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4.06.2004
Busted! Cheney wanted to raise your taxes in 1986, do I care? Not really, but it goes to show that meddling in the economy is a game played by all sides. Cheney Tax Plan From ?986 Would Have Raised Gas Prices: "Under Mr. Cheney's proposal, any foreign oil bought for less than $24 per barrel would have been taxed with a fee equal to the difference between the cost of imported oil and the $24 base price. According to the federal Energy Information Administration, the cost of imported oil in the late 1980's and most of the 1990's stayed well below $24, except for a brief period following Iraq's invasion of Kuwait. In fact, oil imports cost less than $18 per barrel over much of that time, so when that was the case the Cheney plan could have led to oil taxes of $6 or more per barrel, driving up demand for domestic oil." Not that I disagree with this. I'm of the opinion that creating market distortions in BOTH ways is counterproductive. Those cats that are so gung-ho about creating free markets and forcing market competition in foreign trade are silent about the broader issue of market distortions. Oil is a great example of how we have let an ineffcient industry outlive its usefulness. According to the rules of capitalism, once a product or service becomes more costly to produce or provide than a competing service then it will be replaced by the alternative and we move away from inefficient systems to more efficient ones. Sounds good so far. The problem arises when you get in the business of protecting industries that should rightly be replaced or abandoned. What we get instead of "creative destruction" is government intervention. In the case of oil this has resulted in efforts to artificially control the cost of oil for the benefit of oil consuming or oil producing industries. This creates an extended dependency. Once you protect an industry from replacement then you have a vested interest in continuing to protect that industry. Allowing it to fail now becomes too high a liability because of the resulting industries built up around it. (for the record I feel that the age of burning oil for fuel should have started its decline a decade ago and we should be well on our way to renewable sources of energy, but we cannot move in that direction until the market allows the true cost of alternatives to compete against the treu cost of fossil fuels. I also feel that oil will still be needed for material production, plastics, etc. so its best not to burn it all up right? ) I picture it like a tower of cards. A some point you stop adding new layers because building too high would lead to too much instability. In our "idealized" system a new industry would be born to replace one that has outlived its usefulness. But instead of letting the old tower fall we've started to look to government to provide glue, support sticks and protective hands. I'm not strictly anti-capitalist and if you've tried to pigeonhole me as such you aren't listening well enough. Arguing from a capitalist perspective you can see the flaws in our current oil policy. People are asking what the president is going to do about gas prices. I say, "why should he do anything?" Are we willing to admit that we WANT the U.S. government to create artificial prices in the market. By doing so you only risk prolonging the use of oil for industries that would be better served, long term, by moving to alternatives. Not to mention the consumption of inefficient vehicles based on an unrealistic expectation of fuel prices. There is no such thing as a free market. As long as we have borders and national governments we will have distortions. What a smart capitalist will realize is that even though there will always be these distortions they can be integrated. We factor in forces of nature, so we also factor in governments and borders. They become market forces. What we should do is work to counterbalance those forces but not so much that we create artificial markets domestically. In the event that we ask government to create markets we should do so only as a matter of necessity or security. Somewhere along the way there is a "real cost" to a product or service. When you pay less than that real cost it has to be made up somehow, either in corruption, the use of military operations or human rights abuses. How do you reconcile the capitalistic ideal that we should all be voluntary participants in the market with the concept of neo-empire where we should extend our economic influence to create favorable trade environments? Old empires used to invade and conquer to secure access to resources, thus creating great wealth for that nation, or later, their corporate entities. New empires use legal methods to gain access to resources by wielding economic power, backed by the threat of force, to force direct access to resources without the need to actually occupy that nation. The capitalistic ideal, one that many feel we should live by, means going to the actual owners of a resources and offering to buy that resource on the open market. We should pay people a fair price for what they rightfully own. Notice that I said "rightfully", I mean that individually or collectively. Here's a small scale example to illustrate my point... When a city/state wishes to acquire some land for development, say to expand a school, build a stadium, etc. they have the same options available to them that nations do as well. Option number three is what you want if you are the owner of the resource, or property and don't wish to have it seized or stripped from you, without proper compensation. Option two is what this anti-globalization brouhaha is all about. We all thought that option one was a relic of the past and doomed to gathering dust in the basement of history. Were we wrong? The corporatists that are by far the most influential voice in either party are working hard to reduce costs and increase opportunities for profit for important corporate interests. They see paying fair market value for anything as a potential hindrance to profits. If they can get what they need, resources or labor for less than market value they'll fight for that. That is the guiding light for both domestic and foreign policy. | |
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