[R-G] [BillTottenWeblog] The Cure for High Gas and Food Prices

[Bill Totten]

Vital Businesses Need Nationalization

by Ted Rall

www.rall.com (June 26 2008)


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 twenty cents in the time it took me
to drive from the curb to the pump.

"You're kidding me", I moaned.

"It's three 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 nineteen 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 fifteen-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.

Postscriipt: If you're reading this in Caracas, please mail me some gas.

Ted Rall is the author of the book Silk Road to Ruin: Is Central Asia
the New Middle East? (2006), an in-depth prose and graphic novel
analysis of America's next big foreign policy challenge.)

Copyright 2008 Ted Rall

http://www.uexpress.com/tedrall/?uc_full_date=20080626


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