The Democrats present the Trojan Drilling Bill, the stock market is in major jitters, investors look for safe places to put their money. Hence oil, gold/silver/precious metals go up. Pretty simple.

With the Democrat's no-drill oil bill, prohibiting drilling in most areas, there will be little change in our domestic oil supply. If we don't get a real Drill Here bill, we will be dependent on foreign oil for years and paying higher prices. It is supply and demand...the price will go up.

Anyone wondering if the Democrats are trying to create such an oil price crisis that the government must come in and take that industry over too? I am hard pressed to explain the Democrat's stance any other way.

The other factor involved in precious metal and oil price increases is the fall of the dollar. It had been improving since about July. But the Freddie and Fannie / financials bail outs cause the United States to expand the money supply. That is inflationary, resulting in the value of the individual dollar to fall. Again, it is supply and demand.

From the Financial Times: The Short View: Oil and the Dollar: 

By late morning in New York on Monday, the price of oil had climbed by 20 per cent in barely five days and scarcely anyone had noticed. Then it went into overdrive, hitting $130 at one point before settling at $120.92. Last Tuesday, it traded at $90.51 – a swing of 44 per cent from bottom to top.

This had little to do with the supply of and demand for oil and everything to do with the fallout from the “Paulson plan” – the proposal to risk $700bn of US public money in a bail-out of toxic securities held by banks.

Oil rose as doubts surfaced about the plan.

When people are nervous, they look for tangible products to invest in. 

A key variable is the dollar. So far, it has fallen in response to the possible huge rise in the US deficit. The markets seem to have gone a step further and assumed that this step will be be inflationary and cause financial assets to lose value.

In that situation, the thing to do was to head for real assets, led by oil, although other commodities, led by silver, also had a strong day. Unfortunately for the Paulson plan, the inverse relationship between oil and the dollar is one of the few financial constants to have survived the past few days.

I heard this morning that oil settled down to about $108/barrel in Asia. People are nervous worldwide. The US money supply is expanded beyond thin.

The last thing we need is another check writing spree by the government in the form of a Democrat 2nd $50billion stimulus package or a $1,000 energy rebate based on a windfall profit tax to oil companies as Obama is touting. (That tax would be passed onto consumers, making oil prices higher.)

Even the Federal Government can only print so much money if it is to be worth more than the paper it is printed on! 

Brookfield District 7 Info meeting, Wed., Sept. 24, 2-3pm or 6:30-7:30pm City Clerk Kris Schmidt will be in attendance to answer questions or concerns regarding recent news about the Van Hollen lawsuit against the state elections authority.

Please, comment content should relate to the subject of the post. Although I try to respond to many, do not interpret my lack of a response as agreement.

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  Americans for Prosperity, a nationwide grassroots group, was to have held a rally/press conference as part of their Brewer game Taxpayer Tailgate outing tomorrow. The rally was to raise awareness "about the serious threat global warming alarmism poses to our prosperity, including legislation being considered by Congress that would more than double gasoline prices."

But the Brewer's ballpark decided they did not want anything political going on in their parking lot and so they said NO to the hot air balloon rides and Hot Air Tour, the name of the rally. They will not put any of that in writing, but the hot air balloon permit was canceled just the same.

Of course the stadium still wants you to come to the tailgate at 3pm and game at 6pm though. (Translation, you can still come spend your money here.) 

Americans for Prosperity isn't about to let this snag squelch their rally though. They are moving the rally to their headquarters parking lot at 1126 S. 70th Street (located behind the K-mart shopping center in the old Allis Chalmers buildings on Washington and 70th.) It shouldn't be too hard to find, the 7 story high hot air balloon should mark the spot!

The actual Press Conference/Political event and free balloon rides (Hot Air Tour) are scheduled from 2:30 - 3pm, but you can gather and schmooze starting at 1:30pm.

Congressman Jim Sensenbrenner will be there, so will radio's Vicki McKenna, County Executive Scott Walker, State Representative Jim Ott (Meteorologist), AFP-WI State Director Mark Block, AFP Director of Communications Annie Patnaude, and Phil Williamson of  Fight Back Wisconsin. Williamson will be circulating his domestic oil drilling and oil refinery petition, or you may sign online.

After the rally, they will head over to the Taxpayer Tailgate at the stadium.

Email any questions to Brenda Baas at brenda.baas@afphq.org or call 414-475-2975.

As for coming to the ballpark and spending money there, well, if I had already purchased my Brewer ticket, I would probably be inclined to NOT buy a thing!

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Oil companies have made a lot of money and some in Washington think they should get a bigger cut. The Senate recently tried to snatch some of those profits with their attempt to resurrect the Windfall Profits Tax bill. Thankfully, the Senate Republicans stopped that piece of legislation ...for now.

I am sure we will see that tax tried again. After all, Obama is campaigning, "I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills," the Illinois senator said.

Generally, Democrats seem to think that oil companies just do not have the right to keep their profits. They don't seem to have that same aversion to other corporations' profits though. I heard on Jay Weber recently that oil companies made about 7.5% in profits.

How does that compare to other industry profits? Weber said Banking made 20%, Pharmaceuticals 18%, Insurance 11%, and Beverage/Tobacco 9.4%. So oil companies 7.5% is excessive and these other industries are not? Does it seem there is a double standard here?

Weeks ago, Sean Hannity broke down the profit per gallon of gas that oil companies received. We're paying around $4/gal. Oil companies get about $0.08/gal. Taxes on a gallon are around $0.19/gal for Fed. and State, I think. Again, oil companies seem to be getting the lesser amount.

How much profit does an oil company like Exxon make? Mark Perry, on Seeking Alpha, a Stock Market Opinion/Analysis site shows that last year they had pre-tax profits of $70.61 billion. Wow, that is a lot of money!

Some of you might be muttering to yourself how unfair it is that these filthy rich companies are making all the money and WE (via taxes to government) should be getting some of it.

But here is a figure the news media does not talk about very much; the amount Exxon pays in taxes. Perry includes an interesting chart showing the profits vs. taxes: $40.6 billion in after tax profits, $30 billion in taxes. Exxon averaged over the past 3 years to pay $27 billion in taxes each year. He compares that to regular taxpayers contribution to the IRS:

According to IRS data for 2004, the most recent year available:

Total number of tax returns: 130 million

Number of Tax Returns for the Bottom 50%: 65 million

Adjusted Gross Income for the Bottom 50%: $922 billion

Total Income Tax Paid by the Bottom 50%: $27.4 billion

Conclusion: In other words, just one corporation (Exxon Mobil) pays as much in taxes ($27 billion) annually as the entire bottom 50% of individual taxpayers, which is 65,000,000 people! Further, the tax rate for the bottom 50% is only 3% of adjusted gross income ($27.4 billion / $922 billion), and the tax rate for Exxon was 41% in 2006 ($67.4 billion in taxable income, $27.9 billion in taxes).

This was not enough for the Senate Democrats (and a few Republicans) though. They wanted more. 

No doubt about it. We have high energy prices and future prices don't look any better, but taxing oil companies more will not lower the price at the pump!  Would you want to work harder to increase production only to have more of your profit taken away?

FYI:  Neighborhood Information Meeting tonight for Fire Station #3 move 

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The Windfall Profits Tax Bill was blocked by the Republicans Tuesday:

GOP senators shoved aside the Democratic proposal, arguing that punishing Big Oil won't do a thing to lower the $4-a-gallon-price of gasoline that is sending economic waves across the country. High prices at the pump are threatening everything from summer vacations to Meals on Wheels deliveries to the elderly. ...

..."In the middle of what some are calling the biggest energy shock in a generation ... they proposed as a solution, of all things, a windfall profits tax," Republican leader Mitch McConnell of Kentucky chided the Democrats. He called their proposal "a gimmick" that would not lower gasoline prices and only hold back domestic oil production.

"The American people are clamoring for relief at the pump," agreed Sen. Pete Domenici, R-N.M., but "they will get exactly what they don't want" under the Democrats' plan — higher prices and an increase in oil imports.

The Democrat supporters said this tax differed from the 1980s version because "oil companies could avoid the tax by using their 'windfall' to push alternative energy programs or refinery expansions*." Senate Republicans weren't buying that argument though and so the Democrats couldn't get the 60 votes needed to stop the GOP filibuster.

Wow! The Senate Republicans were on a roll yesterday; they went on to block a 2nd bill: 

Shortly after the oil tax vote, Republicans blocked a second proposal that would extend tax breaks that have either expired or are scheduled to end this year for wind, solar and other alternative energy development, and for the promotion of energy efficiency and conservation. Again Democrats couldn't get the 60 votes to overcome a GOP filibuster.

This on the heels of Friday's block of the Cap-and-Trade bill. Maybe the Republicans are finally getting the hint that most Americans don't want all these taxes on corporations that get passed on to us?

Do I dare hope that the GOP would push for more domestic drilling and building additional US oil refineries? That would make a positive difference in future energy supply/costs.

But the bigger picture issue with the Windfall Profits Tax is, whose money is it anyway? Don't corporations, and individuals for that matter, have a right to make money?

What gives the government the right to arbitrarily say, you are making too much, we are going to take more of that. That is not a Windfall Profits Tax, that is socialism.

*Correct me if I'm wrong, but don't oil companies face opposition whenever they want to build new oil refineries? 

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Barack Obama would prefer that most people think he is John Kennedy the 2nd. But where Kennedy said, "Ask not what your country can do for you; ask what you can do for your country", Obama seems to have an opposite campaign theme: Don't do anything for yourself that the government could do for you.

No, to me, Obama more closely resembles former President Jimmy Carter. They both favor negotiating with terrorists and both seem anti-semitic. They also both share the same opinion on windfall profit taxes for oil companies.

"'SPEAKING OF WINDFALL PROFITS',  Barack Obama said yesterday [Monday] that he wants to impose a "windfall profits tax" on American oil companies. This is a stupid idea, unless you want to reduce the supply of oil and thereby increase prices even further." Barack Obama said Monday:

"I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills," the Illinois senator said.

That same Reuters piece mentioned that "CRITICS SAY TAX DOES NOT WORK": (My emphasis)

Critics of the windfall profits tax say it proved to be counterproductive when it was last put in place in the United States in 1980 during the final year of President Jimmy Carter's administration.

Those critics say the measure prompted oil companies to cut back on domestic production while failing to raise as much in tax revenue as lawmakers expected. It was repealed in 1988 during the Reagan administration.

What's that saying about history? Those who fail to learn from history are doomed to repeat it? That's  Change we can't afford:  

“At a time when American families face record gas and energy prices, Barack Obama has called for even higher energy taxes. At the center of Barack Obama’s plan is a scheme last tried under Jimmy Carter that only increased our dependence on foreign oil. We shouldn’t expect anything more from a politician who has consistently voted to increase taxes on energy, including natural gas purchases in Illinois. Barack Obama doesn’t understand the American economy and that’s change we just can’t afford.”

BARACK OBAMA’S PLAN TO INCREASE ENERGY TAXES WILL HURT AMERICAN CONSUMERS (from the McCain campaign.)

Barack Obama is trying to call a McCain presidency George Bush's 3rd term. Tuesday I heard John McCain fire back that an Obama presidency would be Carter's 2nd term.

I don't believe McCain would be a 3rd Bush term, but if we are going to have a rerun...I know which presidency I would pick.

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Just in case you missed this from the weekend news, the Sunday Journal reported in its Congress Following the Vote column,

GLOBAL WARMING FILIBUSTER  Voting 48-36, the Senate on Friday failed to reach 60 votes needed to end a Republican filibuster against an updated version of global warming bill. Democratic leaders then pulled the bill from the floor, perhaps for the remainder of the year. A yes vote was to advance the bill. McCain and Obama did not vote.

No surprise here, Feingold and Kohl voted YES to advance the bill. (So much for their sentiment that they will keep my thoughts in mind as the global warming debate moves forward.)

We are off the hook for right now. I would bet Senate offices were bombarded with negative calls and emails on cap-and-trade. I would also bet that this bill will return either in its entirety or in bits and pieces like the amnesty bills have returned. They are hoping for a time when we aren't paying attention! 

Past Post: Cap-and-Trade? Maybe it should be called Cap-and-RAID!

More reading:

George Will's Cap-And-Trade: A Devious Tax Plan

Good chart of key players and terms explained at end: Senate taking up key climate-change bill 

The Heritage Foundation's Morning Bell: Carbon Capping in Bizarro World 

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Sunday we returned from a few days in Dearborn Michigan touring the Henry Ford Museum, Greenfield Village, and The Rouge Ford Factory. The Rouge Factory Tour was new to us. There was Bill Ford, the great grandson of Henry, up on the BIG screen telling us how Ford created this new Rouge factory to be friendly to the environment.

Much like our proposed Fountain Brook Crossing, The Rouge Ford Factory* has Gone Green. The roof is a garden roof, planted with sedum plants to absorb the rain water. They are increasing plantings wherever possible on the grounds; nets are strung up on the factory exterior for climbing vines.

Even their parking lots are water permeable. No more run-off. The paving material looks like asphalt but is a porous material that has sand and gravel below. The guide said that the water that runs through the pavement is filtered and very clean. It requires vacuuming twice a year to keep pores open and calcium chloride must be used instead of sodium chloride in winter.  The porous pavement is more expensive to install and maintain but lasts twice as long as conventional asphalt. Plus, no detention pond is needed...and it's good for the environment.

It seemed everything about The Rouge Factory was good for the environment or good for the employees. You could watch some of the assembly line in action. The workers were poetry in motion each doing their specific little jobs. While they are always under the time constraint of the moving line, it did not seem any were really hustling to keep up the pace. Some workers were on the cell phone, playing a hand held game, or even had newspapers there to catch a snippet of an article.

I asked a tour guide how much money these people made. She did not know specifically but said from what she read in the paper, it was around $20.00 per hour for new hires. Workers with more seniority were higher.

Another guide told us that Ford recently closed 2 other factories in other states, I believe, and now consolidated all of the work here at The Rouge. That sounded efficient. The Rouge's specialty was trucks**. Wonder where the other cars are made?

Monday's Investor's Business Daily answered part of that question: Movin' To Mexico!:  (My emphasis)

Ford's investment of $3 billion in two auto plants near Mexico City is the largest foreign company investment ever in Mexico. As oil prices soar and new climate-change rules are readied in Washington, Ford must shift from its reliance on trucks and SUVs to lighter, more energy-efficient vehicles.

This should be something that workers in Michigan and other Midwestern states with decades of automaking experience should excel at doing. Instead, Ford and other automakers are pushing more and more investment abroad — especially to Mexico.

The editorial cites reasons for an auto sales slump and the US losing jobs--mainly the UAW forcing higher wages and benefits--but increasing climate change rules and higher oil prices aren't helping the industry.

Like a coyote caught in a trap, U.S. automakers have been desperately gnawing off a leg to escape certain death. They're closing plants and slashing jobs in Michigan, Ohio and other U.S. union havens, in favor of non-union, foreign places. Like Mexico and China.

Meanwhile, foreign companies have no problem making cars here. They do it in the non-union South, where the UAW is weak.

So foreign companies can get around our high wages by being non-union, but even they and their products are subject to U.S. emission standards for factories and cars.

You would think that with our ailing auto industry our government would be doing all it could to help encourage instead of hinder. Yet Washington continues to hamper oil exploration and increase auto emission standards (i.e. new diesel emissions will be cleaner than intake air.) 

Add to automakers woes, both U.S. and foreign made here, the latest millstone around the neck: Cap-and-Trade, and I think we have the recipe for outsourcing more industry of all kinds.

Ford may have greened up its Dearborn plant and created an ideal work environment, but if more industry follows suit in exporting jobs to countries that don't care about workers or the environment, what good paying jobs will be left in America?

This was written before Tuesday's post Kohl, Feingold, and Doyle's reaction to GM closing Janesville plant

Related articles: Toyota workers in Kentucky plant made more than UAW members last year

More handwriting on the wall, GM closing Janesville assembly plant by 2010 

*The Rouge Factory was named for the Rouge River in Dearborn. The banks of the river were red clay, hence the name Rouge (French for red). 

**A guide told us this was the last year they would be making Mercury trucks. 

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Last night I heard Senator Inhofe (R-Oklahoma) on the Mark Levin Show.  They were discussing S. 2191, the Senate "Lieberman/Warner Global Warming Bill and the disastrous effect this would have not on just the country as a whole, but the individual." (My emphasis throughout post.)

Wall Street Journal referred to Cap-and-Trade as Cap and Spend

As the Senate opens debate on its mammoth carbon regulation program this week, the phrase of the hour is "cap and trade." This sounds innocuous enough. But anyone who looks at the legislative details will quickly see that a better description is cap and spend. This is easily the largest income redistribution scheme since the income tax.

The Washington Post said, Just Call It "Cap-and-Tax" 

"...One of the bad ways [to control greenhouse gas] is cap-and-trade. Unfortunately, it's the darling of environmental groups and their political allies.

The chief political virtue of cap-and-trade -- a complex scheme to reduce greenhouse gases -- is its complexity. This allows its environmental supporters to shape public perceptions in essentially deceptive ways. Cap-and-trade would act as a tax, but it's not described as a tax. It would regulate economic activity, but it's promoted as a "free market" mechanism. Finally, it would trigger a tidal wave of influence-peddling, as lobbyists scrambled to exploit the system for different industries and localities. This would undermine whatever abstract advantages the system has.

...Call this "environmental pork," and it would just be a start. The program's potential to confer subsidies and preferential treatment would stimulate a lobbying frenzy. Think of today's farm programs -- and multiply by 10.

After listening to Senator Inhofe, I think we could also refer to it as Cap-and-Raid! If it passes, it will raid every worker in America's wallet!

Senator Inhofe said, Senator Barbara Boxer insists this is not a tax bill. But if you have looked into the bill itself and at the linked articles, it is difficult to understand how this could not be considered a tax bill.

Inhofe then quickly listed some points to ponder. He mentioned the Wall Street Journal referring to it as the most extensive reorganization since the 1930s. He called it worse than the Kyoto Treaty for the economy. Cap-and-Trade will need 45 more Big Government Bureaucracies to enforce the standards.

Using Boxer's figures, Inhofe pointed out that Cap-and-Trade would collect $6.7 Trillion dollars from industry (those costs will be passed onto us!). The maximum rebate to customers is $2.5 Trillion dollars. Do the math: That means $4.2 Trillion goes where?

That sounds like a tax to me!

He went on to remind us that the Democrats have killed every domestic drilling bill. The US relies on coal for 53% of all of its electricity production. Cap-and-Trade will tax coal fired electricity production. Consider that China "cranks out a new coal electric plant" every 3 days (?). (I think he said 3 days, which fits with this - certainly between India and China it would be true.)

Manufacturing jobs will go where there is (cheap) energy/power, Inhofe said. This is also what Congressman Sensenbrenner talked about at his Town Hall Meeting when he called Cap-and-Trade "Catastrophic for Wisconsin". I would add that manufacturing jobs will also go where environmental regulations are more lax.

Senator Inhofe suggested people take a look at Liberman-Warner Opposition Resource Center; Impacts of Costly Climate Bill Exposed  It is chock full of quotes, links and articles.

The Senate is debating this bill this week. While some say the bill will not pass, as you know, once the foot is in the door, the issue will not go away.  Considering all 3 Presidential candidates support the concept of Global Warming, I would just say, the bill probably won't pass...yet.

Our Senators' response to my emails: Not much hope of a NO vote here--unless they feel the heat from constituents.

This is important! Please contact them both: Senator Kohl (Phone: (414) 297-4451, (202) 224-5653) and Senator  Feingold (Office of Senator Russ Feingold | 202/224-5323) and let them know what you think about this bill.

More reading:

George Will's Cap-And-Trade: A Devious Tax Plan

Good chart of key players and terms explained at end: Senate taking up key climate-change bill 

The Heritage Foundation's Morning Bell: Carbon Capping in Bizarro World 

Links:

Like most people, I am watching the gasoline prices rise and wondering how high they will go by summer travel time.

A temporary moratorium on the federal gas tax is now a topic of the presidential campaign. Obama is against, Clinton is for--if the oil companies pay for it via a wind fall profits tax (that just means they will pass it onto us), and I believe McCain is just for the moratorium with no charge to the oil companies.

This morning I caught a bit of Vicki McKenna's radio show and some callers thought the 18.5 cent/gallon tax moratorium would influence what their family did this summer. 

So far, the higher gasoline prices have not seemed to alter people's summer travel plans. At least it appears that way to me. We are planning another family pilgrimage to Yellowstone National Park this summer. I made the mistake of making reservations too late, however. (Who would think mid September of 2008 was too late?) I got all the days I wanted except ONE and have been trying to get that date at Old Faithful budget cabins ever since.

I call the reservation line almost every day and check the website. Nothing so far for my location and day. But today I noticed for the first time that there were 3 other locations listed as an alternative. Coincidence or are people starting to bail out on their plans because of gas prices?

Only time will tell.

(Another wrinkle might be that because of the low value of the dollar, foreigners are snatching up any American vacancies. There are a lot of Asians who come to west coast American National Parks on vacation.) 

Of course I am hoping that gas prices will level off by the time we leave. They did last year at this time when the price per gallon was an unprecedented $3.29/gal or so.

It is almost a tradition that we are on vacation during a gas crisis. I was out in Colorado in 1973 and never hit a shortage or line. My husband and I were on a 7,000 mile, 5 1/2 week National Park camping trip odyssey during 1979's gas crunch--no lines, high prices, or troubles then. We were in California during the Hurricane Katrina gas price spike too. I guess we aren't going to let, gulp, $4.00+/gal stop us this summer either*.

Will the price of gas or the moratorium change your plans this summer?

* I can rationalize the gas cost somewhat because we are there for a long enough time to justify the cost of getting there. The price per gallon is usually lower once out of Wisconsin. Plus, flying and renting a car is still much more expensive than driving to this location.
 

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