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Living in Denial…Still

Like the crew of the Titanic, Obama and the Democrats speed headlong toward disaster, undeterred by the warning signs. They continue to be confident that the American economy is somehow “unsinkable” no matter how reckless and destructive their financial policies. Denial seems to be part of their DNA.

With the nation almost $14 TRILLION in debt, and in the middle of a recession, the Democrat majority piled on another $1.7 Trillion in new spending – with money that we don’t have. This is precisely like the average family reacting to a drop in their income by running up their credit card bills to the max.

But unlike your family, the Federal government can do one thing you cannot do – they can print money. Call it any euphemism that you prefer, like “quantitative easing,” the result is the same: inflation – your dollars are worth less. The result? Higher oil prices, for one. Oil is pegged to the U.S. dollar, so any reduction in the value of the dollar means an increase in the number of dollars required to purchase a barrel of oil.

And don’t rag on “Big Oil” – 67% of oil production comes from hundreds of tiny companies with fewer than 100 employees. More importantly, since EXXON, BP, SHELL, and all the rest of the companies that refine and sell gasoline have to pay more to oil producing nations for their raw material, their COST goes up, which pushes up prices at the pump.

Naturally, Obama and the Democrats will blame the oil companies. Rest assured they (and their accomplices in the media) will point to “record oil company profits” as “proof” of their “gouging.” Lost in the discussion will be that EXXON makes only about 9 cents on a gallon of gas, and that, while profits are a big number in DOLLARS (“billions in profits!) this is only because they sell TRILLIONS of galons of gasoline.

But EXXON and similar companies operate at a 10% net profit on every dollar of gross sales. To put this into perspective, Coca-Cola routinely posts profits in the 21% range – TWICE the profitality of the oil companies. Is Coca-Cola “gouging” their customers?

We must also remember that the latest increases in oil prices are on top of the already inflated prices due to the Democrats and their ongoing war against drilling and refining. From drilling prohibitions to the inability of gasoline producers to get permits to build refineries (we haven’t built a new one in more than 30 years) Democrats have made sure America is more and more dependent on the very foreign sources they claim to oppose.

Just this week, Shell Oil announced that it has scrapped plans to drill off the North coast of Alaska. Why? Because they have been unable to get a permit to drill – the increasingly dictatorial bureaucrats at the EPA have decided that to do so “might” affect “the people of the area.” What people, you might ask. Well, it seems they are referring to a tiny village (250 people) that is 70 MILES away from the site. Insanity.

But, hey, Happy “Earth Day” everyone.

The same goes for food prices – with no change in supply or demand, printing more money will ultimately force your local food store to pay more for the same vegetables they bought a month ago. You cannot hide from it. And as long as we tolerate the spending binge, financed by a printing press, food prices will continue to escalate.

And this affect is in addition to the pressure on food prices that other, equally misguided policies have already produced, corn-based Ethanol being the biggest disaster. America is (or was) the “King of Corn” producing 40% of the world supply. But government-subsidized Ethanol production has caused our most productive farmland to be shifted from food corn to FUEL CORN, causing food corn prices to skyrocket.

This may have been great for farmers and big agribuisinesses – they have been posting “record profits” far higher than any oil company. But as a result, any food product that contains corn has increased in price – and there are thousands, like cereals, tortillas, corn oil, corn sweeteners, and on and on. Highly corn-dependent lifestock production is also affected – beef and pork prices have been steadily climbing.

At the root of all these bad policies is the psychological phenomenon known as “denial” – refusing to confront the
reality of a situation in spite of overwhelming evidence. Actions have consequences, most of them predictable if one uses common sense. But in their quest to turn America into a socialist (and “green”) utopia, the ever more leftist Democrats continue to deny reality. They simply refuse to acknowledge the obvious result of their own disastrous policies.

Sadly, denialis not limited to politicians. Too many of us, especially those so-called “moderate” Americans, are also in denial. They’re just sure that “everything will eventually sort itself out” and that “the government will never go broke” – it’s just that “those extremists are trying to scare us.” These are the same people who refuse to admit that Social Security, Medicare, and other such “entitlements” simply cannot be maintained. Instead, they naively go along with the Democrats: “just raise the taxes on those rich guys” and everything will be fine.

Denial is perhaps the most self-destructive human trait of all. In the 1930′s, many German Jews saw the gathering storm – and they left. But the reality is that most Jews did not leave – they continued to deny reality right up to the time that the SS knocked on their doors. Ironically, it was the “intelligencia” – the highly educated – who stayed. They convinced themselves that, as professors, doctors, and professionals, surely THEY would not be affected. How wrong they were.

Americans are little different. I spite of all the mounting evidence that liberal “free stuff for everyone” policies over the last forty years have lead inexorably to the situation in which we now find ourselves, even conservatives don’t want to have to “bite the bullet” and cut spending money that we do not have – especially if it means they might have to give up their own little piece of the govenment pie. It’s just easier to deny the obvious, and blame everything on scapegoats like “Big Oil” and “Wall Street.”

But continuing to live in denial will only result in our undoing.

John Caile

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