FRONT PAGE CONTRIBUTOR
As The Saudi Tanks Roll To Bahrain
“Politically, Ken Salazar had to begin to relieve some of the pressure that gas prices were exerting on the administration,” said Kish. “He was running out of excuses and with Congress no longer rubber-stamping or ignoring his anti-energy policies, he had to issue at least one permit to placate the Hill.”
Secretary of The Interior, Ken Salazar, has long advocated on behalf of the continued moratorium on drilling for oil in the Gulf of Mexico. He has argued that more time was needed to insure these operations could be done safely. He has questioned the wisdom of rushing back into drilling before the completion of advanced research on ocean containment technology designed to mitigate the impact of future spill events similar to what befell British Petroleum earlier in President Obama’s administration.
Others less sympathetic to Salazar’s environmental concerns point to statements by President Obama and Energy Secretary Chu that indicate that both men believe that America would be a better country if gasoline would just cost more. These regrettable statements have now come back to haunt the Obama Administration.
As I blogged a few days ago, oil prices (discounting the recent Libya Bump) have risen 133% since the Glorious Crowning of Emperor Obama. Gasoline prices have gone up 70.4% from Obama’s inauguration to Year 2, Ab Obama Condita.
Concatenating the two statements I cited above and the massive boost in energy prices over the last two years, would make it easy to formulate theories of Barack Obama’s malicious deviousness. I wish it were that simple. If only President Obama really could sit down with his Mini-Me Vice-President Biden and develop a strategy for making all the bad things go away. It could turn into the Marvel Comics Presidency.
Sadly, President Obama, is worse than evil. He suffers from the Peter Principal and Peter Pan Syndrome in vicious synonymy. He has neither the professional experience in national policy, nor the intellectual honesty to deal in fairness with adverse facts. Data that contraindicates his ideological fantasies that command and control economics can work simply doesn’t exist in his magical world. In Obamaland, political oratory marks the very day on which the levels of the oceans begin to recede.
Thus, the Big, Bad Real World has done the following unfair things to Mr. Obama’s fantasies. Investors have reacted to the low interest rates being championed by the world’s central banks by speculating heavily in commodities. This movement has made food, fuel, and strategic industrial materials more expensive. The CPI, an average consumer market basket for the US, does not indicate people are suffering too much. Given what I’ve seen at local supermarkets and gasoline pumps, I’d have to argue that the BLS has a remarkably curious definition of an average American.
This increase in prices has caused pain domestically, but grievous injury abroad. India, for example, allocates 47% of their CPI to food purchases. The average East Indian consumer is eight times more vulnerable to food price spikes than the average American. A similar state of affairs is true in Egypt, Tunisia and Libya. The average consumer in China suffers far worse than the average American; but considerably less than the average Libyan.
All of this data was well-known and readily available to Mr. Chu, Mr. Salazar, Mr. Biden and Mr. Obama. Yet the recent spate of governmental overthrows spanning Northern Africa has actually taken these brilliant men of Harvard by shock and surprise. How could these crazy foreigners act so differently than how Emperor Obama had decreed? The 3am phone calls now arrive in high enough frequency to require a switchboard and an answering service that probably operates somewhere in Mumbai.
Just this morning, as Secretary Salazar finally begins to relent on drilling in the Gulf of Mexico, Saudi Arabia’s despotic neighbors in Bahrain seem to be “next” in the Arab World’s rolling caravan of revolution. As demonstrators demand that the King of Bahrain abdicate his throne, the Saudis have sent tanks to crush the rebellion.
The Saudi stock market, normally ebullient when oil prices cross $100, is not exactly doing the Tennessee Waltz. They’ve lost 7% of their value and are crashing hard. Oman, also in Saudi Arabia’s backyard, has the armies out breaking hearts and breaking heads as anti-government demonstrators have refused to disperse.
We have a leafy, green background of domestic political anger and the potential for a massive disruption of imported oil that normally keeps the lights on the trucks rolling in the United States. Secretary Salazar finally decides that today is the very day, that deepwater drilling operations in the Gulf of Mexico are truly safe anew. He perhaps heard from Secretary Chu, who now really isn’t as fond of $8/Gal gasoline as he was two years ago. We Chu spoke, the idea seemed like the stuff of a speculative fiction novel. He may well have realized that sometimes the worst things happen to us in life when we get exactly what we ask for.
Correlation does not mandate causation, and sometimes a cigar is really just a cigar. However, as gasoline prices increase, the American 4th Quarter GDP gets revised downward, and the Saudi tanks roll in Bahrain, I can’t help but wonder how safe Secretary Salazar really believes Noble Energy’s proposed drilling operations will be. Perhaps he thinks they are safer than BP, or maybe they are merely safer than Sec. Chu’s proposed $8/gal gasoline prices.