TW: I believe oil economy is one of the top two or three threats to the US' global power. It is also a massively de-stablizing force internationally. Governments whose revenues are derived primarily from oil (e.g. Saudi Arabia, Iran, Venezuela, Alaska etc.) are generally non-democratic, corruption ridden and unstable. Intuitively one would think transferring hundreds of billions of dollars to the coffers of the previously mentioned plus Russia, Nigeria, Libya etc. would be asking for trouble. Paying for them for their oil so that they can re-cycle the dollars into ownership of our assets is not a dynamic I regard as ideal.
When the numbers reach the trillion level we go from a problem to a potential catastrophe. Alternatively one would hope we could develop alternatives whereby the struggling US economy could be enhanced by the development of its own energy industries. I generally adhere to the all other approach (some drilling, some nukes, some coal, some conservation, some wind/solar etc.). Understanding "all other" can be co-opted into the easiest path of just "drill baby drill" which would solve little but potentially divert public opinion from the need to the rest of "all other".
Former Sec. of State Henry Kissinger (and trust me Palin has no frigging idea what he really thinks one way or the other) and former top Reagan economic advisor Martin Feldstein recently outlined the challenges in a NYT editorial.
From the IHT/NYT:
"The tripling in the price of oil from $30 a barrel in 2001 to more than $100 today represents the largest transfer of wealth in human history. The 13 OPEC members alone are expected to earn more than $1 trillion...The monopoly suppliers will continue to have strong market power until the consuming nations sharply reduce their dependence on imported oil and develop a political strategy to counter political manipulation of the oil market or the use of the vast OPEC surpluses to blackmail the economies or individual industries of the consuming nations. Failing such efforts, the high and rising price of oil will produce profound political and economic consequences...In the advanced industrial countries, the high price of energy will reduce the standard of living, sustain an unfavorable balance of payments and lead to increasing inflationary pressures.
First, a portion of these vast oil revenues are passed on to radical groups throughout the Islamic world, such as Hezbollah, through public and private so-called foundations. The madrassas that preach jihad are largely financed by oil money.
Second, revenues from high oil prices are recycled into the rapidly growing sovereign wealth funds of the OPEC countries, which invest these surpluses in the economies of the developed countries. Abu Dhabi has more than $1 trillion of investable funds.
The explosive rise in oil prices has tempted more assertive policies. Resources are being shifted from passive investments in U.S. and European government bonds to corporate equities and to the outright purchase of American and European businesses. As these new investments multiply, they may tempt the creditors into a growing influence over Western economies."
http://www.iht.com/articles/2008/09/15/opinion/edkissinger.php
No comments:
Post a Comment