Is Drill Everywhere Good for the Oil Companies?

by Dean Baker

 August 16, 2024
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The Trump campaign has made “drill everywhere” one of its main campaign slogans, implying that it will radically weaken environmental and other restrictions on oil drilling. This is supposed to be good for both the economy, since it would in principle mean lower gas and energy prices more generally, but also the oil industry since it won’t have to worry about government regulations in deciding where and how to drill. Increased oil production would be bad news for the environment since it likely means more local contamination, but more importantly, it will increase greenhouse gas emissions which will accelerate global warming.

The bizarre aspect to this story is that somehow lower oil prices is supposed to be a good thing for the oil industry. Predicting oil prices is not an easy thing to do, and as a practical matter the U.S. is already producing oil at record levels, so “drill everywhere” may not mean much additional oil production. But if the campaign’s promise comes true, and oil prices do fall sharply, that is not likely to be good news for the industry.

The figure below shows the combined profits for the oil and coal industry (the bulk of this oil) since 2013. The numbers are in 2017 dollars, so they are adjusted for inflation.

Source: NIPA Table 6.16D, Line 25.

As can be seen, profits fell from over $60 billion in 2014 to massive losses in 2016 and 2017. Profits recovered modestly in 2018 and 2019 but were still less than half the levels of 2014. The industry again took large losses with the pandemic shutdowns in 2020. Profits recovered in 2021, soaring to record highs in 2022 following Russia’s invasion of Ukraine. In more recent quarters profits have fallen back to roughly their 2014 levels.

This pattern closely tracks oil prices. Oil was selling for over $100 a barrel at the start of 2014. Prices fell sharply in the second half of the year, bottoming out at $44 a barrel in the middle of 2015. After briefly leveling off, they plunged again at the end of the year, bottoming out at less than $30 a barrel in early 2016. Prices then edged up staying mostly over $60 a barrel until the pandemic hit.

The pandemic shutdowns sent prices to record lows. They then recovered with the economy, before soaring to peaks of more than $120 a barrel following the invasion of Ukraine. Prices have since fallen back to the $70-$80 a barrel range, which is comparable to pre-pandemic prices after adjusting for inflation.

Again, the future path of oil prices is not easy to predict, but there does seem a contradiction between the idea that allowing the industry to drill everywhere will both be a profits bonanza and also mean cheap gas for consumers. If a large increase in U.S. production does send oil prices sharply lower, the oil industry is not likely to be very happy.

This first appeared on Dean Baker’s Beat the Press blog.

Dean Baker is the senior economist at the Center for Economic and Policy Research in Washington, DC. 

The US Needs a “Robin Hood” Tax

by Susan Harley

August 16, 2024
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Photograph Source: Olaf1541 – CC BY-SA 3.0

This year’s presidential race has unfolded like a made-for-TV drama, with twists and turns aplenty. But no matter who wins the White House or Congress, a giant tax fight awaits them next year — when many of the 2017 Trump tax cuts for corporations and the rich expire.

Part of that fight will be about closing loopholes the very wealthy use to pay lower tax rates than teachers or custodians. But let’s not forget the Wall Street high rollers who gamble in our markets, putting everyone’s investments at risk.

One proposal that could make waves is a Wall Street tax — also called financial transaction tax, or FTT — on stock, bond, and derivative trades. Think of it as a small sales tax for Wall Street trades, like the taxes the rest of us pay when we buy shampoo or shoes.

My organization, Public Citizen, was one of over a hundred that signed a recent letter to Congress calling for meaningful tax reform that fairly generates more revenue and creates more inclusive economic growth.

And I’m here to say an FTT would check all of those boxes and more.

Just a 0.1 percent tax — that’s 10 cents on every $100 of stocks, bonds, and derivatives trades — would generate an estimated $752 billion over 10 years. That would be more than enough to cover free universal preschool, free community college, and national paid family and medical leave — combined.

In addition to a boon for revenue, an FTT would also be a win for tax fairness, since the bulk of it would be paid by the very wealthy, who own and trade the vast majority of stocks.

FTTs are a tried and true solution that many other nations have used to generate significant revenues from the very wealthy and put them into public programs for all — which is why the FTT is often called the “Robin Hood tax.” It could do the same thing in the United States, reinvesting those revenues into creating a more level playing field.

Another benefit? An FTT would tame high-frequency trading, where computer programs ping-pong trades in the blink of an eye, which allows them to get in front of slower moving traders and eke out a miniscule profit on each trade. Because of the volume of trading these firms engage in, all of those tiny profits stack up to huge paydays.

These high-frequency trading algorithms tend to follow each other, somewhat like lemmings throwing themselves off a cliff. That can wreak havoc in the market, as it did during the 2010 Flash Crash when $1 trillion was lost in the U.S. markets in a matter of minutes.

Even a tiny tax on all those trades would make that computer-driven, high-frequency trading less desirable — which would make our markets safer.

Given that it’s a win-win idea, many prominent voices favor taxing Wall Street trades. Former Treasury Department officials like Robert Rubin, Antonio Weiss, Kim Clausing, and Natasha Sarin support taxing financial transactions. Jared Bernstein, who chairs the U.S. Council of Economic Advisers, also supports FTTs.

With these financial all-stars backing the proposal — and even some conservative voices weighing in in favor of taxing Wall Street trades — FTTs deserve their time in center stage during the upcoming 2025 tax fight.

Susan Harley is the Managing Director of Congress Watch at Public Citizen.

Violence is Everywhere, So Are the People

Trying to Stop It

by Rivera Sun

 August 16, 2024
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Image by Brett Wharton.

I’m tired of the violence. Aren’t you?

Some days, it seems relentless. A mass shooting at a school. Another youth killed by gun violence. A family on the street after fleeing an abusive partner. A genocide halfway around the world. Brutal wars displacing millions.

When will the violence stop?

The answer is: when we take action to stop it, together.

It’s not impossible. Communities across the country and around the world are showing us how. Violence may be everywhere, but so are the people trying to stop it. And many of them have powerful antidotes to the violence we face.

During the Campaign Nonviolence Action Days, Sept 21-Oct 2, 2024, tens of thousands of people will show everyone that another world is possible.

What does a nonviolent world look like? It’s not all roses. Conflict happens – but we have better ways to respond without resorting to violence. Many of these strategies will be on display during the upcoming Action Days: Neighborhood safety patrols to prevent gun violence. Unarmed peace teams de-escalating tension in hot conflict zones worldwide. Anti-bullying programs aimed at preventing the next school shooter. Centers that help mothers and families get back on their feet after leaving abusive situations. Protests pushing banks to divest from weapons.

More than 4,438 actions and events are planned across the United States and around the world to “build a culture of peace and active nonviolence, free from war, poverty, racism, and environmental destruction.”

An 11-year-old movement, Campaign Nonviolence aims to end violence in its many forms. This includes direct or physical violence (fights, bullying, war, gun violence) and it also includes systemic violence (houselessness, hunger, mass incarceration, the climate crisis etc.). Going even further, the effort seeks to transform cultural violence as well, the beliefs, attitudes, and values that lead to harm and destruction, such as militarism, racism, sexism, xenophobia, homophobia, and more.

Instead, Campaign Nonviolence rallies hundreds of groups and organizations who use nonviolent action and promote nonviolent solutions. Sandy Hook Promise trains thousands of schoolchildren in how to counter social isolation – a factor in mass shootings – with Start With Hello Week. The Nobel Prize winning International Campaign Against Nuclear Weapons (ICAN) coordinates hundreds of actions to move money out of nukes. The Global Silent Minute synchronizes thousands of people for a moment of prayerful silence for peace on the International Day of Peace (Sept 21). Nonviolent Peaceforce and Cure Violence use de-escalation techniques in conflict zones worldwide to prevent attacks.

Local community groups take powerful action in their neighborhoods. Nonviolent Opelika, AL, (part of the nationwide Nonviolent Cities Project) offers trainings and talks on their neighborhood patrols to prevent gun violence. Groups in Honolulu, HI, reaffirm their Zone of Peace & Nonviolence in a low-income public housing complex. An elementary school in Little Rock, AR, holds a peace march with all the children. In Detroit, MI, Meta Peace Team trains an entire high school in de-escalation skills.

There are street theater protests at military bases and teach-ins on nonviolent history, such as M.K. Gandhi or Cesar Chavez and the United Farm Workers. There are peace art contests and concerts in public parks. There are marches for ceasefires in Gaza and Ukraine. There are actions to stop environmental destruction and the climate crisis.

Campaign Nonviolence is gearing up for its largest-ever Action Days stretching between the International Day of Peace (Sept 21) to the International Day of Nonviolence (Oct 2). In 2023, more than 5,000 actions were held. With weeks to go, there are already 4,438 actions planned for 2024, and hundreds more expected to be added. The campaign calls for a range of nonviolent actions to be used during the 12 days, including labor strike solidarity, divestment from fossil fuels and weapons, racial healing circles, nonviolence teach-ins, peace demonstrations, and violence de-escalation trainings.

When the violence of our world weighs on your heart, connect to the people working to change it. They bring practical solutions and real-life experience. They persist in showing that something else is possible. They invite you to be part of the solution.

Find out more (Google us) about Campaign Nonviolence Action Days, September 21-October 2, 2024.

Rivera Sun is the author of The Dandelion Insurrection and other books, and the cofounder of the Love-In-Action Network.

Bullying Blacks by the New York Times’s Neo-Con Columnists

by Ishmael Reed

 August 16, 2024

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I had a cordial exchange with a Times columnist. The exchange ended when I asked her whether the Times would ever provide a platform for Black intellectuals to respond to her and her Neo-Con colleague’s constant sniping at Black individuals and institutions. Ross Douthat, Bret Stephens, and Nicholas Kristof’s tirades against liberalism always feature an anecdote about a Black individual or institution messing up. Kristof’s latest column about the failure of West Coast liberals ends with a Black Bogeyman story.*

San Francisco is so liberal that a billionaire-sponsored right-wing District Attorney recently wondered whether we were making the homeless too comfortable. The columnist with whom I had the exchange referred to the Manhattan Institute’s John McWhorter as her colleague. She says he has trouble with the Black left for his views. His views? He believes that Blacks should undergo gene editing to make them smart and less violent. He left out the warnings from scientists that gene editing might be used to classify groups as biologically inferior.

Note.

*Kristof, Nicholas, “What Have We Liberals Done to the West Coast” June 15, 2024, The New York Times