Gasoline and Government
Posted 8/3/08 ( by Travis)
8/2/08 Cafe Hayek
Here's a letter that I sent to the Aurora (Illinois) Beacon News:
Barack Obama proposes to deal with rising gasoline prices by giving a $1,000 "emergency rebate" to consumers - a rebate to be paid for by taxing the so-called "windfall profits" of oil producers ("Obama pitches $1,000 energy rebate checks," August 2).
In other words, a critical part of Sen. Obama's strategy for reigning in high gasoline prices is to subsidize gasoline consumption and more heavily tax its production. This plan - which increases the demand for gasoline and reduces its supply - makes as much sense as trying to put out a fire by dowsing it with jet fuel.
Sincerely,
Donald J. Boudreaux
Posted 7/11/08 ( by Travis)
Airline
CEOs Beg Customers To Push Congress On Speculation
CNN
money ^ | 7-9-08 | CNN
The airlines blame much of the high fuel costs on "excessive" speculation in the market.
This is a surprising story as one would expect corporate America to be versed in basic economic sense. It either shows the sorry state of airline leadership, or else pandering to customers explanations which the CEOs must know are not true. It is government, not speculators, which is directly to blame for higher oil prices, more specifically it is government control over oil companies and reserves, private oil companies only hold 10% of the world's reserves. And, there are the mentioned taxes, miles and miles of regulations etc... To blame speculators is beyond foolish.
Posted 3/21/08 ( by Travis)
ETHANOL
MADNESS (2006)
Executive
Intelligence Review (excerpt) from Technocracy.org ^ | 06/02/2006 | Staff
Well, first, we'll get 20% less gas mileage from our fuel
that way. Second, we can pay a good deal more for fuel, in direct prices and subsidies; in fact,
we'll be able to use a fuel whose price is inflating much faster than the price of gasoline. Third,
we'll be able to spend tens of billions of dollars more a year in tax revenues, subsidizing ethanol
makers, including some of the biggest global cartels. Fourth, we can use up more petrochemical
energy making ethanol than we get by using it. Fifth, we can use up large volumes of scarce regions
of the country, and overburden our transport infrastructure as well. Sixth, we could soon deny corn
exports to nations that need them — maybe even cut our own consumption of corn and burn it in our
cars instead...
And last but not least, we can delay or cut off the revival of nuclear power for industry and economic expansion; instead, we could take a major scientific and technological step backwards, a great leap back toward primitive ages when mankind burned straw for fuel.
Is this not similar to the previously posted story on how Hydrogen cars pollute more (plus are more expensive) than regular gas cars?
7/17/07 Waterbury Republican-American Editorial
Posted 7/24/07 (By Travis)
Venezuela's energy minister says state oil company struggling with 'operational emergency'
7/24/07 International Herald Tribune
The Paris-based International Energy Agency, which collects and analyzes statistics related to the international oil market, calculates that oil output in Venezuela — a major supplier of crude to the United States — has fallen to 2.37 million barrels a day, down from 2.6 million barrels a day a year ago.
Venezuela claims to be producing more than 3 million barrels a day. "We hope to reach 3.2 million barrels by the end of the year," Ramirez said.
Who are we to believe? Lol, of course I'm being sarcastic; this is no different than the USSR claiming double digit economic growth despite retractions, the Chinese under Mao claimed record production levels even as millions starved, and the Cuban literacy and infant mortality rates today (the later country's statistics are even enshrined in the UN and taken at face value by many academics and even ordinary Americans).
The state will lie and deceive even itself.
The truth is that the thieving Venezuelans, having looted the foreign oil companies, are now staggering under bureaucracy, stifled by broken feedback loops rooted in economic reality, and strangled by trumpeting political considerations.
Posted 7/18/07 (By Travis)
7/17/07 Waterbury Republican-American Editorial
Reprinted in full:
Sometimes, when a patient has an imaginary illness, the doctor will prescribe harmless pills called placebos. Somehow, they work: The patient thinks the illness is being treated, and the symptoms diminish or go away.
In 2005, California took a $17 million placebo for global warming. Specifically, the state bought a fleet of 1,138 Chevrolet Impalas and Silverado trucks designed to run on E-85, a blend of 85 percent ethanol and 15 percent gasoline.
Trouble is, California has no filling stations that sell E-85. No such stations were scheduled to open until 2009. In the interim, according to the San Jose Mercury News, the "flex-fuel" vehicles traveled a collective 10 million miles and burned more than 413,202 gallons of ordinary gasoline.
It gets even sillier. The Impalas replaced smaller, more fuel-efficient Ford Focuses so that, in the words of the Mercury News, "the flex-fuel vehicles are actually chugging out more smog and greenhouse gases than many vehicles in the state's old fleet as much as 2,000 tons annually."
On orders from Gov. Arnold Schwarzenegger, the state's General Services Department has called for bids to open an ethanol station a few blocks from the state capitol. However, the corn needed for California refineries to make ethanol has to be hauled in from the Midwest, most of it on diesel-powered trains or trucks, further negating any clean-air benefit.
Said Severin Borenstein, director of the University of California Energy Institute: "This is about California politicians wanting to be leaders in alternative energy. They just jump on whatever is sexy."
Thus, there is a bright side to California's E-85 vehicle mess. Even if the state overpaid for the vehicles by 10 percent, and even if the vehicles were 10 percent less fuel efficient, the total cost to the state probably wasn't much more than $5 million. As bogus remedies for imaginary maladies go, California is getting off cheaply.
Senators Not Serious on Ethanol
7/20/07 Three Legged Stool
A couple of days ago, the Club for Growth blog mentioned that the Senate had rejected an amendment to eliminate the 54 cent tariff on imported Ethanol. This strikes me as completely disingenuous at a time when the same Senators are concerned about price gouging for gasoline. Just for fun I used Google Maps to create this map showing how the Senators from each state voted. Now we have a visual representation of where the real price gougers live!
You will notice the votes cut across party lines and are more regional; a pretty cool map!
Posted 6/13/07 (By Travis)
Driver Ticketed For Using Biofuel
6/11/07 Charlotte Observer
Bob Teixeira decided it was time to take a stand against U.S. dependence on foreign oil.
So last fall the Charlotte musician and guitar instructor spent $1,200 to convert his 1981 diesel Mercedes to run on vegetable oil. He bought soybean oil in 5-gallon jugs at Costco, spending about 30 percent more than diesel would cost.
His reward, from a state that heavily promotes alternative fuels: a $1,000 fine last month for not paying motor fuel taxes. He has been told to expect another $1,000 fine from the federal government.
To legally use veggie oil, state officials told him, he would have to first post a $2,500 bond. <.>
Teixeira's story began near Lowe's Motor Speedway on May 14. As recreational
vehicles streamed in for race week, revenue investigators were checking fuel tanks of diesel RVs for
illegal fuel. The investigators spotted Teixeira's passing bumper
sticker: "Powered by 100% vegetable oil."
This is similar to the story posted a few weeks ago. Speaking of which, some interesting developments have occurred in that story:
Veggie Oil Bill Cruises Through State House Committee
5/18/07 Herald & Review
Senate Bill 267 removes the requirements of licensing and posting bond for private users of vegetable oil. The measure was introduced by state Sen. Frank Watson, R-Greenville. The Senate passed it 58-0.
I wonder if someone could sell vegetable oil to another person. I'll bet this is a very narrow bill, which doesn't address the underlying problem of government regulation and interference in the gasoline and oil market.
During the hearing, Wetzel provoked laughter from the representatives on the Least Cost Power Procurement Committee, as he told of his interaction with the tax agency.
A bunch of jokers these state senators... Laughing at what their own policies do to the citizens of their state.
Posted 5/26/07 (By Travis)
Federal Gas Taxes Fund Seatbelt Roadblocks
More than $30 million in federal gas tax funding is being spent setting up roadblocks to ticket motorists who neglect or choose not to wear a seatbelt.
More than $30 million in federal gas tax dollars will be spent between now and June 3 to encourage local and state police to set up ticketing roadblocks under a program called "Click it or Ticket."
Given all the apparent angst over high gas prices, as well as the fact that somewhere around 5 times as much 'tax' is taken out of the price of gasoline as is 'profit', we need to wonder why there is no outcry over this program.
But, more disturbingly than this, more and more Federal money is being shuttled to states for all kinds of various programs. States are encouraged to socialize their healthcare; for example Massachusetts received millions in matching federal funds. This Cato Institute article documents more examples.
Of course, there is the humorous ending:
The ticketing program's kick-off met with a rough start when reporters filmed President George W. Bush driving his truck on his private property in Texas without a seatbelt.
Corzine anyone? :)
Posted 5/23/07 (By Travis)
House Passes Gasoline Gouging Bill
5/23/07 LA Times
What does it reflect on the times when 2/3rds of the Congress believes price gouging exists? High prices are the best incentive to encourage more of a product to enter the market. 1970s style gas shortages may be around the corner if we keep heading down this path.
Opposing the measure, the National Petrochemical and Refiners Assn. warned that every link in the chain of distribution -- right down to the local gas station owner -- would be in what it called a Catch-22 of having to set a price for its gasoline and hope that no one deemed it "excessively unconscionable."
But, of course, none of this matters as long as politicians are seen doing 'something'.
"I was at a funeral Saturday, and when the monsignor greeted me, he said, 'My God, Bart, you have to do something about these gas prices!' " said Rep. Bart Stupak (D-Mich.), chief sponsor of the anti-gouging bill.
Rep. Sheila Jackson-Lee (D-Texas) told her colleagues: "I can't go home, and I imagine none of you can, without saying we tried to do something."
With a bit of creative context, one can almost hear the National Petrochemical and Refiners Assn. echoing Fredrick Douglas:
"I have had but one answer from the beginning. Do nothing with us! Your doing with us has already played the mischief with us! Do nothing with us!"
Posted 5/9/07 (By Travis)
Gas Station Who Gave Discounts to Elderly Ordered to Raise Prices
5/8/07 Foxnews
Center City BP owner Raj Bhandari has been offering senior citizens a 2 cent per gallon price break and discount cards that let sports boosters pay 3 cents less per gallon. But the state Department of Agriculture, Trade and Consumer Protection says those deals violate Wisconsin's Unfair Sales Act, which requires stations to sell gas for about 9.2 percent more than the wholesale price.
Here is a similar story from last year, this station was fined $140,000...
Posted 3/4/07 (By Travis)
State Makes Big Fuss Over Local Couple's Vegetable Oil Car Fuel
3/1/07 Herald review
"They showed me their badges and said they were from the
Illinois Department of Revenue," Wetzel said. "I said, 'Come in.' Maybe I shouldn't
have."
So the saga begins...
Posted 1/17/07 (By Travis)
1/11/06 Three Legged Stool
Bangert writes a succinct proposal to keep the gas tax, but remove the Federal Government from management and building of our nation's highways. While I disagree with the need for gas taxes, and perhaps Bangert is just being politically savvy in his support of their continuance, I certainly can support relieving the Federal Government from control of the nation's highways. Unlike many, I view President Dwight Eisenhower's construction of our national highway system as a national abomination rather than some sort of national treasure. Not that I have any particular objection to highways or roads; I think we can agree that there was a 'need', if it's worth contemplating, for expanding infrastructure at the time. Yet private entities, or at worst, collaborative state governments, were and are plenty capable of fulfilling our transportation 'needs' - by the way, I really hate to use that word 'needs' as it provokes the wrong connotations; no one can know our 'needs' until after they have been met, as the process involves limitless interactions and an existential like vote tallying of freely acting individuals, beyond the predictability of any individual and certainly over the head of any government entity.
Regardless, Bangert's view regarding the value of state corroboration brings up some interesting points. First, beyond transportation, this sort of state cooperation can replace the bumbling actions of the Federal Government on many levels. I hesitate to use this example, as I am opposed to licensing laws, but if we are going to have them, they might as well be uniform and, by uniform I don't mean 'imposed' by the distant Feds as some now advocate. There are mutual benefits inherent in states coming together, voluntarily, to facilitate the movement of various professionals across state lines:
The
Nursing Licensure Compact is a mutual recognition model of nursing licensure that allows a nurse to
have one
(Added to 'Transportation Socialism' and 'Gasoline and Government')
Posted 1/7/07 (By Travis)
Political Peak Oil - One thing stands in the way of secure and abundant supplies of oil: Government
1/5/07 Reason
Posted 11/27/06 (By Travis)
Indiana
Gas Tax Debate
11/25/06 wndu
Democrats, who control the Indiana House, want to eliminate the state's sales tax on gasoline.
But, Republicans, who control the Indiana Senate, are skeptical.
Senate Republicans say it is unlikely the proposal would become law.
Republicans say exempting gasoline from the state's six percent sales tax could cost the state as much as $300 million a year. And, it would only save drivers a few cents at a time.
Posted 9/12/06 (By Travis)
Oil's Dark Secret (Required Reading)
8/10/06 The Economist
A great article! It is about time someone blamed the world's governments for the oil shortages and the resultant economic stagnations and sufferings.
In 'Atlas Shrugged', author Ayn Rand writes a fictional mirror image of the description of what is happening to Venezuela's oil company.
A couple themes pop out of this article. First, in 'Middle Eastern Governments and Causes of Terrorism' it is written:
Another theory is that without foreign aid or natural resources, governments are forced to liberalize because it is the only way for them to get tax revenues. In other words, when wealth can only be generated through the naked productivity/ingenuity of it's citizens, the rulers of that country will be most inclined to introduce reforms to accelerate this. Notice some of the strongest economic zones in the world today - Hong Kong, Singapore, Japan, Switzerland, Israel, Taiwan, South Korea and the (early, eastern) United States - are poor in natural resources. Historically, the British, Dutch, Portuguese and, going way back, Carthageans and Athenians, were all were top world powers without being strong in natural resources. Why was the Spanish Empire, a centrally controlled country drowning in colonial gold, discarded into the ash heap of history so fast? Returning to the Africa analogy, the areas which are richest in natural resources, especially the diamond belt, are suffering the greatest conflict and strife.
From the posted article:
One factor that does not seem to be a prerequisite to success for a national oil company is having a lot of oil. Petrobras, for one, began life as a refiner and distributor. It used its profits from those businesses to fund new ventures in exploration and production. Abundant, inalienable oil, on the other hand, seems to do most state-run firms more harm than good.
Another theme, touched on throughout this website, is that, sure, we have it bad here, our government is oppressive and large and immoral, but.... we still have it much better than anywhere else. The United States is home to most of the world's largest private oil companies and, even though these are still layered with burdensome taxes and regulations, we can still be thankful that we don't even have a single state oil company... yet.
(Added to 'Chavez', and 'Gasoline and Government')
Posted 7/21/06 (By Travis)
If you recall, on 4/23 I posted some critical commentary on President Bush's 'energy plans' for the 'masses', aka us. More specifically I said:
The article goes onto describe the burdensome changes government has foisted upon private industry, including replacing the 'deadly carcinogen' MTBE with ethanol. Now, I don't know this, but it would not surprise me in the least if the 'concern' about the 'safety' of MTBE was rooted in junk science, just like most of the rest of the stuff government tells us we should be afraid of and tries to 'protect' us from and that this initiative was pushed for and passed mainly at the urgings of the powerful farm and ethanol lobby in Washington.
I bring this up because I had a chance to do a bit of reading on MTBE, which confirmed this.
2/99/06 Steven Milloy
Acsric.com
After chronic inhalation of MTBE, female rats were found to have an excess number of liver tumors (hepatocellular adenomas) at the highest MTBE concentration (8,000 parts per million). Neither male rats nor mice of either sex were found to have any excess cancers at any concentration (Bird, 1997).
Regarding studies w/ other types of cancers:
The authors of this study note that the development of these cancers requires chronic exposure to toxic doses of MTBE. They assert, "because of the intense odor and taste of MTBE, humans will not tolerate either air or water concentrations sufficient to produce [similar effects]" (Mennear, 1997)
These studies and others indicate that MTBE is most likely not dangerous, should not have been banned, $140 Billion should not have been spent to clean it up, and the hundreds of other lawsuits currently active regarding the compound should be thrown out. It was found to cause cancer and other health problems in animals only after consistent exposures to incredibly high doses. This technique is commonly used in junk science. It allows layers to loot productive private companies and allows competitors to attain government issued commodity monopolies over industries.
The way these sorts of studies are designed would be the equivalent of feeding a human a halloweens night worth of sugar every day for a few months and then banning sugar. Anything in excess, especially a nonorganic chemical is going to cause problems when you feed it to rats in quantities of their own body weight!
The burden of proof should be on those trying to prove a chemical harmful, yet for some reason it seems to be the other way around. How does one go about proving a negative?
But, the more vexing question is how did MTBE even end up in our gasoline? Get this:
In 1990, Congress enacted amendments to the Clean Air Act that required refiners to add oxygenates to gasoline in order to combat air pollution. At the time, Congress and the EPA knew that MTBE would be the primary oxygenate used given supply, transportation and other difficulties with using alternatives such as ethanol. MTBE helped reduce air pollution significantly.
So, in effect, government required MTBE to be used, before banning it! Just like the old axiom, "Everything not forbidden is mandatory." This also reminds me of what occurred with folic acid. Bureaucrats refused to let private bread companies advertise that their bread was fortified with folic acid, which may help reduce certain rare birth defects, but then, some years later, the same bureaucrats, in another asinine public safety scheme, required that ALL bread be fortified with folic acid. What did MTBE replace?
Following MTBE’s approval as a gasoline component by the United States Environmental Protection Agency (EPA) in 1979, refiners began adding MTBE to gasoline to replace tetraethyl lead (TEL), which the EPA required to be phased out because it had been identified as a source of air pollution.
Was TEL really that bad of an air pollutant? It has been labeled as the "Chernobyl of America" for causing health problems. I don't have time to keep looking this stuff up, but, again, I doubt TEL was as bad as the doomsayers claim/claimed. Of course, the makers of TEL got their pants sued off them too.
Let's continue the pattern:
Ethanol creates similar problems, including increased emissions of acetaldehyde - a probable human carcinogen - by up to 70%.
Give it 20 years and Ethanol will be banned, after it was required, and the makers of ethanol will be sued out of business and so forth.
Now, do not misunderstand me, since the basic function of government is property protection, I recognize the necessity for legislation allowing private parties to sue other private parties when pollutants cause damage. If a neighbor of mine pours mercury all over his property, fine, but when it gets into my drinking water well I can sue him in a court of law. However, this ongoing national regulation and micromanaging of such commodities as gasoline is ridiculous. This power given to government is abused and government intervention in this area surely accomplishes the opposite of its intentions.
This pattern does not just take place with gasoline additives, this political, sociological, psychological 'culture of fear', manifests in broad swathes across every aspect of society. As you might imagine, the medical field is especially ripe for these sorts of shenanigains, a fact which I'm becoming more and more and more and more aware of.
We need to wake up to this fearmongering, made possible by the media, who seek to sell sensationalist stories, but ultimately, by the American people, who revel in and buy the rotgut that today stands for journalism and science.
If my readers will allow it :), I'd like to make another prediction. I don't know much about Bird Flu, haven't read a thing on the science behind it, but based solely on the media coverage of it, I can almost guarantee it is just as phony and fake as anything else the fearmongers have put out there. There is no Bird Flu crisis. There is no Bird Flu danger. The emperor has no clothes!
What is actually occurring, as Bill Whittle might have said, is that we, the American People, are sitting amidst a towering citadel of spotless marble, the purest most wonderful civilization known to man, and.... we spend our time looking for cracks and in our panic to fix these nonexistent cracks, we risk destroying all that we have wrought.
Posted 5/11/06
5/9/06 Thomas Sowell
In other words, those who supply oil are being denounced and demonized by those who have been blocking the supply of oil.
Sowell also mentions the growth of the developing world, China and India as a reason for the high prices. While I agree with this, on the demand side, and perhaps should have mentioned it more in my analysis, the supply side would, IMHO, have more than kept pace with this surging demand had oil across the world been free of government theft and coercion.
Posted 4/23/06
Bush promotes fuel cells, rides his bike on Earth Day
4/21/06 San Francisco Gate I have to write a bit about this because of the way the media is covering it and the reactions of our government officials.
The first sentence of this article is:
Unable to drive down high oil prices, President Bush is spending Earth Day promoting futuristic hydrogen fuel technology as a way to wean Americans from gas-guzzling vehicles.
Why would anyone want a President who was able to drive down high oil prices? Why would anyone, reporter or otherwise, want government to have this kind of power? In fact, a government that could control gas prices with that much ease would probably unleash the the highest prices and greatest shortages etc... on its populace, caused by the very virtue of that control.
However, we need to ask, why is Bush trying to 'wean Americans from gas guzzling vehicles'? Rather, one would think we should be trying to wean him and others in government from again trying to spend/steal hard earned tax dollars from the populace to waste on another grandiose hydrogen initiative, despite the fact that, as documented on this website and others, hydrogen is currently both more costly and more polluting than regular gasoline.
So why do many environmentalists keep pushing for government funding/thieving for programs that produce more pollution? Your guess is as good as mine. They are literally clueless, and not just in this regard...
Another argument for hydrogen fuel, despite the higher costs and increased pollution, is this need to be 'energy independent', a term increasingly coined by President Bush and other 'Republicans' in reference to Middle Eastern supplies. But, of course, this government invented goal of 'energy independence' is just as shallow and ridiculous as a goal of 'automobile independence' or 'toilet paper independence', and has become little more than the vogue political jargon of these meddling elites. What would really help our energy problems is 'energy independence' from government!
We also need to address President Bush again talking about 'price gouging': But to address the immediate problem, Bush offered only a pledge that "if we find any price gouging it will be dealt with firmly." He didn't say if government would also continue to heavily fine those who sell gas too cheaply...
Even worse, 'Republican' leaders in Congress are saying the same thing:
Congressional leaders yesterday planned to ask President Bush to order investigations into possible price gouging by oil companies as crude oil prices hit new highs on world markets and average gasoline prices in the nation's capital blew through the $3-a-gallon mark.
House Speaker J. Dennis Hastert (R-Ill.) and Senate Majority Leader Bill Frist (R-Tenn.) are preparing to send a letter to the president Monday asking him to direct the Federal Trade Commission and Justice Department to investigate alleged price gouging and instruct the Environmental Protection Agency to issue waivers that might make it easier for oil refiners to produce adequate gasoline supplies, Hastert spokesman Ron Bonjean said.
Of course, the only problem with all of this is that, by definition, there is no such thing as price gouging! The phenomenon does not and cannot exist!
But, it is interesting they mention the burdensome EPA regulations and requirements for the formulation of gasoline. From another article:
According to Michael Ports of the Society of Independent Gasoline Marketers of Americas, "Twenty years ago, there were two blends of gasoline offered in three octane levels, and essentially one blend of diesel fuel. Today, there are more than 18 unique blends of gasoline mandated across the nation -- again offered in three octane grades [57 total] -- and at least three different blends of diesel fuel."
Mandated? By whom? To whom? Why? What does it cost us?:
Pumps go dry at some gas stations
4/21/06 Philadelphia Inquire
Catherine Rossi, spokeswoman for AAA, said she knew of eight stations in the region that were out of fuel yesterday.
Areas of Virginia and Texas, also going through the ethanol conversion, have experienced similar supply disruptions, said Jeff Lenard, spokesman for the National Association of Convenience Stores.
I've always maintained whenever there is a shortage of something people are willing to pay for government is to blame. Indeed, this is the case here:
As if rising prices weren't enough, the tanks have run dry at some Philadelphia-area service stations in the last few days as the refining industry stumbles through a change in the formulation of gasoline.
Oil refiners are phasing out a petrochemical that makes gasoline burn cleaner but which also has been found to contaminate groundwater. Refiners are switching to corn-based ethanol.
The conversion to ethanol was prompted by the Federal Energy Policy Act of 2005, which left refiners vulnerable to groundwater contamination suits and mandated greater use of renewable fuels.
Is it any surprise that the 'Federal Energy Policy Act' served to screw up energy? If there was a law passed called the 'Stop the Children from Starving Act', the first result I would expect to see is more children starving.
The article goes onto describe the burdensome changes government has foisted upon private industry, including replacing the 'deadly carcinogen' MTBE with ethanol. Now, I don't know this, but it would not surprise me in the least if the 'concern' about the 'safety' of MTBE was rooted in junk science, just like most of the rest of the stuff government tells us we should be afraid of and tries to 'protect' us from and that this initiative was pushed for and passed mainly at the urgings of the powerful farm and ethanol lobby in Washington.
The maintenance-related shutdown of one area refinery, production problems at another, and the change from winter-blend to summer-blend gasoline are exacerbating the problems.
We've already documented the reasons for this too. There is a shortage of refineries because environmentalists, regulators, and politicians won't let any more be built:
In the US, getting a permit could involve years of navigating local, state, and federal regulations and protests from environmental and community groups, analysts say.
But, if all this isn't enough, by far the most disgusting occurrence of the past few weeks have been the attacks by pandering politicians, 'Republicans' no less, going after ExxonMobile CEO Lee Raymond's $150 million retirement bonus:
Hastert also took aim at the rich pay package for Exxon Mobile Corp's retired chief executive, which he called "unconscionable."
For some background, Raymond has been the CEO of Exxon and then ExxonMobile for the past 13 years. When Exxon merged with Mobile in Dec of 1998, their combined stock price was worth $237.53 billion. Eight years later the company is worth $362.53 billion, giving it the highest market capitalization of any company in the world. This is an American success story to be celebrated, not criticized!
Obviously, Lee Raymond didn't single-handedly generate this wealth, but he must have played a key roll and his shareholders rightly decided to reward him. If anything, it looks like they didn't pay him enough (although who am I to judge what others do with their own property...)! Arguably, this man has done more to reduce the price of oil and expand gasoline availability than any other person in the United States, yet this is whom is criticized by government during times of high prices and shortages that they, the government, caused! This demagoguery is all the more ridiculous when one considers that there are 9 cents of profit as compared to 42 cents of taxes in a gallon of gasoline!
I wonder how people like Lee Raymond stay sane. However, we are lucky he is sane, very sane, as we can tell by his most recent speech, which I very much wish I had a transcript of:
Former Exxon CEO Defends $150M Pay Package / Lee Raymond blasts critics of his retirement package, says oil industry will have its day of reckoning.
4/19/06 Reuters
Never one to back away from confrontation while head of ExxonMobil Corp. for more than 13 years, Lee Raymond showed few signs of mellowing in retirement in his first public appearance following the controversy that erupted with the disclosure of his multimillion-dollar retirement package.
In a 90-minute talk at Columbia University on Tuesday evening, Raymond was unrepentant for any past decisions he had made and he blasted politicians, the U.S. car industry, Wall Street, environmentalists and other critics of the oil industry for what he said was their failure to understand the nature of the energy business, conceding only that he had been unsuccessful in getting his point of view across. <.>
The combative former CEO said Exxon's success during his tenure was entirely due to its focus on long-term goals and he had nothing but withering criticism for those who are proposing windfall taxes on energy companies, saying it would only serve as a disincentive to investment. <.>
On the topic of alternative energy sources, Raymond poured scorn on the notion that petroleum-based fuels will be supplanted in the near future. When President Bush's suggestion of using ethanol produced from switchgrass as an alternative to gasoline came up, Raymond shook his head and grinned sarcastically.
You gotta love all this, but here is the kicker:
"Back in 1998, when prices went down to $10 (per barrel), I don't recall anyone in Washington calling me up and saying 'what can we do to help.' But I didn't want them to be calling up. That's our job. We are in that business. It's our job to manage the risk. I am not interested in hearing from (politicians) when prices are at $10 and I am not interested in hearing from them when prices are at $40 or $50," he said.
Sounds like he is not interested in hearing from politicians period! Frankly, I am sick of hearing from them too, but far sicker of suffering from their actions. I'd like to hear more, much more, from people like Lee Raymond.
Posted 4/1/06
Venezuela Takes on Exxon Mobil in Oil Play
3/3/06 AP A rather interesting article describing how Venzuelan President Hugo Chavez is not just giving more control of the oil production to Venzuelan state oil companies, but also favoring state oil companies from other 'friendly' countries. Of course, 'friendly countries' in Venzuela's case means totalitarian regimes like China and Iran. Why else would this be done if not for political favors/alliances?
The raising of taxes and 'fees' and the lessening of private ownership of oil will have two results.
The first is the most dangerous, as now the government will have increased revenue, hence more power, and more money to squander and harm the people with. Look for Venezuela to continue to slide towards a statism similar to that 'enjoyed' by Middle Eastern Governments.
The second is that Venezuela will export less oil than it would if the fields were to be privately manned, fewer workers will be hired, foreign investment will fall and it would not be surprising if the revenues collected by the government are actually lower than if this trend did not exist.
The above two paragraphs seem to be in contradiction with each other, but I believe they can both be true if we factor in a time scale. Government revenue will increase in the short term, but fall in the long term. In the end, government will find it has destroyed the private sector and has complete power over an industry, which is now stagnating. Then it turns its attention to the next industry. This is the rather predictable result of socialism.
However, the sheer incompetence of government and the innate ability of the private sector to generate wealth (which can then be stolen by the government), means that private industry is often grudgingly accepted:
Experts say, however, that fears that Chavez, a close ally of Cuba's
Few state oil companies have the expertise to upgrade the extra-heavy oil and tar-like bitumen found in the Orinoco into lighter, marketable oils.
State companies do not have this 'expertise' and cannot develop these new deposits precisely because they are State companies.
(added to 'Chavez' and 'Gasoline and Government')
Posted 2/26/06
Midwest Oil fined for selling gas too cheaply
2/24/06 Star Tribune
The state imposed a $140,000 penalty for what it called "willful, continuing, and egregious" violations of the price law.
The fine against Midwest Oil of Minnesota is twice as large as any imposed on a company since 2001, when the state established a formula based on wholesale prices, fees and taxes to determine a daily floor for gas prices.
The price law was intended to prevent large oil companies from driving smaller competitors out of business, but some critics argue it fails to protect consumers.
According to the Commerce Department, the Midwest-owned stations in Anoka, Oakdale and Albert Lea sold gas below the minimum price on 293 days in 2005.
Those criminals! Again, government penalizes excellence, entrepreneurship, and hard work, and acts to stagnate positive economic change.
Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible.
- CA Justice Janice Rogers Brown
Posted 2/1/06
Oil execs refuse to testify at U.S. Senate hearing
1/30/06 WASHINGTON (Reuters) - Officials from six major oil companies have refused to testify this week at a Senate hearing looking into whether oil industry mergers in recent years have made gasoline more expensive at the pump.
The FTC is investigation whether oil companies manipulated gasoline prices and oil refining production levels. The agency plans to finish its probe and send its findings to Congress this May.
About time! Why should they waste their time with these jokers? I only wish they would lay the blame where it truly belongs: back at the foot of the United States Senate. Who was it that said, "The blame that travels furthest usually belongs at home."?
Posted 11/16/05
Documents says oil chiefs met with Cheney Task Force
11/16/05 Washington Post The Washington Post doesn't understand why government policy on energy should include oil companies. In reality, oil company policy on energy should not include government! I don't know why these oil companies would deny meeting with Cheney's staff (maybe because the meeting was four years ago), but I also don't understand why Cheney and these oil companies won't be honest about why Environmental groups were 'excluded'. Added to 'Gasoline and Government'.
Posted 11/11/05
I've grouped all the posts on gas prices and the hurtful government meddling in the industry into 'Gasoline and Government'. Little did I know I've written 9 posts on the subject! Oh and it's been pointed out that the ConocoPhilips study was in the late 90s and the profits are higher now. Perhaps, but it is still nowhere near what is taken out in taxes.
Posted 11/11/05
FTC subpoenas Big Oil firms in U.S. gasoline probe
11/10/05 Reuters Federal Trade Commission witch hunt alert.
The agency sent out "dozens of subpoenas" to companies, including oil giants Exxon Mobil
Corp., Chevron Corp. , ConocoPhillips, and the U.S. units of BP Plc. (BP.L) and Royal Dutch Shell
Plc., FTC Chairwoman Deborah Majoras said.
She spoke following a hearing on energy profits held by the Senate's energy and
commerce committees. "It is a major investigation."
"If there is anticompetitive behavior going on between and among these gasoline companies, we'll find that and we will prosecute," Majoras said.
Again, what should be happening is that the oil executives should be subpoening some of these US Senators for their blatant 'anticompetitive behavior'. I'd like to see an investigation of how the Senate came to pass these laws, compiled by the American Petroleum Institute:
Fuel
Tax Facts
·
The
price for a gallon of gasoline includes 42
cents for taxes. The federal gasoline tax is 18.4 cents a gallon. The national
average for state and local gasoline taxes is 23.6 cents a gallon.
·
The
total annual gasoline tax bill for Americans is about $56 billion, including $24 billion in federal
tax and $32 billion in state and local taxes.
·
Taxes
on highway diesel fuel average 48.2 cents per gallon.The federal tax on diesel fuel is 24.4
cents a gallon, six cents a gallon more than the federal tax on gasoline. The
national average for state and local diesel fuel taxes is 23.8 cents per gallon.
·
Diesel
fuel users - usually truck owners - pay $16 billion in fuel taxes each year.
·
The
total annual motor fuels tax bill for the nation is nearly $72 billion. That works out to about $260
for every man, woman and child; $385 for every licensed driver, or more than $660 for a family.
· Federal motor fuel tax revenues finance the federal Highway Trust Fund program, which pays for highway construction and road maintenance.
Crude Oil (Other)
1)
Import Duty – a duty (tax) imposed on crude oil when it is entered into the commerce of the
United States. The duty rates are:
2)
Merchandise Processing Fee – merchandise that is formally entered or released into the
commerce of the United States is subject to the payment to Customs of an ad valorem fee based on the
value of the merchandise. The fee is :
3)
Harbor Maintenance Fee – Commercial cargo loaded on or unloaded from a
Sales
and Use Taxes –
Just like taxes imposed on the sales of all types of goods, some states
and local taxing authorities also collect taxes on the sales of motor fuels based on the
value of the product or on the use, storage or consumption of the product.
Leaking
Underground Storage Tank Tax (LUST)
In addition, when oil companies drill on government land, of which the Federal government, not the American people, owns 653 hundred million acres out of 2.2 billion total (public and private) in the country, they are taxed again:
In 2000, the Minerals Management Service (MMS) collected over $5 billion in royalties from oil and gas development on government lands -- $4.2 billion from offshore and nearly $1 billion onshore. MMS also collected over $1 billion in bonus bids, rental payments and other revenues, to bring the total federal revenues collected from oil and gas operations on government lands to approximately $6.3 billion.
This site lists other taxes such as State Severance and Production taxes, Conservation taxes, and property taxes (above land value)
Now, let's compare this with these 'massive profits' these oil companies make. From ConocoPhilips:
An industry-wide study in the late 1990s showed that oil industry profits amounted to an estimated 7.3 cents on each gallon sold. More recently, ConocoPhillips reported that during the third quarter of 2005 earnings from its U.S. refining and marketing operations amounted to 9 cents per gallon, out of industry average retail price of $2.60 per gallon during the quarter.
Do you see why I say the oil companies should hold hearings and haul US Senators before their committees? Do you see why I say that these oil companies should be the ones issuing subpoenas to government officials? Profit is 9 cents a gallon and taxes are 42 cents a gallon! The government is nearly 5 times as liable and responsible for the price of gasoline as private industry, which isn't even a fair comparison because 'profit' is a necessary component in the price of oil, while taxes are not. Another things to note is that this 42 cents on the gallon figure is certainly not high enough. There are taxes mixed in the cost of tools, wages, and any given plethora of taxes taken out at every transaction and step from start to finish, not even including taxes demanded by other governments if the oil is procured there. What would the price of oil be in a taxless society? I doubt we will ever find out.
Posted 11/10/05
Today, the United States Circus, I mean, Senate, further disgraced itself by holding the most pompous, ridiculous, idiotic hearings since they hauled professional baseball players in to testify about steroids. This is strait out of Atlas Shrugged. What if I went and planted large rocks all throughout the lawn and then berated and sued the lawn care company when they had trouble cutting the grass? What if I flushed pipe bombs down my toilet and then raged at the plumber? These problems in energy, including high gas prices, are caused by the same US Senate that is berating these oil executives for 'excess profit'! If anything, the US Senate should be hauled before the oil executives! The oil executives should be demanding answers to questions, the media should ask government why it has imposed these barriers and caused these problems, and the American people should focus their anger on the corrupt, inept, and thieving politicians.
Oil Company Execs Defend Huge Profits
11/9/05 Associated Press Sen. Pete Domenici, R-N.M., said, opening the hearing in a packed committee room. "The oil companies owe the American people an explanation," he declared.
No Senator, you have it backwards, it is the US Senate which owes the American people the explanation.
Thankfully, The head of the National Association of Manufacturers, former Michigan Gov. John Engler, criticized lawmakers for the way they handled the hearing.
"Demagoguery and demonization will not reduce energy prices or solve supply problems in the long run," he said. "Our energy supply and infrastructure have suffered from 25 years of increasingly restrictive government policies that have made it almost impossible to access and refine the resources we have. The Senate should dispense with the theatrics and get serious about Americas energy supply."
Posted 10/29/05
Senior US Senator Says oil tax may be needed
10/28/05 Reuters "I believe it is time to take a serious look at reinstituting an excess profit tax on oil companies with the proceeds being put towards the Low Income Home Energy Assistance Program (LIHEAP) and deficit reduction," Gregg said in a statement. "Some might call this a novel approach for me, but I cannot sit back in good conscience while those in our society struggling to heat their homes are being left in the cold by oil companies," he said.
So, a 'Republican' Senator, blowing in the political winds, seeks to offset higher gas prices by taxing oil companies more. Of course, this will just serve to further raise the price of gas as the companies pass the tax back onto the consumer.
House Passes Bill to Boost Refineries
10/7/05 Associated Press Why should government legislation be required to 'boost oil refineries'? Why can't private companies do it on their own, as it is needed, without government coercion? Government must not have the power to regulate energy.
Posted 9/25/05
To elaborate further on the real reasons for higher gasoline prices. Rush Limbaugh put it quite eloquently a few weeks ago on his radio show:
RUSH:
So what are the things that can be done about this (higher gas
prices)? Well, you wouldn't believe the number of taxes that
are in a gallon of gasoline. And it's just like you wouldn't believe the taxes in your phone bill.
Do you know you are still paying taxes on your phone bill to make sure that farmers have phones? The
Rural Collective Phone tax? You're
also still paying a tax on your phone bill for those buildings that Clinton and Gore personally
wired for the Internet. Well, it's no different with gasoline. There are so many taxes in a gallon
of gasoline, and if all these politicians were that concerned about the economic impact, ladies and
gentlemen, the price of gasoline, they could temporarily suspend some of these taxes; they could
permanently cut some of these taxes. Oh, no, but they won't do that because there's one thing
government will never do without and there's one thing that government will never even do less of,
and that's money. Oh, yes. When our taxes are raised, they don't give one thought to whether or not
we could absorb it and afford it. But when tax cuts are proposed, the people in the government ask,
"Well, how we going to pay for this? Well, how we going to pay for it? How we gonna make up for
it? We can't do without that!" But we're expected to. Everybody else is expected to. So the
next time you hear some politician trying to get on your good side by bellyaching and moaning about
the price of gasoline, why don't you ask him, "Why don't you do something about it, then?"
Since we can't do anything about imports right now, since we can't go into ANWR (or
Florida, or the Atlantic and Pacific coasts), since we can't
drill anywhere else and since we have all these stupid, silly different formulations (environmental
regulations), why don't you just temporarily suspend some of
the taxes in gasoline? Just ask him that. If you're really concerned, if you really want to help us
in the back pocket, really want to help us at the family dinner table, really want to help us out
here with the family economics and the income, just get rid of some of the taxes in it. It's not
that hard to do. And you just watch their reaction: "Well, we need a majority to do that... I
don't know what kind of legislation that would require.... That's a good idea, we'll put it in the
hopper, I'll throw it around with my staff," blah, blah, blah, blah. Nothing will ever happen
on it.
9/14/05 Think you are upset about high gas prices? Maverick British entrepreneur Richard Branson is so furious he wants to build his own oil refinery. Like the rest of the airline industry, Mr Branson's Virgin Atlantic Airways has been stung by higher jet fuel prices and was forced to raise fuel surcharges for the second time in four months.
"If we don't start now to get more refineries built then fuel prices could literally rocket to $US100-$US200 (per barrel of oil) and the world economy would come to a grinding halt," Branson said in an interview on financial news network CNBC overnight.
Mr Branson did not say where he wants to put his refinery, but some analysts said he should not look to the US, where no one has built a refinery in 29 years.
"My immediate reaction to that is: Not in the US," said Paul Flemming, oil analyst at Energy Security Analysis Inc. "That's definitely more pie in the sky than anything."
In the US, getting a permit could involve years of navigating local, state, and federal regulations and protests from environmental and community groups, analysts say. (emphasis mine)
Let's compare this to a report sponsored by the World Bank and the International Finance corporation:
The report tracks a set of regulatory indicators related to business startup, operation, trade, payment of taxes, and closure by measuring the time and cost associated with various government requirements. For example, an entrepreneur in Mozambique must undergo 14 separate procedures taking 153 days to register a new business. In Sierra Leone if all business taxes were paid they would eat up 164 percent of a company’s gross profits. In Syria, it takes 63 days, 18 documents, and 47 signatures from the time imported goods arrive in ports until they reach the factory gate.
Isn't it great to see similarities between the United States and these third world countries?
Posted 9/24/05
Previously I posted an important quote from Frank Chodorov:
The more subsidized it is, the less free it is. What is known as `free education' is the least free of all, for it is a state-owned institution; it is socialized education - just like socialized medicine or the socialized post office - and cannot possibly be separated from political control.
To provide an example of this:
Georgia Governor asks state's schools to close to save gas
9/24/05 WISI Georgia Governor Sonny Perdue Friday asked the state's schools to take two "early snow days" and cancel classes Monday and Tuesday to help conserve gasoline as Hurricane Rita threatens the nation's fuel supply line. If all of Georgia's schools close, the governor estimated about 250,000 gallons of diesel fuel would be saved each day by keeping buses off the road. (See previous post 9/1 and story on more gas ridiculousness from 'Republican Gov Sonny Perdue', who, by the way, was rated horribly by the Cato institute.)
Do you want your kid's education at the whim of some governor or some hurricane a few states over? Would you be willing to pay a bit extra to keep your kid in school when the price of gasoline is higher? But, this specific gasoline problem is not the reason I'm posting this story. It is to show the political control and power that government has over the education system. This manifests itself in many ways that don't make the news, but that all work to stagnate the education of our children and limit freedom.
On a side note, I couldn't help but notice this tidbit in the story:
As prices spiraled after Hurricane Katrina, Perdue suspended the state's gas tax and the Legislature quickly approved the measure in a special session, saving motorists an estimated 15 cents per gallon. The tax is scheduled to return a week from Saturday.
Gov Perdue, why is the tax returning?
Posted 9/3/05
Thousands Complain to Feds on Gas Gouging
9/0/01 The Energy Department reported more than 5,000 calls to its price gouging hotline from motorists around the country, although officials emphasized there was no way to immediately determine how many of the allegations were valid. Although I am a mere citizen, I already know the answer: none of these allegations are valid. The Federal Government has no business over what we citizens charge each other for goods and services, or what we pay each other for employment. In fact, neither do State or County, or Township governments. This hotline should be abolished (along with the Department of Energy).
Three Cheers for Price Gougers
9/2/05 Tech Central Station With every disaster or crisis, it seems that the public, press and politicians require a remedial course in Economics 101. In fact, apparently we need an ongoing educational campaign even when there is no catastrophe, as demonstrated by the recent foolish legislation in the state of Hawaii to cap wholesale fuel prices. Note the subhead in the linked story: "Some analysts warn move may spur supply problems."
Really? Only "some"? Maybe they need to be more careful about which "analysts" they listen to. Whatever would we do without those other "analysts"?
Imagine the headlines, "Legislature Mandates Pi To Equal 3.00000 -- Some Analysts Warn Move May Spur Engineering Problems," or "King Canute Commands Tide To Recede -- Some Analysts Warn Move May Spur Wet Footwear Problems." What would we think of the analysts who thought that the proposed mandates were no problem, perfectly in consonance with the laws of physics and human nature? Even most people with typical journalism educations would recognize such heads and subheads as the jokes they are, but somehow when it comes to basic economics, the laws of supply and demand, and the function of prices in a market economy bizarrely remain subjects for public debate.
Posted 9/1/05
Since this isn't a 'breaking news' site we won't be covering the Hurricane damage in New Orleans and the SW US. However, there has been an occurrence which is part of an underlying pattern we've seen before. First, let me return to a previous post in 'Tsunami Tyranny':
A Wave of Price Gouging 1/10/05 Cafe Hayek produces a great article illustrating how the free market may raise prices, but also delivers much needed goods to victims of disasters. Tsunami Brings Long List of Profiteers - 1/27/05 Associated Press describes a few of the entrepreneurs that help make immediate Tsunami relief possible and long term recovery feasible. Price Gouging in Florida - 9/14/04 Dr. Thomas Sowell details the hurtful counterproductiveness of Florida Republican Governor Jeb Bush's efforts to ensure 'fair prices' for Florida victims of hurricane Jeanne. Another so-called 'Conservative'... and he was sent by President Bush to oversea Tsunami relief!
After reading those articles you can see how hurtful government controls on prices in disaster areas, accomplishing the opposite of their intentions and end up hurting, not helping, devastated populations. Yet, we see the same effects already taking place during Hurricane Katrina:
President Bush said on Thursday looters plundering stores in New Orleans and elsewhere in the chaotic aftermath of Hurricane Katrina should be treated with "zero tolerance" and warned gasoline sellers against price gouging.
Ouch! $6 gas near Atlanta Georgia governor outlaws gouging as stations jack up cost, lines form
8/31/05 World Net Daily "We will not tolerate the exploitation of Georgia consumers as we recover from the effects of Hurricane Katrina," Perdue said in a statement. "Violators of this price gouging statute will be punished to the fullest extent possible."
Here we see a 'Republican' President and a staunch 'Conservative' newspaper with no mention of how misguided these policies are. Most disappointing.
Alaskans Wary of Vote on Oil Drilling (posted 3/17/05)
Alaskans Issue Wary Response to Senate Vote on Oil Drilling at Arctic National Wildlife Refuge
3/17/05 Associated Press/ABC news. Most media bias is done covertly, by omission or distortion. This story is just about an outright lie. The impression given is that the natives are being exploited and/or have an unfavorable view of the recent Senate vote. The exact opposite, of course, is true. The natives and all Alaskans were being exploited by the Democrats in the Senate and the environmentalists across the country. This story says: The tiny north coast town of Kaktovik officially supports responsible development of oil and gas. But many reacted warily to the Senate vote to allow drilling in their back yard. <..> Mayor Lon Sonsalla said just about everyone has concerns about changes that could accompany any work in the 1.5 million-acre stretch, where billions of barrels of crude oil are believed to rest beneath the tundra. First, the story gives the impression that 1.5 million-acres are going to be drilled on. ANWAR is 19 million-acres and only a small percentage of the 1.5 million-acre costal area will be affected. Secondly, contrast the above Associated Press rot with actual opinion polls:
Seventy-five percent of Alaskans told a February 2000 Dittman research survey that they wanted to open up the refuge for drilling, with only 23 percent opposed.
A 1995 Dittman survey yielded similar results, with 75 percent of Alaskans saying they backed ANWR drilling, and just 19 percent opposed.
In the Inupiat Eskimo villages near ANWR, support is even higher. A January 2000 survey in the village of Kaktovik found that 78 percent of residents back more energy exploration in their own backyard. Only 9 percent were opposed.
In 1995, the Alaska Federation of Natives, which represents 80,000 Eskimos, adopted a resolution supporting ANWR drilling, calling it a “critically important economic opportunity for Alaska natives.”
More evidence comes from a previous post of mine (which in fact first alerted me that this AP story was fishy):
Casting
a Cold Eye on Arctic Oil
9/10/03
New York Times - Nicolas Kristof goes to Alaska to investigate ANWAR (Alaska National Wildlife
Refuge) and offer his opinion on the Bush administration's proposal to open it to energy exploration
(aka - oil drilling). A vast majority of Alaskans, both Democrats and Republicans, support the plan.
Of course, Kristof opposes the drilling, but what is most interesting, besides the fact that only 7%
of ANWAR would be open to drilling (and perhaps only a small percentage of this 'spoiled' by the
drilling), is this statement in his story: It's
also only fair to give special weight to the views of the only people who live in the coastal plain:
the Inupiat Eskimos, who overwhelmingly favor drilling (they are poor now, and oil could make them
millionaires). One of the Eskimos, Bert Akootchook, angrily told me that if environmentalists were
so anxious about the Arctic, they should come here and clean up the petroleum that
naturally seeps to the surface of the tundra. (all emphasis
mine!)
One final comment on this is from this story from Newsday: Interior Secretary Gale Norton said:
"This energy production would generate billions of dollars in revenue for the federal Treasury as well as the state of Alaska," she said.
Why should the Federal Treasury get billions of dollars? Who are they stealing it from, the people of Alaska, the natives, the US taxpayer, or the oil companies?
See more posts on: 'the Environment'
Or a post on roads: 'Transportation Socialism'
See also 'Middle Eastern government's and causes of Terrorism'