RE: Iraq: the case for decisive action

From: Mike Lorrey (mlorrey@yahoo.com)
Date: Mon Jan 27 2003 - 16:53:32 MST


--- Lee Corbin <lcorbin@tsoft.com> wrote:
> John Clark writes
>
> Could someone knowledgeable start a thread on "oil economics"?
> Wouldn't a Western takeover of Iraq just put the oil at market
> prices, (to the main betterment of Europe)?
> > Kai sayeth:
> > > The US are not going to war for moral, ethics and
> > > democracy - or [blah blah blah]
> >
> > Who gives a damn why the USA is going to war, it's not important,
> > the only thing that is important is the results of that war.
>
> Okay, I'll admit that *why* the U.S./U.K. are going to
> war is not so important as analyzing the probable results.

What is interesting is the oil economics if you dovetail it with global
warming politics.

It is a fact that the countries which are the biggest proponents of
theories of catastrophic anthropic global warming are also those with
the largest a) welfare social state apparatus, and b) degrees of
taxation of fossil fuels which are spent on that welfare state.

I have stated on occasion that it is my belief that this is the case
because this high degree of social welfare, from socialized national
health care to unemployment and education subsidies in these countries
puts their economies at a competetive disadvantage to more free market
nations like the US, which enjoys relatively low fossil fuel taxation
and limited social welfare. These countries want global governmental
solutions to the alleged greenhouse effect in order to force us to
implement similar high fossil fuel taxes.

How does this apply to the Iraq situation? While the US satisfies the
majority of its oil needs via domestic reserves, and much of the rest
via Mexico and Venezuela, this is not in a vacuum. The oil market is a
global market, and a restriction of middle eastern supplies to europe
causes europe to bid on oil from Mexico and Venezuela, thus raising
their prices.

By keeping the US from replacing the Iraq government (and thus causing
Iraq to freely produce oil at Pre-Gulf War levels), europe keeps oil
prices artificially raised. Oil prices in a free Iraq world would be
around $10/bbl. They are currently around $30/bbl, partly due to the
restriction on Iraqi oil exports, partly on the Venezuelan civil
conflict (which can also be traced to left wing organizations), and
partly on global uncertainty over future US actions in Iraq.

Europe has a vested domestic interest in keeping the US from liberating
Iraq, in that if oil prices drop to $10/bbl in a post-Saddam world,
European oil/gas tax revinues will drop precipitously, US products will
drop in cost faster than european products, leading to reductions in
european exports and increases in imports from the US, causing
increases in unemployment, decreases in income taxes, and widespread
domestic unrest. Governments will be forced to drastically limit social
welfare services, causing greater unrest, or else drastic increases in
taxes, causing unrest and capital flight.

In the end, it will spell a further condemnation of socialist policies
in europe, and an endorsement of free market US policies. Socialist
parties in power across europe cannot let this happen as a matter of
their own survival in power.

=====
Mike Lorrey
"Live Free or Die, Death is not the Worst of Evils."
                                                     - Gen. John Stark
"Pacifists are Objectively Pro-Fascist." - George Orwell
"Treason doth never Prosper. What is the Reason?
For if it Prosper, none Dare call it Treason..." - Ovid

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