A Christian Liberal is NOT an oxymoron.

Posted by XT on January 6th, 2008 in World News

OPEC says they are not to blame for the high price of oil. Of course, what did you expect them to say? We are responsible for the high price of oil because we are willing to pay so much for it. If we’d only Amish it up a bit, we could bring down the price of oil. Of course, if we did that, then we wouldn’t care about the price of oil, right?

From the Washington Post:

There is enough oil in the market,” Chakib Khelil, the Algerian oil minister who took over OPEC’s rotating presidency for 2008, told reporters in Algiers. “It’s the problems in Nigeria, in Pakistan and the credit crisis caused by the U.S. subprime-mortgage-market collapse that caused prices to increase.”

Now, Mr. Khelil should know what he’s talking about - but the fact is that Pakistan isn’t a major oil exporting country. Pakistan’s standing as a country with nuclear weapons probably has some slight effect on oil markets, but no more than the fear that the inability of the US to end the conflict in Afghanistan. After all, it is the inability of the Bush Administration to declare a clear and quick victory in Afghanistan that feeds into the instability of Pakistan.

The real problem in world events is the inability of the US to bring peace to Iraq. Even as violence against US soldiers begins to fall and Iran de-escalates its aggressiveness, Turkey is now launching rades across the Iraqi border. Peace remains as far afield as ever, and may be even less likely than ever.

The credit crisis is a better scapegoat, but not entirely correct. Think of it - how does your neighbor not paying his mortgage effect the price of oil? There’s no direct connection. There is an indirect one - Middle Eastern countries have made major investments in brokerages in the last decade, so when the brokers lose money, so do the UAE and Saudi Arabia, for example. But that’s a pretty weak linkage.

The real financial problem is the value of the dollar. According to MeasuringWorth.com, a hundred dollars worth of money today is worth somewhere between $74 and $85 in dollars from the year 2000. That means the dollar has lost somewhere between fifteen and twenty-six percent of its worth in seven years. Compared to 1980, a current dollar has lost thirty-nine percent of its value, meaning a dollar today is worth about forty-one cents from 1980.

Why is the dollar worth so much less? Irresponsible deficit spending by the government. Under ordinary conditions, the Fed would be expected to raise interest rates to cut back on the money supply and pump up the value of the dollar. But if they do that, everyone goes homeless. More to the point, billions will be lost in the housing speculation security markets. Can’t have that. So the Fed continues to trim the interest rate to increase the supply of money (and credit). So Mr. Khelil isn’t totally off-base, but he’s glossing over a lot of bad behavior by the Bush Administration.

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