Who is the Big Bad Wolf?

I've heard it so many times... Walmart is evil, Insurance Companies want to kill you, Pharmaceutical companies are the run by demons, we need to sue the tobacco companies and that will cure cancer, sue McDonald's and people won't get fat anymore, and of course Satan himself is... Big Oil. It seems that the liberals have a new face of evil to point to for all of the country's problems every time we turn around.

Of course the answer is always the same. We need more government regulation of the industry. We need more taxes to "punish" these companies for DARING to make a profit, as if they their stock holders (read 401K managers of every OTHER company out there) would actually be happier with them if they simply gave away all of their profits. Where were these people when Big Oil was struggling for survival? Where were these when George Bush and his oil buddies were going bankrupt. If you've lived in Texas or any other Big Oil state you know what it's like when times are good AND when times are bad. The fact is... like almost ALL things in an economy... there are cycles. Just like some people couldn't see tech stocks ever going down in the 90s, or home prices ever decreasing three years ago. Guess what commodity prices go up and they go down... if you let the market adjust itself.

Two things that people seem to be ignoring. #1 the environmentalists working with well intentioned politicians have made INCREASING OIL SUPPLY in the US almost impossible, at the same time punishing oil companies for even using domestic supplies (Obama actually sponsored S.115 which would repeal all tax breaks for DOMESTICALLY PRODUCED OIL) almost forcing oil companies to import, leaving our price for gas up to OPEC. Economics 101 if you cannot increase supply and demand goes up, then the price goes where? $3.50 a gallon and rising. Hello?! Of course, are WE using more oil than we use to? Sure. But that’s not the problem. The problem is #2 China has opened the doors to capitalism and a nation of a 1.4 BILLION people suddenly have some money and they want to spend it. So… they are buying cars and machinery and all kind of stuff. This is called an increase in demand on steroids.

So global demand has gone up and our government has closed the door on our resources to meet the demand. You are paying for it. Congrats. Throw in the whole ethanol mess and you are paying more for EVERYTHING. This is called good intentions made into bad policy because it was made without intelligent data. This is what happens when you don’t let markets determine direction, but try to control them. Hands off! Let it equalize. Pull back the regulations, allow drilling in ANWR and in the gulf. OR keep paying more and more for gas until somebody figures out a different way to drive. This is called the market spurring innovation. That’s another way that the market (not to mention American ingenuity) responds. Then once that happens, tax THAT to death and kill it… after all THAT will be the next big evil!

I can tell you that the answer is not in the Democratic plan, which is:

- Ending billions of dollars in tax breaks for big oil companies. (on domestic production… limiting supply FURTHER)
— Forcing the oil companies to do their part by investing some of their profits in clean and affordable alternative energy. (I’m sure that will make them decrease their prices… YEAH RIGHT!!)
— Protecting the American people from price gougers and greedy oil traders who manipulate the market. (So we are going to ask the Chinese to stop buying oil? Who is going to protect us from the GREEDY POLITICIANS who are taking bigger and bigger chunks of OUR money?)
— Temporarily stopping the diversion of oil to the national Strategic Petroleum Reserve, which is already 97 percent full. (irrelevant… ZERO impact)
— Standing up to the Organization of Petroleum Exporting Countries and other oil-producing nations that are working together to keep oil prices high (GREAT! Thanks, President Carter, does anyone remember the 70s and oil rationing! Sorry can’t go to work, it’s not my day to buy gas!!! GREAT IDEA!!!)

The real answer is what RR told us a long time ago. “In this present crisis government is not the solution to the problem; GOVERNMENT IS THE PROBLEM.”