The government response to high gas prices is turning humorous.

Last week President Bush traveled to the Middle East to try and convince the Saudi’s, among others, to start producing more oil to help fend off even higher-yet oil prices.

Their answer: No dice.

Good for them.

President Bush knew the outcome of this little field trip to play the “whoa is we” card before he even boarded Air Force One.  After all, Bush is an oil man at heart, and a business man by trade.  Not only that, he has some very astute financial and economic gurus that know exactly what’s driving the price of oil.

But he’s also a politician.

The President is also a politician, and he’s still looking for your vote.  Not directly, but in a round about way, the Republican party.

His trip to the Mid East ended how those of us who favor capitalism and understand the basics of economic forces knew it would.  However, the end result lets the President say: “Well folks, I tried.”

Bring on the lawsuits!

It gets even better!  Today, the House voted to approve legislation to let the Justice Department sue the members of OPEC for withholding oil and conspiring to drive up oil prices.

“This bill guarantees that oil prices will reflect supply and demand economic rules, instead of wildly speculative and perhaps illegal activities,” said Democratic Rep. Steve Kagen of Wisconsin, who sponsored the legislation.

Right.  Because that’s how it works. Here you have the worlds most developed economy, one that stimulates the global economy, that is forced to import oil to keep the economy liquid, and they’re going to sue the very countries that import that oil?

What’s interesting is that the White House has threatened to veto this bill.  Why?  Because they know better! It’s one thing to make a visit to ask politely to help us out of a jam.  It’s another thing to try and levy baseless financial and legal claims against other countries who control the flow rate to our oil addicted economy.

It’s the dollar, stupid!

The value of the almighty dollar (or lack thereof) is driving the value of crude.  Think about it.  If your national currency is the Euro, and the U.S. dollar is dirt cheap compared to the Euro, and crude is priced in U.S. dollars, aren’t you going to buy (or import) as much crude as you can regardless of whether you need it or not?

Don’t you think this is why China is developing their own strategic petroleum reserve, and European countries are expanding on their existing ones?  It’s not because there is a shortage of oil, it’s because the stuff is cheap because it’s traded in U.S. dollars.

These latest moves by our politicians is nothing more than a farce in an election year to say “We see you hurting out there, and we’re trying our hardest to fix this… but that stinking no good oil man in the Oval Office is working against us all, and he’s the one who’s truly hurting you!  Vote Obama!

Another example of our feel good, try hard government trying to understand and remedy a free market.

Economics, Energy, Politics Economics, free market, oil, OPEC

Back in January, General Motors Vice Chairman Bob Lutz called global warming a “total crock of s—.” when talking to a group of reporters in Texas.

Of course, this completely outraged those who are trying to change global economic policy, and in effect requiring billions of dollars in capital spending, based on a measly 100 years of climate data.

Naturally, no one in global warming party is standing up to defend him, and many ignorant to the world of science have called for his removal from GM. Well, Bob fired back:

In a posting on his GM blog on Thursday, Lutz said those “spewing virtual vitriol” at him for minimizing the threat of climate change were “missing the big picture.”

“What they should be doing in earnest is forming opinions, not about me but about GM and what this company is doing that is … hugely beneficial to the causes they so enthusiastically claim to support,” he said in a posting titled, “Talk About a Crock.” -Source

At least he didn’t try to take back his words.

I still view the global warming farce as an effort to strong arm economic policy based on a minuscule data set. Again, no one can explain why we’ve been through several ice ages, only to follow up with a warming in climate, yet we strive to force every corporation in America to “go green” in an effort to cool things down a bit.

Meanwhile, China, India and the rest of the growing economic globe still hold the theory of a free market at heart.

To top it all off, there is now debate on whether or not to “teach” global warming in schools. My tax dollars going to instill a “global” consensus in our kids based on bogus data…

Global Warming Hoax

Economics, Energy Bob Lutz, free market, Global Warming

It was bound to happen (again). Today Verizon Wireless revealed new plans to offer a flat-rate unlimited calling plan. They say it is an effort to attract high end customers, which may be true, but I see it as a commoditization of the wireless industry.

The plan will cost $99 per month and offer up unlimited calling to anyone in the United States. Interestingly enough, AT&T trumped Verizon by announcing a similar deal for $0.99 per month more, but also eliminating any additional roaming charges.

It is clear to me that cell phones are becoming a commodity just like the old fashion predecessor, the land line, and that the economy of scale and competition is going to force prices down.

The revenue is going to shift from voice usage to data usage, which is good news for guys like me who just want voice capability.

“Voice is the foundation of our business, and will be an integral part of our offer,” said Mike Lanman, chief marketing officer for Verizon Wireless. “Data is clearly emerging as an increasing contributor…to our revenue stream.” -Source

I think this is a telling sign of how a free market will drive down prices. I started to see a glimpse of this when Verizon offered me a lower rate on an unpublicized plan that more closely matches my usage. They didn’t want me to leave the store and head off to a competitor, so they knocked $10 off my bill just to keep me happy…

Cell phone service will only get cheaper…

Business, Technology cell phone, free market, Technology, Verizon Wireless