Sunday, June 29, 2008

McCain Has an Energy Plan

Who's to blame for our high energy prices? Last week Obama placed all the blame of the greedy oil companies and oil speculators in the market. McCain spread the blame around to the speculators and the politicians. The problem is that our politicians are too busy passing blame. We need leadership in our government that will tackle the problem. The problem is not speculators because they work the market both ways. Right now there is a supply problem and our government should be looking for ways to increase supply and stop looking for someone to blame. The blame lies squarely on our politicians who have done nothing to increase supplies.

McCain has developed a coherent energy plan. McCain would like to repeal the ban on offshore drilling. McCain supports increasing refining capabilities and is open to reconsider opening the Arctic National Wildlife Refuge. McCain would invest in our future energy needs. McCain wants to develop nuclear power plants to produce much of our energy requirements. McCain's energy plan will reduce prices tomorrow. Now Obama says McCain is flip flopping on ANWR. While it may be true McCain is looking to increase production in the US it is out of necessity. Not political necessity but rather the necessity to move our country forward. McCain is looking out for the best interest of Americans in his energy plan. Obama is looking out for the best interest of himself.

Speculators understand the free market and the laws of supply and demand. They understand that there is a global supply issue. There is not enough oil being produced to meet demands. There is a price where oil demands will meet the supply demands. This is called the equilibrium point. As long as the market has a shortage of supply the speculators will continue pushing the price up searching for this equilibrium point. This is how investment strategies work. Just like businesses are in business to make money; investors are in the market to make money. Speculators will continue bidding the price up because they are making money. The oil bubble is very similar to the housing market. The low interest rates allowed more people to get home mortgage loans. Not only were more people qualified; they were qualified at higher amounts than necessary. This caused a run on houses. There was not enough houses on the market (Supply) to meet the number of buyers (Demand). The price of homes increased almost 100% in two years. The housing speculators kept the market going and the prices kept going up. However, when the payments became due, the prices crumbled. The same will happen to oil. Increase supply and the market will crumble. By the way, I never heard Obama say we shoul punish the speculators in the housing markets. No he wants the taxpayers to pay for the "unscrupulous speculators". He wants Americans to bail out both lenders and borrowers who invested over their heads and lost.

Obama is wrong to say it will take 10 years to reduce oil prices. The promise of increased oil supplies will chase the speculators. They will quit bidding the oil prices up if they know supply will increase. Obama does not understand this. It is easier to pass the blame than it is to develop a coherent energy plan. Obama's energy plan is to play the victim. Obama believes we are a victim of speculators. Obama believes we have fallen prey to the oil companies. Obama believes we are complacent in our habits. Obama's plan is to punish oil companies, punish investors, and punish the American people. Obama wants increased taxes on oil company profits. This appeases the liberal left because they want to be a victim. They always punish the opportunists. Obama plans a $1,000 tax credit for the middle class. This is another gimmick. What Obama doesn't tell you is that at these prices it cost twice as much to heat our homes this winter as it did last year. The $1,000 tax credit will not even put a dent into the total increase in oil costs. Obama is on record saying he believes in higher energy costs. We need to change our habits in his opinion.

McCain has a coherent energy plan. Obama's energy plan is smoke and mirrors. There is nothing substantive in his plan. Obama's plan is empty rhetoric just like his entire campaign.


Don Meaker said...

I am glad you wrote this.

Serena said...


This breaks down pretty simply:

McCain is listening to what Americans want.

Obama is not.

This is the best example of what an Obama dictatorship will be like.