From the Princeton Economic Institute:
What's the real difference between Al Gore and
George W. Bush? Al Gore will give you the most
educated dead 18 year old money can buy. Geore W.
will put extra money in your pocket (via a huge tax
cut) to help pay for your dead 18 year old's
funeral.
Personally, I sorta think they both miss the mark.
I don't particularly want my son or daughter to
go off to fight a war just so I can drive an SUV.
Most Americans fail to "connect the dots." Few of
them see any link between driving an SUV and the
USS Cole. Osama Bin Laden is trying to make that
link clearer to Americans. But even if Bin Laden
is eventually taken out by the US Military or the
CIA, it hardly matters. There will be other crazies
to replace him. Crazies in the MidEast are a dime
a dozen.
It is also abundantly clear that Israel will never
be able to live peacefully with the Palestinians
or her other Arab neighbors. Ariel Sharon knew
exactly what he was doing in his provoctive Temple
Mount visit. He was stirring up trouble to
antagonize the Arabs, polarize the conflict between
Palestinians and Israelis, and thus strengthen the
"Hard Right," enhancing his own power. He succeeded
marvelously. Notice that Sharon is not in jail. I
believe he should be in jail for the utter contempt
he has for the Peace process, but obviously he
never will go to jail, no matter how outrageous
his actions. In fact, he nows looks to be a key player
in a Unity Government. Barak must now meet Sharon's
terms to play a part, not the other way around. This is
a terrible fact of life in the MidEast. The nastiest people
tend to be the winners in the political process. Arafat
is no better than Sharon. Someone from both sides will always
throw a spanner into the works as and when Peace
becomes too much a reality. It doesn't suit their
agenda.
Ariel Sharon's actions led to the needless death of a 12 year
old boy. And much more bloodshed has been spilt
since that initial conflict. But Sharon is not alone
at fault for the trouble. Much is made of the
idea that the Arabs were geared up for conflict.
Of course the Arabs took advantage of the situation,
but why did the Israelis give them such a wonderful
opportunity??
This simple answer is neither side genuinely wanted
peace. "Peace" involves compromise and both sides
felt that it was "time to give war a chance" rather
than make painful concessions in the name of a lasting
peace.
Barak did not have to give Sharon permission to make
his visit to the Mount. He knew what would happen!
So why did he let Sharon cause such chaos? Either
Barak is too weak a leader to resist Sharon, or
too incompetant, or too cynical...in any case he
doesn't look good in my eyes.
SO MUCH BLOOD HAS BEEN SHED....that any chance
of a lasting peace seems nearly impossible.
Any Peace Agreements that may be signed in the
future will be viewed opportunistically by both sides
as "Half-Time in a Football game." It allows
the opposing teams time to re-group and plot their
next slaughter, but it is mere fantasy to believe
that this conflict will everm really end til one side or
the other, or both are anihilated.
Of course politicians like Clinton will use the
conflict to puff themselves up as "PeaceMakers"
in the hopes of getting a Nobel Peace Prize, but that
should not concern us. We all know what kind of
politician Clinton is.
The only rational question for Americans is, "do
we want to play a part of the coming MidEast war?"
In the 2nd Presidental Debate, the most interesting
question never got asked?---
"Should we let our dependance on oil drag
us into a conflict far worse than Vietnam, or
should we do everything possible to lesson
our dependence on oil as a matter of national security?"
THE TUTSIS AND THE HUTUS OF THE MIDEAST
Bush agreed that the administration was right
not to get involved in the Tutsi/Hutu conflict even
though more than 750,000 people were slaughtered
because...."get this!"...."it did not involve our
national security."
And he was right! Americans are forever thinking
that they can solve other people's problems.
That notion should have died with Vietnam.
If neither George Bush nor Al Gore believe that
we should get involved in an African conflict
that took more than 750,000 lives, then why do we need
to get involved in the MidEast??? The simple
answer is, "OIL!"
Notice that neither Bush nor Gore really wanted
to spell it out for America. Both of them
were darting around the issue.
In the Vice-Presidential debates Lieberman
made the point that if we raise the average
fuel efficieny of the US car fleet by just
3 mpg, we can save a million barrels a day.
That is quite an interesting point....as far as
it goes. But we all know that Al Gore, who
wrote "Earth in the Balance," had 8 years
to implement his ideas, but did absolutely
nothing. What exactly was he thinking when he wrote
in his book, suggesting that we raise gas taxes
to get off oil? Any American can readily
tell you how politically naive such an idea
is. Maybe Europe can live with high gas taxes,
but Americans will never stand for it. I'm
not debating whether it is a good or bad idea,
I'm saying that Gore is incredibly naive to
believe that such an idea would ever be politically
possible in America. Note that Gore is no longer
peddling the idea of higher gas taxes.
Liberals who believe that Gore is for the
environment are equally naive. In any case,
the argument for lessoning our dependence on
oil is better argued on a "national security"
basis than on an "environmental basis."
We spent over $100 Billion to send a man to
the Moon back in the days when $100 billion
was still a lot of money. It was justfied
on the basis of "National Security."
Why can't we spend $100 Billion to lesson
our dependance on oil...for "National
Security" reasons.
Now Gore wants to spend an extra $100 billion
on education? Why? I don't see the point!
Never mind the fact that the $100 Billion
will be wasted on an inefficient bureaucracy
that never seems to improve no matter how much
money is thrown at it. Even if our kids get
a better education, why waste all that money
on kids that are only going to be shipped off
to the MidEast to fight and die for a country that is
not intelligent enough to get off oil ASAP???
Message to America...."Time to connect the dots!"
That $100 Billion should be spent to wean Americans
off oil, not for education. That trillion dollars
should go to get us off oil, not for a tax cut!
Neither Bush nor Gore have the leadership qualities
to get us off oil as fast as it should be done.
A CARROT WORKS BETTER THAN THE STICK
Gas taxes are the stick. Americans don't respond
well to European style punitive gas taxes. As Europe
is finding out, these gas taxes are easier to implement
than they are to give up. European states are now
so heavily dependant on revenues generated from petrol
taxes, that they cannot give them up,....and their
economies are that much more vulnerable to oil price
shocks than the US economy. And you wondered why
the dollar index keeps making New Highs? Savvy traders
know that it won't be just the French who cave during
the next oil price shock. All of Europe is vulnerable.
They will all cave into political pressure from the masses.
There is absolutely no reason to own the EURO because
Europe has no discipline. Nor should we expect the
average European to endure such enormous gas prices.
When over 50 to 75% of the price of gas is composed
of tax, you have a state-sponsored ponzi scheme
in the making. Each time OPEC ratchets up the price
of gas, it goes up all the faster in Europe. And if
the ECB continues to raise rates every time oil spikes,
they will only succeed in causing a deeper recession.
High gas taxes on top of a rising oil price represents
a "rate hike" all by itself. Why add insult to injury.
Message to ECB: Forget your mandate to keep inflation below
2%. Stop fighting the last war. Traders are smart
enough to know that every time the ECB raises rates
to combat inflation, some politician (like the French)
will bust the European fiscal discipline with
concessions to the mob.
"Oil will go on rising over the next few years and
the EURO will go on falling."
Message to Europe: "Buy yourself a clue!" Forget
about defending the Euro because it just isn't going
to happen. It is a matter of focus. The sooner Europe
spends more time reforming the welfare state and
deregulating their economies, the sooner the Euro will
snap back.
THE CARROT RATHER THAN THE STICK
If Americans will not accept high gas taxes, they
probably would accept a bribe. The "carrot" must be
offered to lure Americans into dumping their gas guzzlers
for hybrid cars, and other more efficient means of
transportation. Tinkering at the edges is all
that Gore or Bush plan to do.
Granted both Bush and Gore have talked
about tax deductions, etc, (call it a "carrot" if you don't
like calling it a bribe) to help push Americans in the
right direction, but neither of these two candidates
will do enough. It will be the same old story of
"too little, too late."
But what if they stopped being politicians for a moment
and started being statesmen...just for a moment? What if
they did get focused on our energy crisis before the
next MidEast War?
Granted, a lot of rich people will go on driving SUVs
even if the price of gas moves above $3.00 a gallon
and stays there. That would only increase
the snob appeal. But the government could give huge tax
deductions in proportion to the mpg your car gets.
Effectively it would become a tax cut for the middle class
and the poor. The rich would go on driving gas guzzlers, but that's
okay
because the goal is not to socialise the country. The
goal is to reduce our dependance on oil for national
security reasons. The very rich repressent a very small
portion of the population. The Middle Class & poor people
especially, who generally drive older cars that get the worst
gas mileage would be tempted to buy a new car that gets
much better mileage to save money on gas and because
of the tax deduction. It is a fact that the vast majority of the
pollution comes from a very small percentage of the cars
on the road (mostly older cars). So this idea would help
ease pollution as well as increase gas mileage and reduce
our national dependancy on oil.
To really influence the buying decisions of enough people the tax
deduction would have to be generous enough to wipe out
taxes completely for the lowest income brackets and to
substantially reduce taxes for the Middle class. I don't have
a set figure in mind, I just believe it should be very generous
to motivate people to take decisive action while there is still time.
(Rememeber: our Panic Cycle Year for Oil is 2002).
If Bush believes that opening the Arctic Reserve will help,
he's just a naive as Gore. Or as Gore claims, Bush is in the
hip pocket of the oil companies. It will probably take until 2005
to lay the pipeline for what????.....6 months worth of oil!!!
Pretty stupid stuff.
It is not even clear that the oil companies would benefit from Bush's
actions.
By the time they lay the pipeline, the crisis will have come and gone.
Our oil crisis is coming long before 2005...most probably in the
year 2002. There is not really much that Bush can do to
bring in more oil from the US...we don't have it. The US passed
the halfway mark on Energy Reserves back in the 70's. We have
been on a slippery slope to becoming an oil-depleted country
ever since. We now import over 50%--60% of our oil....and rising.
We cannot find oil that isn't there. Opening the Arctic Reserve
may buy a few vots in Alaska and from Oil company workers, but
it does nothing to address the key issue.
If we can't find more oil, then we must begin using the oil we have
more efficiently.
Here is the tax break that Bush should have brought to the
table. Imagine a trillion dollar tax deduction rather
than a trillion dollar tax cut. This tax deduction would be fair
because it would be targeted to benefit anyone who is
willing to drive a high mpg vehicle...rich or poor alike.
The better the mpg, the better the tax deduction. It would stimulate
Detroit to come out all the faster with their hybrid SUVs because most
people won't want to buy a Honda Insight no matter how attractive
the tax deduction. People like their SUVs. It would also
stimulate a move by automakers to develop the best
mpg cars. Any car that gets more than 100 mpg would get
such huge tax deductions the price of the car would be sustantially
reduced through tax deductions. A car that only gets
50 mgg would get a proportinately lessor amount of tax deduction.
It is true that Congress is now looking at giving you a $3000 tax
deduction for buying into alternative energy and hybrid vehicles.
But $3000 is not going to be enough get the attention of most Americans.
We need a much bigger bribe than that to change our behavior. I
suspect the reason you won't see something larger than $3000 tax
deduction is that Detroit would fight it. Since they are not yet ready
with their own Hybrid cars, most the the tax benefit would go to people
buying Japanese hybrids. Here again, Detroit is myopic in their
thinking.
They should have been geared up for this change. Instead Detroit
is now dealing with huge inventories of cars that people don't want to
buy. So much so that 8 factories are going to take a week off to help
reduce their huge inventory. The Ford at Ford likes to talk the talk.
Its time for him to walk the walk. Stop tinkering at the edges!
Bringing
out hybid trucks and SUVs that get 25 mpg by 2004, is not going to cut
the mustard.
Suppose the govt were to say to you that you can write off (thru a tax
deduction)
25% of the price of any car that gets over 40mpg. Suppose the govt were
to
say that you can write off 40% of any car you buy that gets 60mpg You
can
see where I'm going. It might stimulate Ford to walk the walk. They
might
try harder to come out with an SUV that gets 40mpg, instead of 25.
CARLY SIMON TO BILL CLINTON:
"You're so vein, you probably think this Peace Process
is about you!" (to twist the Carly Simon lyrics a bit).
If the rumors are true, Clinton is probably the first
President to have his administration pay over a six
figure sum to a Norweigan public relations firm to lobby
the Nobel Peace Prize committee into naming him the winner. It
didn't work, but it does show you that Bill Clinton is
still ethically challenged long after Monicagate.
Granted, most other Presidents would not stoop
to Clinton's extremely low level of ethics, but again
the voter would be naive to think that either Bush or Gore will
be any the less keen to play the role of statesman to the
MidEast.
Instead of focusing their attention on reducing our
dependance on oil, the next President, like his predecessors
will waste our national attention on bringing
"Peace to the MidEast". What a con job! They know
its a con, but they are politicians, what can you expect?
Even Jimmy Carter, who did more than most Presidents to
try to wean America away from oil, also wasted huge
amounts of time playing PeaceMaker to the MidEast.
It is all vanity, whether these Presidents admit it
or not.
The Arabs and the Israelis are nothing more than Tutsis
and Hutus. The only difference is the oil. It is
well past time for America to stop giving the Israelis and
the Egyptians multi-billions of dollars in
foreign aide each and every year....as a bribe to refrain from
killing each other.
Did I say Gore was naive? Well I guess that must be the
pot calling the kettle black, because I would be even more
naive than Gore, to believe that America will ever stop
sponsoring the "killing fields of the MidEast."
Still it is true, that without the money America
sends to both sides, I believe you'd have a better
chance of lasting peace. "Foreign Aid" is a misonomar.
Just as most USAID, World Bank, and United Nations
projects are supposed to help the Third World, but do
nothing of the sort, foreign aid for Israel and Egypt
only serves to maintain a corrupt bureaucracy that keeps
the two sides from ever dealing with the issues.
Would Isreal be crushed by Arabs without US Aid? I seriously
doubt it. Isreal is a very strong country. They
would survive and be better for not depending on the US.
If the US were not giving aid to Israel and Egypt, if
the US radically reduced our dependance on oil thru
a trillion dollar tax deduction (on high mpg vehicles),
.....if....if.....if.....alright so its all pretty naive
to think that we will do the right thing.
Voting in tomorrow's election may not have all that
much effect on the key question concerning our nation's
future, because again, I don't see that either candidate
is up to the job of steering the US away from our over-
reliance on oil. But there are other things that you can do.
You should consider how you vote with your capital.
On Bloomberg I ran a SEARCH of ENERGY FUNDS.
I found 68 energy funds listed. Do you want to know
how many of those funds specialize in "Alternative Energy"???
NONE!.
There may be a few funds out there that specialize
in Alternative Energy stocks, but I haven't found them.
I find this rather odd indeed. From a marketing point of view,
it would seem to be the ideal time to launch a fund that
only buys into alternative energy. From a personal point
of view, you may find that buying into Alternative Energy is
a bit like buying Cisco 5 years ago. Of course not all these
alternative energy stocks are going to become Ciscos
in the future, but so what. You only need one true winner.
The correct analogy is to view "alternative energy" stocks
as a Call Option on Oil (without the risk of an expiration date or a
strike
price).
The risk you have is that oil is not in a bull market. I don't see
this as a risk, but some people might. Some people might
also believe in "Peace in the MidEast." You have to
decide what you believe in and act accordingly.
Your capital if invested wisely, may help promote interest
in this key emerging market sector. It may also make you quite
wealthy.
Of course it would be nice if Fidelity or Vanguard read this
email and decided to "wake up and smell the coffee!" They
should have already launched "Alternative Energy funds"
so that the 401k investor can throw his retirement money
into something that is useful to the country as well as being
a productive asset and a hedge against the "Hutus and Tutsis
of the MidEast." |
