The Cost Of Oil

Oil costs just over $57 per barrel. This seems like a significant drop in price compared to the $65 per barrel that was being paid in August. Considering just two years ago, OPEC sought to maintain the cost of oil at $20 - $25 per barrel because this promoted stability regarding the commodity, the drop in the current oil cost is not significant at all since we are still nearly three times more than OPEC’s preferred price.

The cost of a gallon of gas and heating oil do not reflect the actual cost of oil on the open market. When the cost of oil was only $20 per barrel the cost of a gallon of gas was just over $1.50. For the past couple of years, the costs have slowly increased, but when it hit $65 per barrel we suddenly saw gas costs at over $3 per gallon. Now that the cost of oil has come down a mere $8 per barrel we are again seeing the cost of gas back around $2 per gallon. In fact, the cost at the pump, right before hurricane Katrina, went up three time faster than the cost of crude.* These swings in price do not seem proportionate with one another.

The oil companies have recently announced that they have made record profits. The major oil companies in the US announced that they have made tens of billions of dollars in profits for the first nine months of the year: Exxon-Mobile $25 Billion (the most profitable corporation in the world); Royal Dutch Shell $21 Billion; British Petroleum $15 Billion; Conoco Phillips $10 Billion; and Chevron-Texaco $10 Billion. The high costs of gas coupled with record profits shows that these companies are using their monopoly on the commodity to improperly jack up prices and unjustly reward themselves with unseemly profits.

There are only five major oil companies in the United States today. Since the cost of oil and the cost of gasoline are not moving in proportion to one another, and all of the oil companies have gasoline prices within a few cents of one another, it would appear that there is a coordinated effort to increase the prices collectively. In other words, the oil companies appear to be colluding to increase prices and generate these profits. Such actions, if true, are a violation of the anti-trust laws.

If oil companies are jointly manipulating the cost of gas and home heating oil to improperly maintain artificially high costs and profits, then they are in violation of the law. Anti-trust laws were created to prevent just such a scenario. While we know the US Attorney General, who is an employee of an administration in the pockets of big oil will not go after these trust violators as the federal government did when Teddy Roosevelt was President, we must wonder where the state attorney generals such as Elliot Spitzer are as this price gouging continues.

* As reported by the Energy Information Administration

We Don't Torture?

The Senate recently voted on an amendment to an appropriations bill which would prohibit all United States entities such as the military and CIA from torturing any enemy combatants or prisoners of war. The amendment sponsored by Senator John McCain (R-AZ) passed overwhelmingly (90-9). The White House, however, was opposed to the amendment. The President has said that the United States is following the law, and it is not torturing any of the prisoners or detainees it is holding. For this reason, the White House opposed the amendment and has even threatened to veto the bill in the event the amendment remains apart of the bill. (It should first be noted that this President has not vetoed any legislation to date, so the threat of a veto seems empty at best.) The White House opposed the amendment to the point that it made a point of having VP Cheney go to the Hill to try and whip votes.

It is disingenuous for a White House to say that it is following the law, not torturing anyone, (although it was caught red handed when it tortured prisoners in Abu Gharib), and being opposed to an amendment which requires the administration to continue to do exactly what the administration says it is doing. In other words, the administration says it is complying with the proposed bill. If it is complying with the proposed law, why would the administration be concerned with it becoming law? If what the administration is telling the public is truthful, then the administration is opposed to a law requiring it to continue operating in the exact fashion that it is currently acting.

Opposition to something that would require no change should make people suspect that what the administration is telling the public is not truthful. On this topic specifically, the administration’s credibility is already low. When the War in Afghanistan started and Camp X-ray in Guantanamo Bay, Cuba was first set up, the Administration argued that the detainees were not covered by the Geneva Convention because they did not belong to a national army. Rather, the Administration argued that it was in its own discretion what to do with the detainees. This argument seems to have been, for the most part, died away as the Administration received a significant amount of political pressure from home and abroad. Nonetheless, we know that there were memos circulated within the White House which redefined torture to be only that activity which would cause organ failure or death. It is clear that there is a great deal more that could constitute torture than just these activities. Is this the definition of torture the President uses when he says we don’t torture?

Considering the Administration was opposed to following the mandates of the Geneva Convention from the outset of the military actions, and it has given such an expansive definition to what is permissible, it is unlikely that the Administration is following the Convention regarding torture. It is unlikely that the Senate Amendment would impose any new obligations on the Administration that the Geneva Convention does not already impose. Thus, opposing the amendment is akin to opposing the Geneva Convention, again.

The Washington Post recently reported that there are black-op prisons in various parts of the world including Eastern Europe. The prisoners who are being held there are likely not documented such that the Red Cross can visit them and confirm their health and treatment. (Another requirement of the Geneva Convention). These "ghost detainees" are especially susceptible to being tortured and there is no recourse for them since no one knows of their existence.

It is a disgrace that the Administration opposes following the Geneva Convention and the proposed law. Such opposition establishes the strong inference that a great deal of torture is going on and if this country was appalled by Abu Grahib, then we should prepare ourselves for when the truth comes out about what has been occurring in Gitmo and other detention centers.

Universal Healthcare Is Good For Business and the Economy

As a general rule, Republicans oppose the idea of universal healthcare. They point to anecdotes of Canadians traveling to the United States for medical treatments like transplant surgery. It is claimed that the reason the Canadians have to travel to the United States is because the list for the surgery is too long in Canada due to the universal health coverage. It is unlikely that the reason the people are not receiving kidney transplants is due to the health care system. It is more likely that a population of approximately 30 million people does not have the necessary number of transplantable organs available to accommodate all of the people who are in need of them. In contrast the United States, with approximately ten time the population, is more likely to have organs that match the patient’s criteria.

What the GOP does not point out, and the Democrats do not seem to be doing any better in showing, is that universal healthcare would be good for the economy and benefit businesses. This benefit is a reason that should be put front and center in the argument for universal healthcare.

General Motors recently settled a labor contract with the United Auto Workers. One of the sticking points for the agreement was the amount of money that the employees were going to pay for their healthcare coverage. The UAW agreed to begin paying toward their own healthcare coverage. This is the first time the UAW workers have had to pay anything toward their healthcare insurance. However, GM is still at a severe disadvantage compared to its competition. GM pays approximately $4 billion per year in medical health insurance for its employees. This is a significant amount of money that its competitors, such as Toyota, are not paying. The result is that Toyota is able to spend the money it is saving on research and development and on other areas which make it more competitive and the dominant car company.

Companies like GM should be in the forefront of lobbing for universal health care. Their taxes would go up, but they would shed the burden of paying healthcare costs. They would stop having to extend labor negotiations due to differences in how much the employer and the employee are each going to contribute to healthcare costs. The bottom line is it will save money by having the country go to universal healthcare and those savings can go to becoming more competitive against their international competitors.

Some companies have already determined that healthcare costs are so high that they cannot remain competitive if they pay the high cost. Wal-Mart is famous for avoiding having to pay healthcare costs for its employees. Among the ways it does this is keeping employees’ hours lower than is required for eligibility for healthcare coverage. Wal-Mart also provides its employees information as to how to get onto public assistance for healthcare coverage, which raises the cost to the government for having Wal-Mart continue to grow and place its box stores in communities. Wal-Mart engages in a number of other cost cutting methodologies, but not paying healthcare costs is one major one which saves it a substantial amount of money.

To avoid making our companies uncompetitive to international competition or having companies circumvent providing healthcare coverage all together, the United States needs to implement a universal healthcare system. The cost will fall onto the shoulders of everyone: Corporations and individuals. The tax increase will likely be more than offset by the savings gained from ceasing to pay for healthcare coverage.

The political party that claims it is pro-business should be the party that is out front on this issue. The country will not be competitive in the world marketplace until universal healthcare is instituted and failure to be competitive is bad for the economy.