, but they do that at the expense of ignoring the vast amount of investment dollars flowing into the industry from private sources, people that can take action instead of talk, talk, talk, complain, blame, talk, complain, blame and don't act.... Lamont by the way is invested in Broadwind and is thus helping to provide a real solution.
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blockski		#18	[url]	[-]
Posts: 1131 07/18/08 1:51 PM	NumenLumen wrote: I disagree with this: "Sack, the notions that we a) need to transition away from oil and b) need to decrease the price of oil are diametrically opposed." Because I think you are a short- and mid-term issue with a long-term issue. Transitioning away from oil is a very long-term prospect. Dealing with the impact of oil prices on consumers in the short- and mid-term by taking measures that would likely reduce the /bbl cost of oil is important to consider now. The bottom line is that both things need to be done. Your comment on high prices signaling a problem is on the mark- that's what markets are meant to do, after all. Getting back to the initial notion of this thread, I think there is a level of agreement building that we have to approach this problem on many fronts. Conservation and letting the economy suck while we wait for as-yet-not-invented alternatives to take hold ain't going to cut it. Nor is sucking every drop of oil we know exists from every nook and cranny from sea to shining sea and beyond. It has just taken a "crisis" to drive public interest and will beyond the narrow solutions (or lack thereof) promoted by interest groups pulling strings on both sides of the aisle. The comment about short and mid-term problems is fair. The issue I have, however, is that I don't see any solutions. Drilling is a mid-to-long term solution in terms of price. Going after 'speculators' isn't much of a solution at all, really - nor is going after oil executives. With that in mind, today's politicians are pushing longer timeframe ideas as quick fixes, when their ideas a) are unlikely to work, and b) aren't addressing the problem at hand. What's worse is that many of the short term solutions, besides being ineffective in the short term, actually hurt the long term goal. For example, McCain's gas tax holiday is a perfect example. If the long term goal involves higher gas prices, lowering them in the short term to ease the pain is contradictory. When you're compromising between those two options, the final result isn't a good policy. Compromise for the sake of compromise accomplishes little. My proposals wouldn't be politically palatable because they address demand, not supply. And the quickest short term solution is to reduce demand. That means driving less, carpooling, switching to mass transit, etc.
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NumenLumen		#19	[url]	[-]
Posts: 2008 07/18/08 2:27 PM "Most men are pigs, but I think in a much more subtle way than we're given credit for."	" Drilling is a mid-to-long term solution in terms of price." I don't think this is clear. Prices are not set just by the momentary balance of supply and demand at the time of a transaction, but also by expectations about the future conditions of these. The U.S. showing positive initiative to bring more oil production to the market (i.e. future supply) may cause prices to go down due to the expectation of increased oil supply in future. That said, even if the time frame is 5-10 years, you have to start some time. The supply of oil from these places would be flowing now had we acted 5-10 years ago. We are clearly not going to not have some reliance on oil, despite Al Gore's dreams, 5-10 years from now. "Going after 'speculators' isn't much of a solution at all, really - nor is going after oil executives. " Right about this. Part of the reason for speculation is that money goes where money is made. Equity, debt, and real estate markets all pretty much suck right now, so cash is flowing into commodities that wouldn't normally be there. Are we to tell people that they can't invest in something where they perceive a profit to be made (even if it has an element of the Onion article in it)? You had me on the gas tax holiday comment, which I think is a terrible idea except for my reflexive dislike of any taxes anywhere, (BTW, McCain was not the only proponent of this) until you said this: "If the long term goal involves higher gas prices". Whose long term "goal" involves higher gas prices? An acknowlegement that higher gas prices may be an ongoing reality is one thing, but a goal? I also agree that the quickest short term solution is to reduce demand- but the market is already making that happen in many quarters. The other element of gas prices is the currency effect. The weak dollar has a significant, if incremental impact on gas prices. I think after the election the Fed is going to need to tighten significantly. Doing so will possibly both slow the economy and increase the value of the dollar, both of whch could cause at-the-pump prices to drop. That said, the possible impacts of this action in other areas of the economy will cause hue and cry about things other than gas prices.
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DCBadger7		#20	[url]	[-]
Posts: 1936 07/18/08 2:43 PM Recovering Political Hack	To me, increasing our domestic supply of oil is only tangentially about price. More importantly, its about ensuring a more tranquil supply of oil so that we can reduce reliance on oil from more volatile places like Nigeria or Venezuela, etc. The more we insulate ourselves from more turbulent sources of oil, the better off we'll be in the long run from a security standpoint.
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