Friday, June 27, 2008

Flashback 2000: That Bubblin' Crude

From The New York Times exactly eight years ago today:
Gov. George W. Bush of Texas said today that if he was president, he would bring down gasoline prices through sheer force of personality, by creating enough political good will with oil-producing nations that they would increase their supply of crude.

"I would work with our friends in OPEC to convince them to open up the spigot, to increase the supply," Mr. Bush, the presumptive Republican candidate for president, told reporters here today. "Use the capital that my administration will earn, with the Kuwaitis or the Saudis, and convince them to open up the spigot."

Implicit in his comments was a criticism of the Clinton administration as failing to take advantage of the good will that the United States built with Kuwait and Saudi Arabia during the Persian Gulf war in 1991. Also implicit was that as the son of the president who built the coalition that drove the Iraqis out of Kuwait, Mr. Bush would be able to establish ties on a personal level that would persuade oil-producing nations that they owed the United States something in return.

"Ours is a nation that helped Kuwait and the Saudis, and you'd think we'd have the capital necessary to convince them to increase the crude supplies," he said.
I'm glad to see it worked out so well. Any comments from readers?


  1. I've got a better quote than that:

    "In all the sweep of postwar history, no event, no issue, no political or social process has more profoundly shaken the established world order, or brought about more rapid and tumultuous economic change, than the end of the era of cheap oil. This change has been called the energy crisis, but the term is too limiting. Rather than being merely an ongoing trauma over oil, the energy debacle has become a crisis of economics, of politics, of the very balance of power in world affairs. In short, it is an all-embracing, mesmerizing Everything Crisis..."

    Sounds pretty on target, huh?

    Except it was written in 1980, and within 5 years the price collapsed and I remember buying gas for $0.68 per gallon.

  2. While the price of oil is important to the economy and helping to push the air out of the housing bubble, note that we don't have shortages because the price is allowed to move/change in a market. Previously in the 1970's the government imposed quotas on what could be purchased. This caused a shortage. Similar to preventing drilling in ANWR and off the US coasts. Either way, the politics of oil - be it BHO, W, or McC - is not going to keep the housing bubble inflated in any way. I appreciate this blog for its insight into the housing market. Not pointing the finger at politicians. Remember, many a good man/woman goes into politics. None comes out.

  3. If you want to blame anyone for high oil / gas prices, you can kinda blame Clinton. Clinton pushed through permanent most favored nation status for China. Chinese exports the U.S. exploded as a direct result. This one single factor is responsible for the economic prosperity that China is experiencing. This caused China to markedly increase oil consumption.

  4. "I'm glad to see it worked out so well." Love the sarcasm. LOL

    Maybe I'm oversimplifying things, but rather than begging OPEC to "open up the spigots," what Bush and Congress should be doing is putting a stop on the rampant speculation going on in the commodities market. That should make prices come down some. And of course, local governments have a role to play as well; what these govts should be doing is invest quiet a bit of money on better or stronger public transportation systems. The lack of quality public transportation throughout the country is truly appalling.

    --ssh anon

  5. Maybe it should've been written in 2008 instead? Much truer now.........

  6. It is being written now, that's the entire point of why I posted it. It was wrong then and it is wrong now.

  7. I wasn't trying to put the blame for high oil prices on Bush, although I am no fan of the guy. Instead, the point was to give readers a chuckle and show how some campaign promises can look like complete B.S. eight years later.

    As for speculators, politicians and the public are just using them as scapegoats to avoid really addressing the problem. Speculators are not the cause of rising oil prices. China and India, yes. SUV drivers, yes. OPEC, yes. Environmentalists, maybe a little bit (although I'd rather have a clean environment that cheaper oil). Speculators, no—not unless they actually take oil off the market, which they haven't been doing. See here, here, here, or here to understand why speculators are not causing rising oil prices.