Sunday, May 01, 2011
High gas prices? Blame the budget deficit and weak dollar
Dan Froomkin has an interesting perspective if the Huffington Post, “Your Pain, Their Gain: How high gas prices impoverish the many while enriching the few,” link here.
He covers the gamut: higher share prices for oil companies help most pension funds, so there is a “good side”. He talks about the role of speculators, which at some point has to break. But the main point, he says, is that oil company executives can enrich themselves by buying back their own stock.
ExxonMobil gives its own spin with a corporate blog posting April 28 by Ken Cohen, “ExxonMobil’s earnings: the real story you won’t hear in Washington,” link here
Exxon talks about the relatively small contribution of US purchases of gasoline, but their most compelling point is the weaker US dollar, driven by deficits and US debt, which raises the international price of all commodities.
So visit the article by Lori Montgomery on the front page of the Washington Post, “Running on the red: How the US, on the road to surplus, detoured to massive debt,” link here. And she says, it was largely due to reckless tax cuts for the rich, reducing revenues. She doesn’t even blame the defense spending after 9/11 or entitlements, with all their creative accounting.
Picture: Mine, from my DVD, of an anti-tax rally in St Paul, MN in 2002.