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September 27, 2008

Railroaded: Global Warming, Big Energy, Obama and the Democrats (Kat-Mo)

Or, why we're being fed crap and told it's filet mignon. (sorry, linked to AP article)

In the new $635 billion spending bill, automakers get a $25 BILLION in "below market loans" to help refit their plants to build cars with "new" energy efficient technologies. In short, hydro-electric cars.

Oil drilling ban is supposedly dropped, correct? But, the east coast of the Gulf of Mexico is off limits still (Florida) and the government won't be able to issue new leases until 2011. If that. There is no imminent drilling.

Pelosi et al couldn't block it indefinitely, but they could kick the can down the road in hopes that the next president, (Obama) will play along with them and sign another executive order, a la Clinton, to put that oil off limits again. Imagine that with a Democrat controlled congress.

The plan, that seems rather obvious, but gets little play, is to insure that oil prices remain high, thus, gasoline prices remain high. The pain in people's pockets will force them to slowly move towards hydro-electric vehicles. Of course, these vehicles aren't exactly cheap. So, as the Republicans point out, this isn't going to help the "poor people" who can't afford these new cars, regardless of tax credits. And, if Obama had his way, gasoline would be as high as $10/bbl in order to force people to change to hydro-electric or other "alternative energy".

Obama often harangues the idea of "trickle down" economics, but his plan for "poor people" to eventually get these new cars is that more wealthy and middle class buyers will eventually sell these "used vehicles", causing them to "trickle down" to the poor. That's if these cars turn into mass produced, affordable, long term prospects for transportation in America. In the mean time, the "poor" are making choices between food, gas to go to work and their mortgage payments.

Now, if this was really just about "peak oil" or just "countries that don't like us much" or even "global warming", this might be a real necessity. If oil was so scarce that we were legitimately, by market availability, going to be paying unsustainable high prices, this would be "a good thing." But that's not the case.

Witness the spike in oil speculation, unrelated to availability, and it's actual fall. Gasoline prices could go to less than $3.00/gal. And then what? These alternative technologies and energy resources go back to what they were before the oil spike: unprofitable.

Unless, of course, legislation forces automakers to produce more hydro-electric cars. Transportation being the single largest consumption of oil based products. An increase in Hydro-Electric cars means an increase in the use of electricity. Which means that the energy companies can legitimately claim to need to produce more electricity without using "evil" fossil fuel plants, or, simply, increase in the use of "alternate energy" resources.

In other words, it isn't really the "market" that is driving the change to all electric, it is the government and the producers of electricity. Now, there may be legitimate issues here like the infamous "peak oil" that everyone has been predicting since the oil bust of the '80's. China and India are growing economies that are using more energy resources like oil. We don't like countries like Venezuela or Iran or Russia to hold the US or its allies hostage over its energy needs.

All good points, but do we need to switch over all the way, right now, to a total electric economy? Does it have to be instantaneous or can't we do it gradually with new drilling helping to keep oil prices relatively low, protecting US citizens' wallets and US business able to function and remain solvent?

That is the difference between McCain's (and Newt's) "Drill here, drill now" as a bridge to alternate energy sources and Obama's plan to just let the gas prices soar to the point of pain ($10) while dumping ever greater amounts of tax payer money into subsidies, grants, loans and tax credits.

Now, the reason that the Democrat's are pushing the "alternate energy" stuff and blocking drilling could be a legitimate concern over the United States' future energy security. Don't laugh. There may be some real concern among some Democrats. But, that doesn't mean that the "do it now" mentality is really about the US needing that security "right now". Iraq has stabilized, is a US ally and is estimated to be able to bring up to 6mil bbl/day to the market within the next 10 years (conservatively). The Middle East will become more stable with an Iraqi democracy acting as a lever against nominal US allies like the Gulf States and Saudi Arabia. That means that oil keeps flowing freely out of the region and remains a stabilizing force against oil speculation.

A big issue here is, as I've noted in the recent past, that the Democrat party has huge backers from the energy sector. Individuals have deep relationships with the energy sector. Barack Obama is ComEd's man. Commonwealth Edison being the single largest generator and supplier of energy in Illinois, Pennsylvania, Ohio, etc, with it's sister companies Consolidated Edison and Edison International supplying energy to California and the North East, including New York.

He's been assisted throughout his political career, even as far back as a "community organizer", by Commonwealth Edison top executives. It's not just his connection to Tom Ayers, late CEO of Commonwealth Edison, or serving on the board of the Woods Foundation. The Woods family being the largest supplier of coal to Commonwealth Edison. (Which is why Biden's "no coal plants" comment was possibly more egregious to the Democrats than even to Republicans). Or, even, that both Barack and Michelle Obama worked for ComEd's outside counsel, Sidley and Austin.

Today, Frank Clark, CEO of Commonwealth, is one of Obama's top bundlers. Of course, he is helpfully listed on the bundlers' list as "University of Chicago" where he is a trustee. Where Michelle Obama is the VP of Community and External Affairs for the University of Chicago Hospitals. Frank Clark is also a registered lobbyist. So much for Obama's claim that lobbyists are the great evil that plagues Washington D.C.

Exelon corporation, parent company of Commonwealth Edison, has donated over $74k to the Obama campaign.

Beyond that, Speaker of the House, Nancy Pelosi (D-Cal), is heavily invested in T. Boone Picken's wind farm project. There are many others involved. Equally important is that many of the investment firms being bailed out today have large investments in companies like ComEd/Exelon, ConEd and International Edison/SoCal Edison who have been moving towards hydro-electric plants, wind farms and other alternate energy programs.

JP Morgan, Goldman Sachs and UBS are all top donors to both the Democrat Party and Obama's campaign. They are also all listed in the top ten holders of these energy companies.

So, what happens if oil prices drop and gasoline goes back to a relatively economical $2.50/gal? That means that automakers making hydro-electric vehicles will not see a big boost in buyers. Sen. Kyl will be correct. The automakers will not realize the investment in these plant changes through profits and will be hard pressed to maintain this line of vehicles without considerable subsidies from the government.

Energy companies attempting to transition to "alternate" or "new" energy platforms will not realize additional utilization of electricity, thus, profits. And, neither will their investors. Wind farms continue to be a novelty instead of a profitable business model. Investors in these companies and technologies will not realize much, if any, dividends from their investments.

In short, the US does not transition to majority electrical energy and the Democrats, the largest recipients of donations from this sector in the last four years, will not have their self created econo-politico industrial base. Much as they believe the Republicans have in "Big Oil".

In the end, what is happening is that, far from natural market pressure to switch to these types of energy, the American people are being railroaded to accept something that may, in fact, be unnecessary. At least, for the short term. And, certainly does not have to be as painful as the Democrats were trying to make it. The American people are being railroaded, not for their own good, but because some people want to get their investments back now, not later.

If that was all part of a "free market" driving these changes, getting those investments back sooner rather than later is fine. But, this is about corporations subverting the political process and politicians making "inside trade" deals with, hopefully, big profits and arranging to do it with their political power off of tax payers' money.

When I say "corporations subverting the political process", you don't really think that it's a coincidence that Obama's campaign manager, David Axelrod, is the owner of ASK. The firm that was the consulting firm for ComEd that convinced them to create a bogus "grassroots" front organization called C.O.R.E (Consumers Organized for Reliable Energy) to push higher energy rates? Or that Winner&Associates, PR firm for International Edison and Consolidated Edison, close working associates of David Axelrod's ASK and major donors to Obama and the Democrats, put out a bogus "viral" video about Sarah Palin's alleged AIP membership? Sarah Palin, the queen of "Drill here, drill now"?

How about Avis LaVelle, a political associate of Obama's from way back, who is repeatedly described as a "friend" of the Obama's in multiple stories, who was the media liaison for C.O.R.E and, through her consulting firm, Lavelle-Cousins, was recently paid $24k by the Obama campaign.

The big railroading is still happening. Al Gore, purveyor of all that is holy in Global Warming, has recently teamed up with Kleiner Perkins Caufield & Byers to invest in "new" and "alternate" energy technologies. He's set to make hundreds of millions if alternate energy and "majority" electric economy becomes reality. Who are Al Gore's backers and members of the board for his "Global Warming" and investment company? None other than current and former members of Goldman-Sachs, Lehman Brothers and various current and former heads of electrical companies.

So, when Al Gore and his associates says that "we can't afford to wait for Clean Energy", he means that literally. Al Gore, et al have a lot of money riding on the US switching from an oil driven economy to electrical "alternate" energy. The Democrat party does, too. "Big Energy" will be the most powerful industrial political force in the United States, thanks to the Democrats and they will expect their share of the pie.

As for the American people, they are getting railroaded for money and political power. They are being sold a bill of goods about "global warming", "peak oil", the "drilling hoax" and "affordable" alternate energy. And, we will pay for it in the end with higher energy bills and tax payer subsidies.

We need to ask ourselves whether this is about the real necessity or about money and politics.

Is this the "hope" and "change" we've been waiting for?

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posted by xgenghisx at 06:31 PM

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