From WSJ Political Diary 9/9/08

There are two explanations for the lower oil price. The dollar has been rising relative to other currencies and gold. The near 20% fall in gold from its $1,000 peak earlier this year has driven down the price of oil, just as the collapse of the dollar relative to gold from 2001-2007 explains about 90% of the rise in the oil price over that period.

The other reason oil prices are drifting downward is consumption of oil has fallen sharply. Energy Information Administration data show that demand in the first half of 2008 dropped by 800,000 barrels a day. This is the sharpest drop in 26 years. Demand for oil is proving to be more price elastic in the short and medium term than experts previously thought. We don’t need costly government energy conservation programs when oil prices are high. Markets work in energy and if you don’t believe that, go into a Hummer dealership if you can still find one.

I proposed to a member of our city council that the city make “Hybrid Only” parking zones in downtown Macon. It would encourage alternative fuels, and lead other cities by example. It would costs nothing; I am sure the Toyota dealership would support it, and it could even be a revenue producer. When we get some all electric vehicles, perhaps GA Power can provide special parking with charging stations.

Dropping in the polls on the energy issue Obama succumbs to desperate populism. Let’s just give all the poor people a thousand dollars, and let’s make the rich oil companies pay for it.

The last time this was tried was during George McGovern’s campaign, not exactly a success story worth emulating. McGovern wanted to deposit $2,000 in a savings account for every American.

Back then most voters knew there was no free lunch, and rejected such blatant socialistic populism. Why not give everybody $4,000 and why limit it to just Americans. Why not just give it to everyone in the world?

Are we to give Obama’s fuel rebate to all the poor people or just the poor people with cars? Do the poor people who took the bus to conserve fuel also get a rebate? Do they have to give part of it to the bus company? If four poor people car pool do all four get the $1,000 or do they get $250 each? If a poor person sold their car and moved close enough to work to either walk or take a bike, do they still get the same rebate?

For years the environmental liberals have wished for fuel prices to move higher to discourage consumption and to create demands for alternative fuels. Did they not then think that this may impact poor people. They did not care of prices were higher as long as it was driven higher by intentional government taxes; they only became upset when private corporations made more money.

They did not seem upset at the money the foreign nationals made.

But higher prices has reduced consumption. Americans are driving less. And the result is that fuel taxes paid to the government has also dropped. This must really piss them off.

Pelosi refuses to let a debate on the floor to consider drilling shore. Her resposne to the energy crisis is too adjourn Congress, in effect doing nothing.

The Americans are very receptive to getting away from foreign oil. They will accept alternative fuels. They would much rather drill for domestic sources than buy from sources that are out to kill us. They will accept an energy plan that has risks rather than accept the status quo.

Pelosi reigns like Marie Antoinette and adjourns with no plan. This could hurt the Democrats at the Congressional elections as well as in their race to the Whte House.

HKO