From: Mike Lorrey (mlorrey@yahoo.com)
Date: Tue Jan 28 2003 - 17:40:09 MST
--- Lee Corbin <lcorbin@tsoft.com> wrote:
> Mike Lorrey beautifully explains
>
> > 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 revenues 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,
>
> Double whammy! So you are saying that one result of a drop
> to $10/barrel will be that oil/gas tax revenues will fall.
> This I understand; it would provoke a fiscal crisis for their
> governments.
>
> But what I don't follow here is why the European products' costs
> wouldn't also drop along with the oil and gas prices. Yet that
> is what you are saying, right?
Because european governments tax oil more than we do, a drop in oil
prices will cause a greater advantage for US firms because the high
european tax premium will still exist, and will get worse if the
european government try to jack up taxes to make up a shortfall.
=====
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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