I’ve always considered the 1979 OPEC quadrupling of oil prices to have been a political and economic assault on Carter and Democrats. I believe that GHW Bush and Racist Reagan arranged for the help with OPEC. They caused a recession during that election cycle, which hurt the party in power.
We’ll see if a similar assault works again. BTW, given it appears American oil companies are complicit, are they doing ANYTHING ILLEGAL?
. . .
The salvation of this country for the foreseeable future depends on the turnout of women voters who’ve sat out earlier elections. Times up to act, and stay active. Please.
Women have been the majority electorate since 1920, time to claim the power!
I sure like your rants. They are fact based, not always all the facts, but you admit that, welcome comments, and some of your commenters - well I often feel like I'm in a graduate level course learning cool stuff.
Anyway, some additional facts. First, oil companies don't set gasoline prices. The refining industry was spun off decades ago and sets gasoline prices. Oil companies just sell oil.
OK, I know what you are going to ask, who owns the refining companies.
The oil companies that spun them off own them.
The largest refinery in the USA is owned by Saudi Aramco. Yep, Saudi Aramco.
Six companies do almost all US refining - so regardless who owns them, all the decision makers can, and almost certainly do, play golf together.
You may not know this but the oil patch is really friendly, executives of competing companies get together for social interaction outside the work place every day. When I worked in Houston, I had no time to golf, but if I had time, I could golf all day every day at no cost with friends. When Engineers collude, however, we do it come up with a better way to accomplish a technical task. We developed navigation techniques the US Navy didn't believe were possible.
Oh, and the reason Russia and Saudi Arabia don't mind the spectre of rising oil prices - their countries haven't yet been affected by flooding and other problems due to climate change. Again, only thinking about themselves, no concern for others. Very Trump-like.
I will use the information in this article to write letters and op-eds to small rural media outlets to see if we can inform rural and small media audiences of the real situation. I don't think corporate media is going to pick this up.
I had a live conference with my investment advisors yesterday. They ignore politics.
Short version, we are not in a recession, as the actual definition is 2 down quarters, which we have, DURING a sustained downward spiral, which is not happening.
The reason for negative GDP is interesting. Did you know GDP includes INVENTORY? In the rush to restock and crank up the economic engine, they bought too much. Inventories are being reduces, which counts as negative GDP.
Corporate profits, earnings, cash on hand, debt, all are at the best numbers in US history, not recently, THE BEST SINCE 1925.
I could go on, but there simply is nothing indicating recession, and everything indicating growth.
Powell's move is political, but it's needed. The economy simply works better with the Fed rate about 4%.
MBS wants to help the KSA. I don't know about this "cut", but historically OPEC "targets" are what they are already achieving. The KSA's oldest fields are declining and they want to add new fields in a manner that replaces existing flow rather than needing new processing infrastructure. It's likely they are running late getting the new reservoirs finished.
OPEC cannot get too aggressive because there are HUNDREDS of oil sellers and more being added all the time.
Putin probably has that goal, but I think right now he's just firing scattershot in all directions as fast as he can. The Kremlin has to be close to replacing him
Same with Italy. Frown about the Fascist but smile when you realize Italian government average 18 months between replacement. Average, she could be gone by Christmas. I think I remember one Berlusconi administration that lasted 30 days.
For some months I have thought that Jerome Powell's sole intent had nothing to do with stopping inflation. Inflation was his tool. When I heard a few weeks ago that Powell and the Fed were doubling and tripling their purchase of bonds, there was no question about it. I wish he would quit with the interest rates BS already, but I am deeply concerned that he won't. He has the power, and he looks like he's going to use it to the end. I'm sorry.
At this point, justice would be throwing a bag over Putin's head, transporting him to Kyiv, and dropping him naked in Independence Square.
Enough thoughts about the dark-side. We will free ourselves from fossil fuels through invention. It is happening, and that is why Putin, Saudi Arabia, and the industry are going to make it hurt. Worst of all, the gougers and the greedy will help them.
It should be called a "repression" in this case, not a depression. It fits perfectly with what the Republicans do to voters' rights.
I urge you to regularly visit cleantechnica.com. Battery technology of every kind is being invented by the smartest people in the world, and they WANT to share it. With or without this "repression", our planet will be electrified with cleaner resources. Getting there won't be easy and the result won't be perfect.
Go green and they lose. Boomers may not live to see it, but we goddamn well started the movement.
Does anyone know if Biden or anyone in his administration reads these posts? I don't understand how these plain and simple realities are not being acted upon. Well, I do... because the monopolies and oligopolies own the Democrats as much as the Republicans, and there are no Democrats in power like Lyndon Johnson, or even Jimmy Carter, anymore.
Right on all fronts, once again. Still unclear why the U.S. continues to call Saudi Arabia and the U.A.E. "allies". Do you consider Trump a U.S. "ally" also, after what he's tried to do to democracy? Saudi Arabia and the U.A.E. are in the same mould as Trump - they only think about themselves.
My intuition is that the U.S. and N.A.T.O. countries need to do all in their power to end the war ASAP. Putin is fine with dragging it out, killing more and more pawns. We're seeing what this is doing to the world economy. End this debacle now.
Facts rarely move people to passionate involvement, nor do they last long enough to influence voting decisions months later. That's just human nature and basic psychology. https://ponly.com/psychology-facts/
The combination of global media ownership concentration, a huge army of well-paid lobbyists and an election system where our representatives are beholden to the very foxes they are tasked with monitoring and disciplining has set up a Fail-Fail System that We-The-Voters have refused to acknowledge CAN NOT BE FIXED. https://www.investopedia.com/stock-analysis/021815/worlds-top-ten-media-companies-dis-cmcsa-fox.aspx
Mr. Hartman's current analysis of the origin of our current high global inflation, including the Reset that doubled most basic supplies following the Covid Deception, are NOT the results of lack of supplies and too low manufacturing capacity: The inflation primarily is caused by large global corporate cartels gaming the entire global consumer system! And, our US and EU legislators are sitting tight, expressing outrage but keep their eagle eyes on the basket of IOUs they have all received in political contributions. They can't vote against their Masters without acknowledging that the corporate media will drive them out of their Kingly & Queenly seats in the world's legislative bodies. https://en.wikipedia.org/wiki/Publicly_funded_elections
Then make a financial decision to budget multiple $25 donations to support Democracy, Vote-from-Home and Independent Media groups. The faithful Tithe to their church bodies, and all of us really need to mass our multiple $25 donations to overcome the corporate lobby budgets. One Hundred US voters donating $25 each every month to core groups will be a physical lever that will lift many Hopes and Dreams into the sphere of political reality (https://www.statista.com/statistics/257337/total-lobbying-spending-in-the-us/):
These Ten links may call for a budgeting choice; it can be $10/month or $25. But, for these inspired groups to be able to serve all our well-being into the future - they need faithful and reliable giving.
Really, we are adults, and it's long overdue that we stop whining, protesting and venting into the echo chambers of people who already agree with us. We might consider committing to a focused strategy to save our democracies for our children - before it's simply too late.
Mr. Hartman citations:
In an unregulated capitalist system, the first imperative of business is to eliminate competition. This can be done by offering a better product or the same product at a lower price. It can be accomplished through innovation and invention. It can be accomplished by better marketing and promotion.
But the easiest way to eliminate competition is to create monopolies. As I lay out in The Hidden History of Monopolies (forward by Ralph Nader), this is the path that American companies had chosen for them by Ronald Reagan when, in 1983, he directed the DOJ, SEC, and FTC to essentially stop enforcing our nation’s antitrust laws.
The immediate result was an explosion of mergers and acquisitions, what people old enough to remember the era knew as the “M&A Mania.” Michael Milken, Chainsaw Al Dunlap, Michael Douglas in the movie Wall Street were all singing the same tune: smash together all the medium-sized companies into giant behemoths that would never again have to worry about real or meaningful competition.
By the turn of the century we’d achieved a state of oligopoly, a situation where every industry in American was finally dominated by a handful of companies that worked together like cartels to monopolize markets.
There is another and earlier parallel here. The relatively easy money of the 1920s (the Fed rate was between 4 and 5%), was fueled in part by a Ponzi scheme of German reparation payments for World War I. At that time American bankers loaned the money to Germany, which was then paid back to America. The result was Germany’s hyperinflation of 1923 and the collapse of its economy. In response, France and Belgium occupied Germany’s industrial heart, the Ruhr, creating further chaos. While Germany struggled back into line it could never catch up. Then after the stock market collapse of 1929 the Fed in effect raised the interest rate by not dropping it as much as money was tightening. In addition, a Republican Congress passed the Smoot-Hawley Tariff. This raised import rates on the theory it would protect American business. Instead world trade virtually stopped, making a bad situation far worse.
The point of all this is that simplistic one sided solutions, like raising interest rates or demanding payments, will not solve complex multidimensional problems. But it seems most people do not understand economics and will, as my father said, “Vote their pocketbook” without understanding why prices are going up. And that, as Thom says, is exactly the point. So long as much of the world still runs on oil, multinational corporations are beyond any single government’s effective control, and short-term political considerations replace long term structural needs, groups who crave power will always play games with other peoples’ money.
Great post, I had to read it twice and want to read it twice more. One comment on human nature that supports your position, and which I fought all my career. I made complex systems work for a living. They called me when the installation was losing $400 a minute. I once flew two days, and took 5 minutes to fix a problem - I literally turned on the power switch. The local boss asked me to "look around a few days", so we told town we got it patched up and would have it done in a week. Making people look foolish helps nobody, plus we all have "dumb days"
Anyway, the reason for my success is I'd go in and ask "what has been done in the last six months?". 90% of the time, someone had modified one subsystem without viewing it as part of the whole, and installed a "time bomb" that would crash everything when the right circumstances occurred.
The problem is we humans love firefighters and hate fire safety inspectors. It's a field ape hangover, love the chimp who attacks against impossible odds and call the one survivor a coward for NOT attacking against impossible odds.
Great example! When I was learning to fly I was told to "wind my watch". In other words, when any emergency short of a catastrophic failure occurs, don't do anything for a few seconds except think about what is happening and then make small changes, preferably starting with undoing the last thing that you did. Sometimes just taking your hands off the controls (or at least sitting still) can let things stabilize too, as fighting a problem can exacerbate it. Anyway, you're right. We Americans in particular seem to love to fix things but spend little time examining how to prevent problems--descriptions, not explanations. So we build sea walls rather than try to control the causes of climate change. Or, as one Mexican physician who moved to the U.S. said, "In Mexico I learned to treat people, in this country I learned to treat diseases."
The educational ministry could use your expertise - they keep trying to "fix" things by introducing new curriculum, which only seems to exacerbate the problems.
The problem with education is they have taken education away from the educators. The educators are the victim of their own success. When I was a kid, education didn't pay well and thus was considered "women's work" and thus didn't attract political meddlers.
Today, all across the USA, curriculums and pretty much everything is set by local political officers who ignore the advice of professional educators.
The kids today have twice as much history to learn as my father had. They have more of everything to learn.
Well isn't that the way many bureaucracies operate? They have to keep finding problems to fix so that their work is justified. With education it seems that the same ideas get recirculated about once a generation. The kids can't read well? Create another test for them. That way it looks like they are "doing something about it". But in general the feds do this all the time, just look at the endless maddening tweaking of the tax code. See, Congress is great at this sort of thing. Pass another law or have the agencies write another rule and that will solve the situation. (It rarely does.)
I’ve always considered the 1979 OPEC quadrupling of oil prices to have been a political and economic assault on Carter and Democrats. I believe that GHW Bush and Racist Reagan arranged for the help with OPEC. They caused a recession during that election cycle, which hurt the party in power.
We’ll see if a similar assault works again. BTW, given it appears American oil companies are complicit, are they doing ANYTHING ILLEGAL?
. . .
The salvation of this country for the foreseeable future depends on the turnout of women voters who’ve sat out earlier elections. Times up to act, and stay active. Please.
Women have been the majority electorate since 1920, time to claim the power!
I sure like your rants. They are fact based, not always all the facts, but you admit that, welcome comments, and some of your commenters - well I often feel like I'm in a graduate level course learning cool stuff.
Anyway, some additional facts. First, oil companies don't set gasoline prices. The refining industry was spun off decades ago and sets gasoline prices. Oil companies just sell oil.
OK, I know what you are going to ask, who owns the refining companies.
The oil companies that spun them off own them.
The largest refinery in the USA is owned by Saudi Aramco. Yep, Saudi Aramco.
Six companies do almost all US refining - so regardless who owns them, all the decision makers can, and almost certainly do, play golf together.
You may not know this but the oil patch is really friendly, executives of competing companies get together for social interaction outside the work place every day. When I worked in Houston, I had no time to golf, but if I had time, I could golf all day every day at no cost with friends. When Engineers collude, however, we do it come up with a better way to accomplish a technical task. We developed navigation techniques the US Navy didn't believe were possible.
Oh, and the reason Russia and Saudi Arabia don't mind the spectre of rising oil prices - their countries haven't yet been affected by flooding and other problems due to climate change. Again, only thinking about themselves, no concern for others. Very Trump-like.
I will use the information in this article to write letters and op-eds to small rural media outlets to see if we can inform rural and small media audiences of the real situation. I don't think corporate media is going to pick this up.
Thom,
I had a live conference with my investment advisors yesterday. They ignore politics.
Short version, we are not in a recession, as the actual definition is 2 down quarters, which we have, DURING a sustained downward spiral, which is not happening.
The reason for negative GDP is interesting. Did you know GDP includes INVENTORY? In the rush to restock and crank up the economic engine, they bought too much. Inventories are being reduces, which counts as negative GDP.
Corporate profits, earnings, cash on hand, debt, all are at the best numbers in US history, not recently, THE BEST SINCE 1925.
I could go on, but there simply is nothing indicating recession, and everything indicating growth.
Powell's move is political, but it's needed. The economy simply works better with the Fed rate about 4%.
MBS wants to help the KSA. I don't know about this "cut", but historically OPEC "targets" are what they are already achieving. The KSA's oldest fields are declining and they want to add new fields in a manner that replaces existing flow rather than needing new processing infrastructure. It's likely they are running late getting the new reservoirs finished.
OPEC cannot get too aggressive because there are HUNDREDS of oil sellers and more being added all the time.
Putin probably has that goal, but I think right now he's just firing scattershot in all directions as fast as he can. The Kremlin has to be close to replacing him
Same with Italy. Frown about the Fascist but smile when you realize Italian government average 18 months between replacement. Average, she could be gone by Christmas. I think I remember one Berlusconi administration that lasted 30 days.
For some months I have thought that Jerome Powell's sole intent had nothing to do with stopping inflation. Inflation was his tool. When I heard a few weeks ago that Powell and the Fed were doubling and tripling their purchase of bonds, there was no question about it. I wish he would quit with the interest rates BS already, but I am deeply concerned that he won't. He has the power, and he looks like he's going to use it to the end. I'm sorry.
At this point, justice would be throwing a bag over Putin's head, transporting him to Kyiv, and dropping him naked in Independence Square.
Enough thoughts about the dark-side. We will free ourselves from fossil fuels through invention. It is happening, and that is why Putin, Saudi Arabia, and the industry are going to make it hurt. Worst of all, the gougers and the greedy will help them.
It should be called a "repression" in this case, not a depression. It fits perfectly with what the Republicans do to voters' rights.
I urge you to regularly visit cleantechnica.com. Battery technology of every kind is being invented by the smartest people in the world, and they WANT to share it. With or without this "repression", our planet will be electrified with cleaner resources. Getting there won't be easy and the result won't be perfect.
Go green and they lose. Boomers may not live to see it, but we goddamn well started the movement.
Does anyone know if Biden or anyone in his administration reads these posts? I don't understand how these plain and simple realities are not being acted upon. Well, I do... because the monopolies and oligopolies own the Democrats as much as the Republicans, and there are no Democrats in power like Lyndon Johnson, or even Jimmy Carter, anymore.
Right on all fronts, once again. Still unclear why the U.S. continues to call Saudi Arabia and the U.A.E. "allies". Do you consider Trump a U.S. "ally" also, after what he's tried to do to democracy? Saudi Arabia and the U.A.E. are in the same mould as Trump - they only think about themselves.
My intuition is that the U.S. and N.A.T.O. countries need to do all in their power to end the war ASAP. Putin is fine with dragging it out, killing more and more pawns. We're seeing what this is doing to the world economy. End this debacle now.
Facts rarely move people to passionate involvement, nor do they last long enough to influence voting decisions months later. That's just human nature and basic psychology. https://ponly.com/psychology-facts/
The combination of global media ownership concentration, a huge army of well-paid lobbyists and an election system where our representatives are beholden to the very foxes they are tasked with monitoring and disciplining has set up a Fail-Fail System that We-The-Voters have refused to acknowledge CAN NOT BE FIXED. https://www.investopedia.com/stock-analysis/021815/worlds-top-ten-media-companies-dis-cmcsa-fox.aspx
Mr. Hartman's current analysis of the origin of our current high global inflation, including the Reset that doubled most basic supplies following the Covid Deception, are NOT the results of lack of supplies and too low manufacturing capacity: The inflation primarily is caused by large global corporate cartels gaming the entire global consumer system! And, our US and EU legislators are sitting tight, expressing outrage but keep their eagle eyes on the basket of IOUs they have all received in political contributions. They can't vote against their Masters without acknowledging that the corporate media will drive them out of their Kingly & Queenly seats in the world's legislative bodies. https://en.wikipedia.org/wiki/Publicly_funded_elections
Thus, while we allow ourselves to continue to be distracted and manipulated, we might all make a 4" x 4" sign to be placed above our computers and phones: REMEMBER - JUST SAY NO! DON'T VOTE FOR ANY INCUMBENT POLITICIAN. https://www.argusobserver.com/opinion/a-rationale-for-never-voting-for-the-incumbent/article_bf5dd874-c54d-11e5-9e0c-bfd34d62b4da.html
Then make a financial decision to budget multiple $25 donations to support Democracy, Vote-from-Home and Independent Media groups. The faithful Tithe to their church bodies, and all of us really need to mass our multiple $25 donations to overcome the corporate lobby budgets. One Hundred US voters donating $25 each every month to core groups will be a physical lever that will lift many Hopes and Dreams into the sphere of political reality (https://www.statista.com/statistics/257337/total-lobbying-spending-in-the-us/):
Consider:
1. https://www.commondreams.org/
2. https://voteathome.org/
3. https://www.votebymail.com/vote-by-mail-resources
4. https://www.nolabels.org/
5. https://www.trustworthymedia.org/list-of-independent-media/
6. https://www.lwv.org/
7. https://thewashingtonstandard.com/
8. https://childrenshealthdefense.org/press-release/robert-f-kennedy-jr-and-childrens-health-defense-call-for-congressional-investigation-of-covid-origin/
9. https://www.ucsusa.org/
10. https://makemynewspaper.com/starting-a-small-town-community-newspaper
These Ten links may call for a budgeting choice; it can be $10/month or $25. But, for these inspired groups to be able to serve all our well-being into the future - they need faithful and reliable giving.
Really, we are adults, and it's long overdue that we stop whining, protesting and venting into the echo chambers of people who already agree with us. We might consider committing to a focused strategy to save our democracies for our children - before it's simply too late.
Mr. Hartman citations:
In an unregulated capitalist system, the first imperative of business is to eliminate competition. This can be done by offering a better product or the same product at a lower price. It can be accomplished through innovation and invention. It can be accomplished by better marketing and promotion.
But the easiest way to eliminate competition is to create monopolies. As I lay out in The Hidden History of Monopolies (forward by Ralph Nader), this is the path that American companies had chosen for them by Ronald Reagan when, in 1983, he directed the DOJ, SEC, and FTC to essentially stop enforcing our nation’s antitrust laws.
The immediate result was an explosion of mergers and acquisitions, what people old enough to remember the era knew as the “M&A Mania.” Michael Milken, Chainsaw Al Dunlap, Michael Douglas in the movie Wall Street were all singing the same tune: smash together all the medium-sized companies into giant behemoths that would never again have to worry about real or meaningful competition.
By the turn of the century we’d achieved a state of oligopoly, a situation where every industry in American was finally dominated by a handful of companies that worked together like cartels to monopolize markets.
There is another and earlier parallel here. The relatively easy money of the 1920s (the Fed rate was between 4 and 5%), was fueled in part by a Ponzi scheme of German reparation payments for World War I. At that time American bankers loaned the money to Germany, which was then paid back to America. The result was Germany’s hyperinflation of 1923 and the collapse of its economy. In response, France and Belgium occupied Germany’s industrial heart, the Ruhr, creating further chaos. While Germany struggled back into line it could never catch up. Then after the stock market collapse of 1929 the Fed in effect raised the interest rate by not dropping it as much as money was tightening. In addition, a Republican Congress passed the Smoot-Hawley Tariff. This raised import rates on the theory it would protect American business. Instead world trade virtually stopped, making a bad situation far worse.
The point of all this is that simplistic one sided solutions, like raising interest rates or demanding payments, will not solve complex multidimensional problems. But it seems most people do not understand economics and will, as my father said, “Vote their pocketbook” without understanding why prices are going up. And that, as Thom says, is exactly the point. So long as much of the world still runs on oil, multinational corporations are beyond any single government’s effective control, and short-term political considerations replace long term structural needs, groups who crave power will always play games with other peoples’ money.
Great post, I had to read it twice and want to read it twice more. One comment on human nature that supports your position, and which I fought all my career. I made complex systems work for a living. They called me when the installation was losing $400 a minute. I once flew two days, and took 5 minutes to fix a problem - I literally turned on the power switch. The local boss asked me to "look around a few days", so we told town we got it patched up and would have it done in a week. Making people look foolish helps nobody, plus we all have "dumb days"
Anyway, the reason for my success is I'd go in and ask "what has been done in the last six months?". 90% of the time, someone had modified one subsystem without viewing it as part of the whole, and installed a "time bomb" that would crash everything when the right circumstances occurred.
The problem is we humans love firefighters and hate fire safety inspectors. It's a field ape hangover, love the chimp who attacks against impossible odds and call the one survivor a coward for NOT attacking against impossible odds.
Great example! When I was learning to fly I was told to "wind my watch". In other words, when any emergency short of a catastrophic failure occurs, don't do anything for a few seconds except think about what is happening and then make small changes, preferably starting with undoing the last thing that you did. Sometimes just taking your hands off the controls (or at least sitting still) can let things stabilize too, as fighting a problem can exacerbate it. Anyway, you're right. We Americans in particular seem to love to fix things but spend little time examining how to prevent problems--descriptions, not explanations. So we build sea walls rather than try to control the causes of climate change. Or, as one Mexican physician who moved to the U.S. said, "In Mexico I learned to treat people, in this country I learned to treat diseases."
Brilliant post. I think I learn as much from posters here as from Thom, and I'm not slamming Thom.
The educational ministry could use your expertise - they keep trying to "fix" things by introducing new curriculum, which only seems to exacerbate the problems.
The problem with education is they have taken education away from the educators. The educators are the victim of their own success. When I was a kid, education didn't pay well and thus was considered "women's work" and thus didn't attract political meddlers.
Today, all across the USA, curriculums and pretty much everything is set by local political officers who ignore the advice of professional educators.
The kids today have twice as much history to learn as my father had. They have more of everything to learn.
We need educators back in charge of education.
Well isn't that the way many bureaucracies operate? They have to keep finding problems to fix so that their work is justified. With education it seems that the same ideas get recirculated about once a generation. The kids can't read well? Create another test for them. That way it looks like they are "doing something about it". But in general the feds do this all the time, just look at the endless maddening tweaking of the tax code. See, Congress is great at this sort of thing. Pass another law or have the agencies write another rule and that will solve the situation. (It rarely does.)