Thursday’s surprise release of 60 million barrels of crude reserves is not about keeping oil consumers well supplied. It’s about chasing oil speculators out of the market. And it seems to be working.
“This is the straw that breaks the camel’s back — this is the tipping point,” said Fadel Gheit, oil analyst for Oppenheimer, a leading investment bank. “The speculators will have to change their positions. Instead of betting on higher prices they have to bet on lower prices.”
In a coordinated move, U.S. and European energy officials announced they would release 60 million barrels of oil from strategic stockpiles over the next month after OPEC failed this month to agree on an increase in production. Those extra OPEC barrels were supposed to replace crude output lost when civil war in Libya shut down production.
“This supply disruption has been underway for some time and its effect has become more pronounced as it has continued,” said the International Energy Agency in a statement. It said expectations were that Libyan production would remain off the market for the rest of 2011. “Greater tightness in the oil market threatens to undermine the fragile global economic recovery,” it said.
But independent analysts said the move was aimed more at bursting the speculative bubble rather than substantially improving market supply. Lowering oil prices further would help boost the weak U.S. economy at a time when both the Fed’s monetary stimulus and the government’s spending stimulus are winding down.
Based on the market’s immediate response, the plan seems to be working. News of the oil release sent gasoline tumbling 14 cents a gallon in the futures markets. That’s the equivalent of about $56 million a day in savings at the gas pump — or about $20 billion a year, according to Peter Beutel, and oil analyst a Cameron Hanover. In New York trading crude oil was down $4.01 to $91.40 a barrel, more than 20 percent below peak levels of $114 hit in early May.
Child poverty is rising sharply in Texas. But while Texas kids go hungry, Gov. Rick Perry is living a lavish lifestyle on the taxpayers’ dime.
Since 2000 (the year Perry became governor) the number of Texas children living in poverty has climbed 17 percent, even as the state has gutted spending on programs for kids. Currently, an astonishing 1 in 4 Texas children lives in poverty. The infant mortality rate is also up 10 percent since 2000.
Like George W. Bush before him, Perry demands steep sacrifices from ordinary working people—while living a luxurious taxpayer-funded lifestyle.
Take Perry’s mansion, for example. While Texas is facing an eye-popping $27 billion deficit, Perry is spending $9,000 per month in taxpayer’s money to live in one of Austin’s most upscale estates.
When the Texas governor’s mansion was damaged in a 2008 fire, Perry looked around for another place to live. With the state in financial meltdown, one might think Perry would have shown a little restraint in picking his new digs.
But no such luck. In fact, as of May 2010, Perry, according to AP, had already spent nearly $600,000 in tax dollars living in a lavish 5-bedroom, 7-bathroom sprawling rental mansion the previous two years. Continue Reading »
A Senate subcommittee held a hearing this week on funding the existing Older Americans Act, including a $2 billion investment to prevent senior hunger. The panel, led by Sen. Bernie Sanders (I-Vt.), explored how the government can actually save money through these investments.
It’s really not that complicated. By spending money to prevent hunger and malnutrition among the elderly, Americans can save on health care and nursing home costs.
Sen. Rand Paul (R-Ky.), labeled “America’s Dumbest Senator” by some, was flabbergasted. “It’s curious that only in Washington can you spend $2 billion and claim that you’re saving money,” he said. “The idea or notion that spending money in Washington somehow is saving money really flies past most of the taxpayers.”
I think Sanders and Sen. Al Franken (D-Minn.) made this pretty clear, but I’m nevertheless fascinated by the ways in which the right is completely unfamiliar with notion of “penny wise, pound foolish.”
In the case of the Older Americans Act, the government spends a little money up front, and in the process, doesn’t have to spend more money later on more expensive care. Rand Paul thinks this, on a conceptual level, is ridiculous. I think Rand Paul, on any level, is ridiculous.
Understanding this just requires a little bit of thought. If we cut spending on volcano monitoring and tsunami warnings, we save a little money on maintenance, but pay a lot of money on damage repairs after disaster strikes. If we cut spending on food safety, we save a little money on inspection, but pay a lot of money on health care costs when consumers get sick. If we cut spending for the Securities and Exchange Commission, as Republicans are desperate to do, we save a little money on enforcement, but pay a lot of money to clean up financial catastrophes.
For every dollar the IRS spends on audits, liens, and property seizures, the government brings in more than $10. If we spend less on IRS enforcement, as Republicans demand, it costs us more.
Is this really that confusing?
It’s amazing what people will believe, once they’ve decided they should.
As I’ve mentioned, I do have a touch of my dad’s OCD. And the other day, when I was stuck in O’Hare most of the day, I was… bothered by the fact that the edge of the vinyl cushioned seat on which I sat was ripped, almost as if chewed away by a dog. I hated the way it felt, so of course I couldn’t stop touching it – like a sore tooth.
Then I remembered the tie-dyed duct tape in my bag. I looked around to see if anyone was watching, ripped off a piece and covered the offending tear. I was worried that TSA agents would suddenly appear and accuse me of trying to blow up the airport with explosive duct tape — but nothing.
So if you’re ever sitting at Gate 10 of the USAirways terminal, and you happen to notice a patch of pink and purple tie-dyed duct tape on the corner of an end-row seat?
Thursday, June 23 | 9 pm eastern | 6 pm pacific | Virtually Speaking w/ Jay Ackroyd | Dan Ellsberg and Glenn Greenwald - together for up to 2 hrs – talk about WikiLeaks and the growth of the American Security State. |Listen live and later on BTR.