There’s a lot of talk right now about the skyrocketing oil and gas prices. With the summer blends kicking in and the flooding in Iowa jeopardizing the corn crops, most people will be paying $4 a gallon for the majority of the summer. Who is to blame for the high pump prices?

Republicans and Big Oil?

The Democrats, liberals, and Greens say this. And they point to the oil companies and say “Windfall profits! Price gouging! Bush! Cheney! Enron! Evil!” These people are still pushing the theory that Bush & Cheney are doing this to “make their buddies rich”. I offer you this: they’re already rich. They’ve been rich for years. It’s not like they were poor and all of a sudden they’re millionaires. “But they’re doing this to get more rich!” 

Does anyone believe this anymore? Seriously?

They’re rich because — like Bill Gates and Doug Daft — they are the top-tier management of global corporations with shareholders who demand profits. They are rich because they are responsible for managing the exploration for, and the drilling, refining, and delivery of, a global resource. These “greedy oil companies” employ tens of thousands of people worldwide, and operate on a profit margin hovering around 8%, which is about 1/3 that of CocaCola and Pepsi. They make a lot of money because every around the world buys their product, so they sell a lot of it.

As fast food companies have blossomed, so have the sales of Coke, but Doug Daft isn’t hauled in front of Congress to testify about CocaCola’s record profits last year, earned on about a 28% profit margin. And I don’t hear you complaining that a medium Coke that used to cost 30 cents is now a buck-twenty-five. Why not?

So if Big Oil, Bush, and Cheney are not to blame, who is? (more…)

Via email, we received a PDF of a document entitled “Swine Industry Crisis”, originally prepared by Dallas Hockman, who is with the National Pork Producers Council. In it, there are some startling revelations. Namely, that while the U.S. is the largest producer and exporter of pork in the world, the industry is headed for hard times due to high feed prices. This is a direct result of the use of corn for ethanol.

The end result?

According to the document, pork producers are estimated to lose a total of $3.3 billion, while consumers will suffer a loss of $8 billion due to reduced pork consumption and increased prices.

The document is attached below for your perusal. It is only 6 pages and a quick read. It’s highly recommended that you do.

Ethanol is a substandard, inefficient fuel, and far from the Holy Grail of fuel sources. The continued use and federal subsidization of ethanol production will only further deepen the economic problems we are currently facing, both at the pump and in the grocery store.

Actions to take: First, use The Mailbox to contact your representatives. Send them the document. Tell them that further use for corn as fuel — and government subsidies that encourage ethanol production — is disastrous for both our economy, and the availability and affordability of our food. Second, most states require that gasoline that contains ethanol must be clearly stated as such on the pump. So contact the offices of the major petroleum manufacturers who add ethanol to their gasoline, such as BP. Tell them that you will not purchase their products if they contain ethanol, and will give your business to filling stations that only sell ethanol-free blends.

Document: National Pork Producers Council report: Swine Industry Crisis

According to an article in the Wall Street Journal, taxpayers across the nation will foot the bill for federally-backed hurricane insurance.

Democrats in Congress, with the backing of insurance industry giants Allstate and State Farm, want to nationalize “reinsurance”, or insurance bought by insurance companies. This reinsurance would protect the insurance companies from “catastrophic losses” in the event of a natural disaster.

The legislation passed the House with a bipartisan vote of 258-155.

While it could save Florida homeowners as much as $500 annually in insurance premiums, the cost for the proposed legislation would be born by all taxpayers, even ones in states that are far from hurricane, earthquake, mudslide, and wildfire zones.

The end result of such legislation has two consequences:

1. With the lowered insurance premiums, people are more likely to do stupid things like build in hurricane zones and flood zones. For example, New Orleans bears witness to the catastrophic results of the National Flood Insurance Program. Such programs increase the likelihood that when a natural disaster occurs, there will be loss of property and life.
2. People far removed from the disaster zone, having already paid for federal agencies like FEMA with their tax dollars, are now getting taxed further to fund this kind of legislation. As a result they have less disposable income, which means in the event of  natural disaster they’re less likely to donate money to charities like the Red Cross and the Salvation Army.

Capitalism works. We need to remember this. Capitalism keeps people from doing stupid things because it makes the cost proportional to the risk. People are less likely to engage in risky behavior if there’s no one there to help pick up the pieces in the event something bad happens. This saves money, and in the case of natural disasters, it saves lives.

If people want to build in hurricane and flood zones, they should have the liberty to do so. No one should prevent them from it. But they should also bear the burden of financial responsibility on their own shoulders, not on ours.

Action to take: use The Mailbox to write your representatives. Tell them to vote no on  H.R.3355, the Homeowners’ Defense Act of 2007.