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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: pezz who wrote (29740)	3/17/2003 3:55:54 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

Pezz, you obviously don't understand American politics, where Americans have the best politicians money can buy. You are correct that to get power, they need to win elections. To win elections, they need money. To get money, they need to pander to their supporting voters and funders. The funders are the ones with the money. In King George II's case, that's those with the oil. He's an oil man. That political equation flows overseas too. Saudi Arabia isn't best friends with King George II's Dad and their buddies because the Georges like sand, sheiks and sadism. See if you can guess what the reason might be. What do they have in common? In democracies, you need to think about the effect of diffuse costs and concentrated benefits and how that affects voting and support. High petrol prices are a diffuse cost. The concentrated benefit is to the USA oil industry and the politicians that oil industry supports. 10 million barrels a day of oil [and energy equivalents] is only costing $100 million over a long run reasonable price at $30 a barrel instead of $20 a barrel. It's only $200 million a day higher than it would be at all time low prices of $10 a barrel. Now, think of the trade deficit, Federal deficit and compare those with $100 million a day. Think of the size of the USA economy in $ per day traded. I'm sure you can see that $200 million a day isn't that big a deal in the big scheme of things. Sure, it's a ding and will be felt. But it's not like the early 1970s when oil was a BIG part of the USA economy and so was the vehicle industroy. Now General Motors and Ford market capitalisations combined are barely cash on hand for Microsoft. Mqurice