THE CURE FOR HIGH GAS AND FOOD PRICES

Vital Businesses Need Nationalization

The gas station attendant came outside. Wow, I thought, full serve! Ignoring me, she flung a magnetic price decal on top of the price per gallon. Regular unleaded had gone up 20 cents in the time it took me to drive from the curb to the pump.

“You’re kidding me,” I moaned.

“It’s 3 o’clock,” she shrugged. “Just got the new price.”

There has to be a better way, I thought.

And there is.

It isn’t drilling in the Alaskan wilderness. It sure isn’t John McCain’s plan to offer $300 million to the first person to come up with a longer-lasting car battery.

Gas prices could hit $7 a gallon before long, Wall Street analysts say, but Americans–always optimists!–take a little comfort in the fact that Europeans have paid more than that for years. But a lot of foreigners are laughing at us even harder than we’re laughing at the Euros.

Did you know that Venezuelans pay a mere 19 cents per gallon? It’s 38 cents in Nigeria. Turkmenistanis might not have electoral democracy, but they only shell out $4.50 to fill a 15-gallon tank. Before we replaced Saddam Hussein with…with whatever they have in Iraq now, Iraqis paid less than a dime for a gallon of gas.

One of the things that these countries have in common, of course, is that they’re oil-producing states. Countries that export oil and gas have trouble explaining to their citizens why they should pay for their own natural resources–and most are smart enough not to try. Iran, Saudi Arabia, Egypt, Burma, Malaysia, Kuwait, China and South Korea are just a few of the countries that keep fuel prices low in order to stimulate economic growth.

But they also share something else: common sense. Strange it might sound to Americans used to reading about big oil windfalls, they consider cheap gas more of an economic necessity than lining the pockets of energy company CEOs. So they don’t consider energy a profit center. To the contrary; government subsidies (Venezuela spends $2 billion a year on fuel subsidies) and nationalized oil companies keep gas prices low.

Unlike corporations, governments don’t care about turning a profit. They care about remaining in power. Their reliance on political support (or, if you’re cynical, pandering) allows them to do things our much-vaunted free market system can’t, such as make sure that people can afford to eat and buy enough gas to get to work.
Like the rest of the world, Venezuelan consumers have been squeezed by rising prices, and even shortages, of groceries. In 2007 Venezuela’s socialist-leaning government decided to do something about it. First they imposed price controls on staple items. When suppliers began to hoard supplies to drive up prices, President Hugo Chavez threatened to nationalize them. “If they remain committed to violating the interests of the people, the constitution, the laws, I’m going to take the food storage units, corner stores, supermarkets and nationalize them,” he said. Food profiteers grumbled. Then they straightened up.

Not even international corporations are immune from Chavez’s determination to put the needs of ordinary Venezuelans ahead of the for-profit food industry. Faced with severe shortages of milk earlier this year, Chavez threatened Nestle and Parmalat’s Venezuelan operations with nationalization unless they opened the spigot. “This government needs to tighten the screws,” he said in February 2008, promising to “intervene and nationalize the plants” belonging to the two transnational corporations.

Miraculously, milk is turning up on the shelves.

When it works, nothing is better at creating an endless variety of reality TV shows than free market capitalism. But when it doesn’t, it isn’t just that extra brand of clear dishwashing liquid that goes away. Businesses fold. Banks foreclose. People starve. And no one can stop it.

The G8 nations met in Osaka last week to try to address soaring food and energy prices–a double threat that could plunge the global economy into a ruinous depression. But the summit ended in failure. “Any hope that the G8 meeting would result in coordinated monetary action–or concerted intervention in foreign exchange markets–to counter rises, principally in commodity prices, was dispelled by their failure to agree on the phenomenon’s underlying causes,” reported Forbes.

So the G8 ministers punted. “Due to the lack of consensus, they have stated the need for further study,” wrote the magazine.

The problem isn’t the weak dollar or the non-existent housing market. It’s capitalism. A sane government doesn’t leave essential goods and services–food, fuel, housing, healthcare, transportation, education–to the vicissitudes of “magic” markets. Non-discretionary economic sectors should be strictly controlled by–indeed, owned by–the government.

Consider, on the one hand, snail mail and public education. The Postal Service and public schools both have their flaws. But what if they were privatized? It would cost a lot more than 42 cents to mail a letter from Tampa to Maui. And poor children wouldn’t get an education.

Privatization, particularly of essential services, has always proven disastrous. From California’s Enron-driven rotating blackouts to for-profit healthcare that has left 47 million Americans uninsured to predatory lenders pimping the housing bubble to Blackwater’s atrocities in Iraq, market-based corporations’ fiduciary obligation to maximize profits that is inherently incompatible with a stable economy whose goal is to provide people with a decent quality of life.

No one should pressure industries that produce things that people need in order to live to turn a quarterly profit. No one should go hungry, or remain sick, because some commodities trader in Zurich figured out some nifty way to take an eighth of a point arbitrage spread between the price of a hospital stock in New York and in Tokyo.

P.S. If you’re reading this in Caracas, please mail me some gas.

COPYRIGHT 2008 TED RALL

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44 Responses to “”

  1. Aggie Dude Says:

    This is excellent, Ted, absolutely excellent. What I would add about what other countries have in common is this; People in many places in the world (including Zurich where that trader is) are not lashed to the waterboard of endless ideological arguments. Consider the comments you see on your blog, and the difference (including myself I will add) between those who state they’re not American and those who are.

    Americans, I’d argue mostly because of the cold war, are fundamentally trapped in ideological arguments and cannot debate issues in a goal oriented way.

    The free market MUST be unmolested by the public sphere, this is not a matter of practicality, it is a moral imperative. This was not the case prior to McCarthyism, or at least not to the same degree. Every social service we still have predates the rise of neo-conservatism, from public education to the postal service.

    People accept them as reasonable and defend them against the right wingers. The reason we will never have universal health care is because all involve know that once we get it, we’ll want to keep it.

    In some places, people can have an adult conversation about solutions, which may include market solutions and non-market solutions. But here in the good ol’ United States of America, we’ve got a Congress who will do nothing about war crimes but will fly in the middle of the night to Washington to rule on the Terri Schiavo case.

    This is why we can’t solve big problems. We can’t even discuss them in the realm of fact. When scientific evidence is challenged with Ayn Rand and Michael Chrichton, it’s no shock that we stagnate while we’re robbed blind by the New World Kings.

  2. Anonymous Says:

    Testify Ted!!! Great column!!!

    I don’t agree with everything Chavez says and does, (like his buddying up to Castro) but I agree more than I disagree.

    I consider him a hero and I wish American politicians would try to emulate his concern for his citizens.

    Just one thing – this column is sure to piss off a lot of the right (wing) people. Be sure to keep your head low in public and look both ways before crossing streets.

    I’d hate to lose you.

  3. John Madziarczyk Says:

    Yay!

  4. Anonymous Says:

    Not to give Ayn Rand credit, but I wish there was gulch we could run away to.

  5. Anonymous Says:

    IN RELATION TO THE TABOOS DISCUSSED IN THIS ARTICLE:

    Read the interview the dude has given to the San Antonio Express-News in which he mentions the ultimate taboo which nobody will discuss breaking out of: NAFTA.

    That is one piece of opinion that would really make the neo-conservative/neo-liberal Ayn Rand fetishists ask for Rall’s summary execution.

    Ted: do a cartoon arguing for the breakup of NAFTA – link it to the crises in Mexican agriculture that is causing massive illegal immigration.
    And get it published.
    Come On Ted….I Dare You.

    In Respect

    Y_S

  6. Anonymous Says:

    Honestly – the United States and Canada have ceased to practically exist as economic units; we should call for the eradication of NAFTA.

  7. IrishUp Says:

    Since Ayn has come up, has anyone else noticed the way the Bushists all have names just like the “bad guys” in Atlas? Scooter Libby = Orren Boyle, Wesley Mouch = Karl Rove, Mr. Thompson ….?
    Or that the new microwave torture – uh crowd-control device we’ve been hearing about bears an eerie resemblance to Stadler’s machine?
    Or that this whole clan, originally propped up by Randies, more resembles that which Ayn so rightly despised in any Govt, than they do the Superhumans?

    I tell ya, sometimes these things keep me up at night …

  8. Anonymous Says:

    Yay nationalization!!!

    Now access to food can be another club the U. S. government wields to keep its citizens in line.

  9. Anonymous Says:

    I do have a love/hate relationship with Ayn Rand. I love the fact that Roarke blows up his building. There’s some kinda McVeigh/terrorisim thing in that, yet the neo-cons love Ayn!!! PS I have yet to burn my Rush albums.

  10. Anonymous Says:

    Balph Eubanks WASP COCKSUCKER!!!

  11. The Reverend Mr. Smith Says:

    In the Media Cliche Dept., I’m getting sick of hearing the phrase “at the pump” tacked on to every mention of the word “gas”, as if you can buy it from the tank(er) or even the refinery. I’m also sick of the whole “pain” metaphor. Shingles is (are?) painful. Kidney stones are painful. Losing a loved one is painful. I know all three from experience. Buying gas is not. Even at $10 a gallon, buying gas would never cause pain.

    The mainstream media must be destroyed.

  12. Jana C.H. Says:

    Aggie Dude– I would argue that Americans’ obsession with ideology goes back to the Puritans, not merely to the 1950s. Our relatively brief era of finding practical solutions to social problems coincides pretty closely with the presidential career of one man: Franklin Roosevelt. The Depression was so bad that many people were willing to try anything, regardless of ideology.

    We appear to be heading for a similar disaster (only worse because of the environmental component), and Barack Obama is no Franklin Roosevelt. I once had a glimmer of hope that John Edwards might have it in him to be a new FDR, but we’ll never know now. Obama is what we’ve got, and we have to go with him, but he has never filled me with hope. Even if the election isn’t stolen by the Repugs, I’m more discouraged than ever.

    Jana C.H.
    Seattle
    Old Italian Political Saying: The conductor changes, the music remains the same.

  13. Angelo Says:

    Barack Obama is no Franklin Roosevelt. I once had a glimmer of hope that John Edwards might have it in him to be a new FDR, but we’ll never know now. Obama is what we’ve got, and we have to go with him, but he has never filled me with hope. Even if the election isn’t stolen by the Repugs, I’m more discouraged than ever.

    Well said. Aggie and I have a contest over who is more hopeless about the future. He thinks the opportunity for real change came and passed. I am a bit more hopeful. I think it will take a real-deal economic collapse, but we will get our FDR, on steroids.

  14. Incitatus Says:

    Ted,

    People in Caracas (I know a few) might mail you gas if you’d mail them milk and other commodities. You might as well look up what country in the Americas has the highest inflation. One thing is certain: neither you, nor them, could trade common sense tapped from the policos in power in your respective countries. While you’re researching that inflation comparison, you might as well compare the pay of PDVSA execs vs that of private companies in Venezuela.

  15. Incitatus Says:

    Ted,

    One more thing about the supposed good outcome of nationalizating of such an “essential” service as agriculture: you got everything backwards, and you can look to Argentina, and to what is really happening in Venezuela. Same stuff happened all around South America, e.g. in Brazil in the late 80s, when government tightened price controls: the shells emptied.

    Of course, we could always look at more extreme examples, such as Stalin’s Soviet Union, or Mao’s China, but I have the feeling you consider those just fine and dandy.

    Well, what do I know, I’m just a rabid right-winger foaming at the mouth…

  16. former fan Says:

    This is your worst column ever.

  17. Anonymous Says:

    Currently in US there is no difference between Big Business/Money and government. Both
    are fused together and are one and the same.
    In order for your ideas to work, we
    should have a government that is BOTH honest and competent otherwise
    you will have shortages and again
    long line and budding black market
    and corruption.
    I think the problem lies in human
    nature. Homosapien need more evolutionary steps toward the selfless and supersmart one.
    You might get some death threats
    because of your article. Be careful.

  18. Lewis Ranja Says:

    Oh, come on, Ted. Don’t tell me that I’ve been banished from your website just because I won’t agree with your and Aggie’s absurd beliefs.

  19. ayn rand's cancerous lung Says:

    Hey 4:53 anonymous:

    Have you ever seen Citizen Kane? Rosebud was a sled!

  20. Aggie Dude Says:

    I think FDR’s presidency was somewhat ideologically driven too. They were facing down a full scale socialist revolution…they had to do something.

  21. Anonymous Says:

    I’m shocked that everyone is seeing right through the opportunity the oil prices are throwing our way. Finally, we have the impetus to start creating electric cars, building wind farms, and making oil a thing of the past. Granted it’ll take a little investment, but the price of moving forward goes up everyday, as we’ve seen. We could argue about whether prices will go up or down in the long run and how we can make it that bit cheaper right this second til we’re blue in the face, but the fact remains that we will probably need to make a transition to a non-oil-for-energy world in the not too distant future. Why doesn’t anyone seem to think now is a good time to start on it?

  22. Jana C.H. Says:

    Aggie– FDR didn’t stave off socialism by implementing a competing ideology. He took a little from socialism, a little from capitalism, and a lot of stuff that just looked like it would work. A fervent ideologue insists on doing what the theory says will work– say, market-driven medical care– even when actual practice shows it doesn’t. FDR polluted (and thus saved) capitalism with bits of socialism, earning himself the ire of the purists among socialists and capitalists alike.

    I have a mind that loves logically consistent systems of thought, but I have learned through experience that human society is too illogical for any such system to work without a lot of tinkering, impurities, and bending of the rules.

    Jana C.H.
    Seattle
    Saith Oscar Wilde: Consistency is the last refuge of the unimaginative.

  23. Fouad Says:

    ohhh Ted take me NOW!

  24. Anonymous Says:

    Rosebud was Marion Davies vagina.

  25. Lewis Ranja Says:

    Be careful there, Incitatus. If you mouth off too much, Ted just might start acting as a censor and prevent your thoughts from blighting his website. Tread carefully – one mustn’t upset an ideologue.

  26. Aggie Dude Says:

    Hey Jane,

    I think our disagreement is minimal, you’re right that FDR took a pragmatic approach, the only point I was making was that I don’t give him or the US government at the time too much credit. They did what they did because they were forced to. Leadership in the United States simply does not fear the population, and they do not see themselves as servants of the public good. Even the best of them are arrogant and self-important. The best we can hope for is that someone like Obama, FDR, Bill Clinton, will make good decisions in spite of their egotistical self-importance.

    The sword of damoclese has been removed in the US, ALL of our leaders know that they won’t really pay the price for their ideologically driven crimes.

  27. Aggie Dude Says:

    I agree that Obama is no FDR, but I’d also like to propose that what we need is not necessarily another FDR, but someone with the pragmatism and drive of an FDR, which I think Obama may provide.

    The world is structurally very different now than in the 1930s, and I think we have to look forward and understand that the Nation-State simply doesn’t occupy the same position it did then in constructing reality. It is certainly a player, but it’s not the only one.

    Ultimately I think we need a world governing system that has teeth. This is why I’m more fatalistic than Angelo.

  28. Anonymous Says:

    Why is it that europeans pay more than us for gas?

    Why haven’t they nationalized their oil companies?

  29. Anonymous Says:

    europe has trains that go everywhere.

  30. Anonymous Says:

    and nationalised healthcare.

  31. Anonymous Says:

    wow, anonymous answered his/her own question.

  32. Angelo Says:

    Imagine driving up to the gas station, but instead of another gawdy corporate logo, you see an austere “Department of the Interior” sign in blue, government font.
    instead three buttons(87,89,92), there is no button at all. You stick your card in, and begin fueling. On your way to the park, you see the government workers in the field, picking potatoes for $15 per hour in their crisp, but light “Department of Agriculture” uniforms.
    On the weekend, you board a $50 jet liner for a weekend visit to some of your relatives who were misplaced while looking for work during “the Dark Years”. The side of the plane is redundantly emblazoned with “Department of Transportation, Your Tax Dollars at work”.
    Below you can see the Army attacking the last Blackwater and Pinkerton holdouts of the Corporate War. An squadron of Ac130s bombard the Corporate headquarters Building. everyone on the Airliner is cheering.

  33. Anonymous Says:

    Actually, let me calculate my cost of sending a letter:
    Say I make 25 mailings a year at $0.42
    Last years operating cost of the post office was $71,917,000,000 (http://www.usps.com/history/anrpt06/).
    Divided by approximately 300,000,000 people, makes my share of that cost approximately $240, which makes each letter cost just under $10. Not that cheap when you think about it.

  34. Ron Elvis Says:

    One point of contention, having lived in South Korea for 12 years I can tell you they do not have cheep gas. It is between $1.80 and $1.90 a liter now. Up from $1.00 just a year or two ago. South Korea imports all of it’s oil and natural gas.

  35. Incitatus Says:

    I thought Aggie was pretty out there, but Angelo takes the cake easily, if he’s for real and not just a troll. His piece at “6/27/08 3:35 PM” made me think that if he ever reads “Nineteen Eighty-Four”, he’ll go: “way to go, O’Brien!”

  36. Angelo Says:

    USPS made a billion dollars in 2006.

    so dividing a billion dollars by 300 million people we get $3.333.
    25 mailings times $.42 = $10.5
    10.5-3.33=7.17
    7.17/25 = $0.2868 per mailing!

    thanks for playing.

    Now, the highly socialist, US military is a net loss every year, but we don’t stop funding it, do we?

  37. kadavul Says:

    Here is another thought…

    Few years ago Thomas Friedman was mentioning about a strategy. It goes something like hiking the crude oil price, and making the oil producing nations (mostly the budding “hostile” countries) rich. Let them invest in all kind of social and development programs. Then pull the plug. Iran, Venezuela, Sudan, …. will be doomed then. And they would listen to US then. He said the history showed this works.

    What a strategy! How is this war on ‘whoever’, without a single bullet fired?

    And we hope one day we would see the price goes down – if we happen to survive that long. Whether a war by bombs or oil, we all get screwed.

    Aren’t people arguing against Bush’s encouragement to spend after 9/11? Now in this war, we are all paying our share too, with more than magnetic decals on cars.

  38. Edward Says:

    Angelo,
    I can’t believe I have to tell you this, but the military is a function of the government as defined by the Constitution. Picking potatoes is not. You really fantasize about getting your daily goods from the government? Why not move to Cuba?

  39. mad as hell Says:

    How about we build some fucking choo-choo trains? I have not yet heard a presidential candidate (or pundit for that matter) mention the word “railroad.” I would vote for Pat Buchanan if he ran on that platform.

  40. Anonymous Says:

    Nationalizing critical services would work well if you believe that a government has its citizens’ (not large multinational corporations) best wishes at heart. Unfortunately, the U.S. government sold itself, lock, stock and barrel, to these said corporations, so nationalization is out of question.

    IMHO, the answer to the problem is not nationalization, but the breakup of large corporations.
    Less profits to corporations = less political influence.

  41. Angelo Says:

    You really fantasize about getting your daily goods from the government? Why not move to Cuba?

    Sorry for the nightmares, just trying to get your attention…
    You want to start a security outsourcing firm? We can recruit cheap soldiers from the phillipines. We will start small, but after the DOD sees what we can do for cheap, we will utterly put an end to military Keynesianism.

    Let me know.

  42. Edward Says:

    Sure Angelo, instead of having Americans fight our wars we can get those cheap browns from overseas to die for us right?

  43. Edward Says:

    Anonymous;

    IMHO, the answer to the problem is not nationalization, but the breakup of large corporations.
    Less profits to corporations = less political influence.

    The reason corporations need to influence DC is because DC has too much power. If the federal government were as small as it was supposed to be, nobody would give much of a rats ass what happens there. Sadly Americans have sat by and let the feds take 30% of our income plus an assortment of other taxes and fees and Social Security and try to tell the rest of us how to run our lives. Just ask Microsoft what happened when they had zero lobbyists and contributed nothing to any politicians. BJ Bill sued the crap out of them.

  44. Angelo Says:

    “Sure Angelo, instead of having Americans fight our wars we can get those cheap browns from overseas to die for us right?”

    is that really such a bad idea?

    Fuck! Triple Canopy and Blackwater beat us to it.
    It’s fucking genius! Hiring Reagan’s El Salvador death squads to do the same thing in Iraq. I knew something was fishy when they sent John Negroponte over there…

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