How to bring down oil prices, with no socialism

As I woke up today, I saw a Facebook post from one of my friends complaining how gas prices are too high (as we all are). I then made the connection between oil and banking. The Glass Steagall Act that passed in 1933 separated commercial banks and securities, so that the places where people's money was put to invest was not in a high-risk environment, to prevent the money of ordinary people being lost when investments do not pan out.

We need to do the same thing with oil in America. Currently in oil, companies can produce, distribute, and retail gasoline from well to pump, without ever needing to hire another company in the process. This is dangerous because it raises the costs of entering the market. When Exxon, Chevron, BP, and ConocoPhillips can control the entire process of drilling, distributing, and selling the oil to customers, the costs of entering the market become extremely high. This is a major problem. It is prone to other companies leaving the market, and those are the only oil companies that have large operations in America on the Fortune 500 list, excluding conglomerates like Koch Industries. It means that it is hard to enter the market, which hurts competition, which means they can set the prices anywhere they want.

This hurts the American economy. I propose that like Glass-Steagall we put a regulation on the oil industry to separate the three stages of the oil industry so no company can produce, distribute, and retail the entire process on a drop of oil so it must be moved between companies. This will bring down the costs of entering the market and make it possible for local companies to compete, which will bring down the cost of oil. When there are a lot of different companies working on it.

1. The first level will of course be the producers. These people will drill the oil and then sell it to:
2. The second level who will be the distributors. These people will move the oil around the country and sell it to:
3. The third level who will be the retailers. This is where small Mom and Pop gas stations will be able to set up operations so that there can be real competition.

By having multiple distributors, the producers will sell to the distributor with the lowest price. There will probably be distributors in local regions, competing against larger distributors, and by offering the lowest price to the retailers and competing with other distributors, the price should come down. By changing the economy so that producers can't distribute, it will be possible for small start-ups to start drilling wells in many places, which will create competition, which will bring down the initial price of oil. This means the distributors will purchase from the producers with the lowest price, creating an incentive to bring the price of drilling oil down and keep it down. The retailers will not be owned by one corporation, and will be something that can be extremely local. It will be easier for small gas stations across America to be owned by a single local family to be economically viable. When they buy from the distributors, they will have a lower initial cost and can bring the price of oil down below $2/gallon. Some people will also foresee the coming of an alternative energy economy based on hydrogen (Which is the only alternative fuel for transportation I see real potential in given production costs, distribution, and fueling time. It also works pretty much everywhere.) and put in hydrogen pumps at their stations which will create the infrastructure they need, which will diversify America's energy consumption, and bring down the demand on oil hence the price. Because hydrogen is far more abundant than oil and far easier to get, it will not have the problems that oil has currently of high prices, be able to compete with oil, which will bring down the cost of transportation nationwide, which will bring down the cost of everything else. Not to mention it is also better for the environment!

This is a real economic stimulus for America. Break up the oil companies! We don't trust them. Anti-trust!

The differences between first world and third world nations

I am currently reading a book called "Who Stole the American Dream" by Hedrick Smith and am very impressed with how he has put it together chronicling the change of America's economy from where unions and management worked together and people made a living wage with health care benefits (maybe one reason universal health care took so long to be adopted in the United States.) and although I have been extremely skeptical of the anti-globalization movement despite having a lot of friends who are anti-globalization in their economic views, I can see a lot of points on how this new economy has hurt America and we need to change the system, the alter-globalization movement which I believe has the right answer. Fighting systems have never worked outside of all-out war. Working within systems are what caused the middle class to grow so much from the 1950s to 1970s, my family included. I have written out some ideas on what really causes economies to grow and be stable, which originally started with looking at Indonesia and wondering why it is not growing rapidly like India or China, and that train of thought led me to the following treatise:

A Healthy Economy is an economy where there is a more equitable distribution of wealth and GDP growth meets or exceeds population growth. A more equitable distribution of wealth increases the payback of new investment and improving the average quality of living. By comparing different countries, this is what appears to be the important difference.

1. It should be easy to start a business. This allows prices to drop for consumers, and allows people to make enough to live by creating incentives to pay workers more. If people are not paid enough, the incentive to create a business of their own increases, and if there are more businesses in a market, there is more competition for the most competent workers. The invisible hand is able to work. According to the World Bank, there is a fairly strict correlation between this and economic growth. (Ease of Doing Business Index and GDP Growth)
2. It should be easy to do business, but there should be regulations to prevent exploitation of workers. If workers are exploited their lives are worse. Also, their quality of work decreases for the employer. However, providing incentives for workers to work efficiently and making sure they are healthy increases productivity and allows both owners and workers to come out better off than a dog-eat-dog approach. Henry Ford agreed with this because he had the opinion that the people who built his cars should be able to afford their product and his company was extraordinarily profitable for him. He would now be treated as a radical, Marxist, America-hating, socialist Michael Moore emulating Commie spy in today's political sphere. (Ease of Doing Business Index and GDP growth)
3. Public goods should be publicly owned, countries that have public oil pay the least. (Price of oil in various countries and economic growth vs. Oil production)
4. The country should invest in its natural resources for energy. It should be self-sufficient when it comes to power and not prey to global corporations. Renewable energy is the easiest way to fulfill this. Some countries (eg. Equatorial Guinea) have seen their economies turn around completely by gaining control of their economies. 10 years ago Equatorial Guinea was one of the poorest, but after finding oil they are middle-income. They are self-sufficient in terms of energy. By not controlling their energy countries in Europe and the United States (which do not have enough oil to sustain their standard of living) have their economies controlled by foreigners. (Economic growth vs. Oil production)
5. Taxes should give people the ability to improve their lives, especially the poor and middle class. Movement between classes should be high. Most businesses are started by these two groups. Bill Gates was middle class when he started Microsoft, Sam Walton was the son of Farmers. The government should balance the budget in most years to prevent paying a substantial portion of future revenue to debt that goes mainly to the rich investors who can afford many bonds. This ties in with the first point. (Standard of Living and Starting a Business Index in Europe and the USA vs. Central Africa)
6. There should be a strong financial sector with regulation to prevent abuse. Most small businesses begin through a loan from a bank or credit union. Reasonable investment should not be burdened by unnecessary regulation. This is the ingredient that requires the most balancing and liberalism (will to modify).
7. It should be easy to export goods to get goods inexpensively. This makes the global economy more efficient when done well. This is only achieved when the right to organize and ability to start a small business is universal so that there is competition for wages in countries that are usually exported to to prevent exploitation. Without that requirement it can become exploitation. See points 1, 2, and 5.
8. Health care and education should be free and public. This allows the middle class to grow their nest egg more than otherwise as Henry Ford felt was reasonable along with other historical business owners. A healthy middle class is the bedrock to every strong economy. A healthy middle class in good times makes bad times shorter. No middle class makes economies stay in depression. Compare Scandinavia, Greece, China, India, Indonesia, and any Central African nation.

With these 8 principles of economic prosperity, there should be an index that fully encompasses all of these to show the type of economic growth built on actual growth and an increase in demand, like was the economic ideology between 1933 and 1981 in the USA when we had our longest period of economic growth. All should be weighted equally and the results will tell where sustainable and shared economic growth exists.

How do we work towards a more equal society, where work is rewarded, and people can make their lives better if they are willing? I have a two step idea that if done should work.

1. Invest in your local economy. Grow small businesses at home and don't work for businesses like Wal-Mart that take most of your money outside of your local economy and give it to their investors alone. You won't be able to be completely self-sufficient, especially in terms of food, but by investing in your local economy and not companies like Monsanto that practice unethical business practices of preying on people you can invest in your local economy growing small businesses. This would cause the profits of large companies to shrink and they would see drops in stock prices.
2. As a gigantic movement, truly Occupy Wall Street when the prices are low. Purchase stocks in gigantic companies and spread your shopping around large businesses and small businesses. The prices will rise if everyone does this, and we can fire the CEOs and Boards of Directors that adopt the dog-eat-dog fighting business mentality with the traditional compassionate leadership that works with unions and pays their workers living wages. As owners of those corporations we can direct them as a gigantic movement with millions of people. We need to invest in all companies, even Monsanto and Exxon Mobil which rightfully have the disdain of millions, because only then can we bring down the price of oil that is holding our economy back and end abusive business practices. Fighting from the outside is futile. Espionage however is historically highly effective according to the Art of War.

This will make it so that the middle class can grow, to grow consumer spending. Let America Be America Again. http://www.poets.org/viewmedia.php/prmMID/15609

All votes outside of Washington, DC matter

I have done some statistical analysis on America's elections and found some interesting trends.
https://docs.google.com/spreadsheet/ccc?key=0ApuoFNoVh2fbdDNHUTZoSl9pUFRxSkhEbzgwXzA0M3c is the spreadsheet.

1. Texas is not as solid Republican as politicos believe it to be. With a voter turnout of 45% in 2008, the lowest in the nation, it would have taken only 5% of the population for it to have a majority Democratic vote. Given that Hispanics and African Americans are the groups that vote the least nation-wide, this is very possible that Texas could vote for Democrats for Congress and the Presidency in the near future if their turnout rose.
2. Washington state, a "solid Democratic state" would need only 600,000 more votes to vote Republican which would bring voter turnout up to 70%. Most states would need smaller amounts than these
3. Washington DC is the only place that has votes in the electoral college where changing affiliation is practically impossible because in order to increase the Republican votes would bring the total number of votes above the number of residents of voting age.
4. Missouri will become the most unreliable state if their voter turnout increased because it would have needed less than a tenth of a percent of eligible voters to change from Obama to McCain.
5. Arizona, the founder of the new voter discrimination laws, with only an increase of turnout of 4% of the population would vote Democrat. This is doable.
6. Wyoming, Oklahoma, Idaho, Utah, Alaska, Alabama, and Louisiana are the only Republican states that would need a voter turnout increase of over 10% of their populations to vote Democrat. All others are below the 10% mark.
7. Vermont would need an increase of 25% of their population to vote Republican. Hawaii would need an increase of 20% of their eligible population. They are the most solid Democratic states (excluding DC)
8. Democratic states in general tend to be larger than Republican states and would need a higher increase in turnout to vote Republican than most states.

The lesson to take away from this is that every vote counts. Even if your state hasn't voted differently for decades you should still vote for President, Congress, your Governor, and State Legislators because many key races in this country are very close and every vote can make a difference.

A pig is a pig by any other name

Whatever you call it, laissez-faire, Reaganomics, austerity, corporatism, or something else, that model of economics supported by many politicians is inherently flawed. The solution this philosophy consistently has to unemployment is to fire public sector workers and bust unions. No incentives for hiring workers, no eliminating barriers to starting small businesses, no health care to those too sick to work, no training for tomorrow's inventors, and cutting basic math, economics, civics, and science from public schools increasing the time the unconnected intelligent youth have until they can start their own businesses successfully.

Austerity teaches that if unemployment is high you increase it, if small business are too rare you limit access to funds by eliminating banking insurance (the opposite approach saved the American financial sector and through that the whole economy in 2008). If this is right it would imply the solution to a drink being too cold is to put ice in it or if your meat is overcooked to keep cooking it, and that -1+-1=0. That adding to a problem will solve it. This is nonsense.

The bloggers of economics that have millions of followers need to start broadcasting this. Suicides are up in Southern Europe. The countries practicing austerity have seen their unemployment rates go up over the past two years and suicides are rising. Lives of real people are at stake in this experiment that is as unsuccessful as it was between 1929 and 1933 when America did the same thing. The longer it is done the longer the recovery will be. This is very not funny. Wake up world. All the data you need to prove this is free on google data.

How Europe will get out of the austerity crisis

This current austerity crisis in Europe is hurting their economy. When I look at their economies, since austerity began in 2009, unemployment has risen across the European Union, decreasing consumer spending, hurting the economy and all businesses big and small. (Source: Public Data) I am going to say what I think will drive Europe out of this crisis and back towards investment and prosperity. In the meantime decreasing debts, which I see as a minor issue at most. The debt of these countries was blown out of proportion by economic neoconservatives like Merkel, News Corportation, and Sarkozy, among others.

1. Germany will vote in a left-wing government next year in September 2013 which will change the course of history. Merkel's push for divestment has hurt the economy of Europe and she will not be ranked highly in the future. Peter Steinbruck will be the next Chancellor of Germany. Most of the CDU's wins were by small margins: http:/s/en.wikipedia.org/wiki/File:Bundestagswahl2009_Zweitstimmen.svg so seeing a big flip with Merkel's misleadership over the past two years is possible. This will end a lot of pressure on Spain, Portugal, Italy, and Greece.
2. Europeans will vote for a liberal government in European Parliament in 2014 following their dissatisfaction with austerity and losing their jobs which will move the EPP (right-wing) to a minority and S&D (left-wing) to become the largest party in Parliament.
3. The European Parliament will propose an amendment to their constitution which will do the following to resolve the apparent issues of the European Union:
1. Banking regulations and insurance will be union-wide to avoid future bank runs from nations like Greece. (Source: Planet Money from NPR)
2. The regulations on debt will remain, but they will be required to cut social services last and raise taxes first. Looking at America's history this is clearly the most economical viable way. The fastest growing economies in American history were during the 1950s when our highest tax rate was above 70% and the 1990s when Clinton and Congress ran a balanced budget and taxes were higher than they are now on the rich.
3. There will be an investigation into bribery in the government participating most in this fiasco (Germany, Spain, Italy, Greece) which will come out with a lot of evidence to prosecute big companies, banks, and important politicians. Elections will happen across Europe. People will vote in better governments. Companies will be liable for bribery across the European Union.
4. The ability to form small businesses will be easier in the nations in Europe where it is lowest (which funny enough are Greece and Spain http://en.wikipedia.org/wiki/Starting_a_Business_Index) which will stimulate their economies. After decreasing barriers of entry in Belarus, their rank went from 98 in 2009 to 7 in 2010 and their GDP growth rate from 0.2% in 2009 to 7.6% in 2010. This is a crucial part of having a competitive economy. There is a clear correlation between the two. This will also help the distribution of wealth become more equitable, which will allow more people to enter into the middle class in Europe which will drive consumer spending higher and make a stronger economy. But it has to start with people having the ability to create their own businesses and make enough money to be comfortable. I just started a small Private Investigating Agency, so I am a small business owner, and like millions of other people I know exactly the level of benefits this brings to individuals, and to the economies that are driven by trade.
4. The EU will still exist, corruption will be less, and their economy will recover. With less bribery through enforcement of already existing laws, their copyright laws (which are the worst in the world) will liberalize, their banking regulations will strengthen the economy to prevent the outflow of cash that came from Greece to Germany and France, and it will happen in the next five years.

The Innocence of Muslims and murder

There is a lot of talk about blocking the inflammatory innocence of Muslims in response to the assassination of the American ambassador in response to that short video. That is the wrong approach. If we block all videos that incite violence, what is there to stop us in blocking hate speech, and who defines hate speech? Hate speech is hard to define and has many different levels. What one person finds offensive to their religion another person may agree with and use for educational purposes (creationists vs scientists). If we block anything that might offend anyone we will be left with a very small Internet. We will give power to the radicals that if they want something to be blocked all they have to do is try to kill the American ambassador in there country and be clear on what they are protesting. That is not an option. We would literally be giving the keys to the Internet to al Qaeda. A better option is to incarcerate the murderers with life in prison without parole (killing members of a group that uses car bombs in response to murder doesn't make sense) which isolates their members from society and forces them to live their lives out slowly contemplating their heinous crimes. Maybe they'll start to read the whole Quran not just their selective misguided selections. That is my opinion. I support free speech, a major difference between democracy and tyranny. There is a very slippery slope between the two.

A Tale of Two Companies

One day, there was a company that decided to run a strictly Keynesian approach to its business model. The Keynesian company was founded and ran a business model which took the money that it invested and saved it for future investment, payed their employees good wages, and kept their net revenue for future investment. Over ten to twenty years the company had reasonable prices, a good product, well paid employees that worked hard and several locations and the owners were very comfortable. They were known for the best service, best products, and good prices. During times when their revenue decreased, this company had cash saved to protect their existence and continue their employees wages and needed no assistance.

At another time, another company decided to run a strictly laissez-faire approach to its business. This company took a gigantic loan in the beginning to start a large company, paid its employees as little as possible and worked them as much as possible in a 40 hour work week. When they had positive net revenue, they cut their prices for as long as possible and had very little cash to sit back on. What cash was saved up was immediately given to the owners and the company ran by a shoestring. During the recession, they found that the demand for their product decreased, so they closed stores and fired employees (being their largest expenditure). The net loss in revenue from those locations was greater than the costs to hire employees but only in the long term. So, they closed more stores, and eventually were a tenth the size and were able to maintain their large salaries and have low prices. After the doldrums were over, they were a tenth the size they once were, by firing their employees and closing storefronts. They were not known for their products anymore because they had been surpassed.

I do want my government's finances to be run like a business, that is why I hate austerity and support Keynesian policies.

Obama 2012.