Self-Fulfilling Prophecy

Recently, it was theorized that today's $76 per-barrel oil price will reach $100 in a few months:

July 23 (Bloomberg) -- The $100-a-barrel oil that Goldman Sachs Group Inc. said would prevail by 2009 may be only a few months away.

Jeffrey Currie, a London-based commodity analyst at the world's biggest securities firm, says $95 crude is likely this year unless OPEC unexpectedly increases production, and declining inventories are raising the chances for $100 oil. Jeff Rubin at CIBC World Markets predicts $100 a barrel as soon as next year.

"We're only a headline of significance away from $100 oil,'' said John Kilduff, an analyst in the New York office of futures broker Man Financial Inc. "The unrelenting pressure of increased demand has left the market a coiled spring.'' New disruptions of Nigerian or Iraqi supplies, or any military strike against Iran, might trigger the rise, Kilduff said in a July 20 interview.

And it is clear that many on the Left want nothing more than higher petroleum and oil prices. They have made no hesitation in making these thoughts clear.

"Watch out, you might get what you're after."

-- Burning Down The House, The Talking Heads

Three of the last four global recessions were instigated by a drastic rise in the price of a barrel of oil.

In fact, the exact opposite is true: The only solution for high petroleum prices are even higher petroleum prices. If crude oil is cheap, there is no investment in other energy sources and less effort is made to conserve, thus eventually guaranteeing acute shortages and even higher prices than today.

That is the paradoxical truth that has paralyzed Western governments since the oil-price explosion of 1999. The rise of petroleum prices from less than $10 a barrel to more than $30 threatens to trigger a wave of inflation that would inevitably be followed by sharp increases in interest rates, which would in turn cause a recession. That would end the miraculously long U.S. boom in the worst possible way.

Or:

There appears to be only one solution to this catastrophe: a nasty, pernicious and painful gas tax that will drive gasoline prices to heretofore unseen levels. Take the tax revenue squeezed from every red-blooded American’s fuel consumption and roll it into alternative energy research and technology. Fast-track the whole damn project. Forget pathetic attempts at lowering emissions by 20 or 25% by 2020. The game will be over. Do it now. It will hurt, but in the long run we will all breathe easier.

Why stop there with fiscal taxes? Why not a Carbon Tax?

But wait; let's more closely examine fiscal taxes on an average gallon of gas, shall we?

As I wrote in my May 13th post:

Andres Oppenheimer of the Miami Herald believes that nasty gas prices may serve to motivate our movement towards other energy sources. This is the Standard Democrat Line: higher gas prices make them happy. Higher gas prices + no more petroleum infrastructure building + overbearing environmental regulations against construction of more refineries + no drilling in ANWR + no nuclear production + no offshore drilling = Happy Democrats.

But remember: "All animals are equal; some are more equal than others."

In my state of Fornicalia, we pay (as of 2002) per gallon of gas:

- 18-cents in a state excise tax

- 14-cents, other state taxes

- total of 32-cents Fornicalia taxes per gallon

- PLUS

- total state & federal taxes = 50.4 cents per gallon tax

So, if gas is $2.99 (today), the TRUE cost of this gallon, absent GOVERNMENTAL TAXATION is ACTUALLY:

$2.48 a gallon

A little "easier" on the pocketbook, eh?

So let's say oil does hit $100 per 42-gallon barrel.

This would yield, roughly, $5 per-gallon gas.

I have a 15.9 gallon tank in my 2007 Toyota RAV-4. It would cost me $80 to fill my tank.

How would this sift out?

• Trucking would be hit;
• Railroads would be hit;
• Aircraft would be hit;
• General transportation would be hit;
• Commuters would be hit;
• Plastics industries would be hit;
• Electric power generation would be hit;
• Every aspect of American life would be hit;
• Prices on everything would climb.

Persons affected in a negative fashion would include those on the Left.

The media types would have a more difficult time getting their limousines;

Same for movie film stars and upper crust moguls of all Left Stripes;

And, of course, you can't ride a bicycle from Sacramento to the San Francisco Bay Area if you commute. Jobs would be impacted; infrastructure would be impacted.

Get your collective butts clenched, Ladies and Gentlemen, on both sides of the aisle. $100 per barrel oil is just around the corner.

The Left wants to stagger this nation? Guess what? They just may get their wish.

BZ