Why We Need Another John D. Rockefeller

This week we received more disturbing news on the current state of energy prices, as the price of a barrel of crude reached an all-time high of $118.00 on futures trading.  At the same time our so-called friends, the Saudis, announced that they have placed on hold any plans to increase oil production, which would help bring down the price.  Gasoline also reached an average national high of more than $3.50 a gallon, and many are expecting it to reach more than $4.00 a gallon, with $5.00 a possibility this summer in certain parts of the nation.  Politicians in Washington are searching for answers but as usual are clueless.

Yet the solutions to our problems are not in some fantasy utopian world, where we can all run our cars on some mysterious clean-burning fuel, but in the past when we did whatever was required to strengthen our economy and benefit America.  And in those days we never listened to extremists tell us it was beneficial to dismantle our economy on flimsy science.

American economic power skyrocketed in the decades after the War for Southern Independence.  Before the war, the United States was a second-rate power but by the end of the century America dominated the global economy, producing nearly a third of the world’s manufactured goods, as well as taking a leading position in mining and agriculture.

How did the United States transform itself in such rapid fashion?  Well there are several factors, including the imposition of a protective tariff and the lack of oppressive taxes and regulations.  But an often overlooked reason was the availability of cheap energy.  Industrialization and robust economic growth require vast amounts of energy.  And the man responsible for supplying most of it in the 19th century was John D. Rockefeller and his Standard Oil Company.

Rockefeller has been labeled by most historians, along with other entrepreneurs of his day, as a “robber baron,” a shrewd, cruel capitalist concerned only with enriching himself at the expense of the poor, working classes.  Although this was true for some, it was not the case with Rockefeller.  He was a superb businessman and incredibly efficient, seeking to make high quality petroleum products cheap and readily available for every American.  He did it the right way, with brains and brawn, the way America was meant to be.

There are, according to Burton Folsom in his book The Myth of the Robber Barons, two types of entrepreneurs – political entrepreneurs and market entrepreneurs.  A market entrepreneur is someone who uses the free market to build his business.  Good old American hard work!  This would be what we call a self-made man.  But a political entrepreneur is a businessman who cannot make it on his own and seeks government aid, such as subsidies, and legal protection, in the form of anti-trust laws, to gain an advantage.  These were the real robber barons.

Rockefeller was definitely in the former, a great market entrepreneur.  He was nearly obsessed with making energy cheap and available for everyone, using good business practices and the free market.  But his sole concern was not just cheapness but quality as well.  To one of his partners he wrote, “Let the good work go on.  We must ever remember we are refining oil for the poor man and he must have it cheap and good.” 

Before the age of electricity, homes were illuminated with kerosene lamps.  Five years after the war, in 1870, kerosene cost 58 cents a gallon, an expensive commodity, but with Standard Oil controlling 90 percent of the market, and Rockefeller’s incredible efficiency, he lowered the price to just 8 cents per gallon by 1880.  “Hope we can continue to hold out with the best illuminator in the world at the lowest price,” he wrote another partner.  This greatly benefited the poor in America, and enabled them to illuminate their homes.

Rockefeller was able to do this through the use of “vertical integration,” for which he is often criticized.  This practice is not monopolistic but effective at cutting costs, which lowers prices.  For example, oil in those days was shipped in wooden barrels, manufactured by coopers.  Standard Oil paid nearly $3 a piece for them.  Believing he could do it cheaper, Rockefeller bought vast tracts of timber land, built his own barrel-making operation, and cranked them out at just .96 cents.  This is true efficiency and helped bring prices down.  He did not engage in these practices to further enrich himself and try to control more of the market, as is sometimes alleged.

By controlling the product, in this case oil, from the time it left the ground until it was sold in stores, Rockefeller was able to cheapen it for the common man but also for American industry, which boomed during this period.  This is not a coincidental parallel.  The availability of cheap energy, and with a protective tariff guarding the gates against foreign predators, America’s economy employed millions of American workers and soon became the envy of the world, producing the material that won both world wars.

But what are we doing today?  The exact opposite of course.  Yes the oil companies have made record profits during this period of high prices.  In fact, of the top Fortune 500 companies in 2007, three oil companies – ExxonMobil, Chevron, ConocoPhillips – ranked in the top five, pulling in some $70 billion in profits.

But consider what they are up against.  They are prohibited from drilling in ANWR (Arctic National Wildlife Refuge) in Alaska, where there is a oil reserve of some 10.5 billion barrels, enough to end our imports from Saudi Arabia for two decades.  They are also restricted from opening up drilling in much of the Gulf of Mexico, where there is thought to be a vast reserve as well.  New reserves have also been found in the Dakotas and Montana, with no plans to drill.

At the same time, no new refineries have been built since the early 1970’s.  This is very important because it is in the refining process where the supply of gasoline and diesel is controlled.  Refineries are now at full capacity.  There is only so much they can do.  Current technology also exists to produce gasoline and diesel from coal, where we have a 500 year supply.  But as you might guess, there are no plans to invest in this new technology either. 

And let’s not forget, these same oil companies who are making record profits are also paying record taxes, to the tune of tens of billions a year!

With all these restrictions, oil companies have little available at their disposal to increase supplies and bring down prices.  We are now paying the piper for the environmentalist tune we have been singing for more than thirty years.

Today our economy runs on petroleum.  Always has and always should, for the foreseeable future.  As long as energy has remained cheap, our economy has excelled, but let energy prices inflate and our economy slows and sometimes slows dramatically.  The surest way to grind our economy to a halt is with inflation in the energy sector.

And yet even this very week we see environmentalist wackos trot out their other scare tactic, the fact that we are almost out of oil.  This is known as the peak oil theory.  But this is far from the case.  Estimates on global oil reserves vary but they are thought to be around 12 to 16 trillion barrels, whereas the planet has consumed just one trillion barrels to date, according to Nansen G. Saleri of Quantum Reservoir Impact in Houston, Texas.  There is plenty of fuel for our economy, we just need to find the will to go get it.

We also must stop listening to these environmental extremists, who cling to unproven theories, and do what needs to be done.  We need new drilling and new refineries, along with new nuclear power plants to free up coal for other purposes.  While we are busy bankrupting ourselves and listening to screwball environmentalists in Washington and New York City, China and Russia, our chief global rivals, are scrounging the globe for every available energy reserve.  They are gaining the high ground while we talk about creating new “green collar” jobs and putting sod on roofs to “green” our buildings.  How laughable!  China is even making inroads in the Gulf of Mexico and the Caribbean, gaining closer ties with Cuba to tap reserves  right under our noses.

But while our rivals look to build their economic futures, doing whatever is in their nation’s best interest, our country, led by the Bush Administration, is intensely focused on the idea of ethanol production as an oil substitute.  Corn-based ethanol is subsidized by the government at $2 billion per year and this folly is already having a negative impact on our economy.  As more and more farmers are switching their fields from wheat production to corn, food prices are increasing, by 11 to 25 percent last year depending on the commodity. 

And because of this asinine policy, for the first time in American history we actually had to import grain last year.  Corn prices are also increasing because we are burning it up for fuel.  This is also causing shortages for other uses as well.  The Breadbasket of the World is now in decline, all because of a ridiculous, unproven theory put forward by nutcases like Al Gore and Leonardo DiCaprio.  Our current policy is even having a global impact, as world food prices rose nearly 85 percent, causing food shortages and even riots in some countries like Mexico.  It will only get worse.

The upcoming election in November will determine the fiscal policy of this country for the next four years.  Of the three “major” presidential candidates, no one is talking about the real issues at stake.  We face major economic problems and neither the Republican or Democratic candidates seem to want to confront these issues with any degree of seriousness.  We need a president who will embrace America First policies, like our forefathers in the days of Rockefeller, and put this nation on a sound financial footing.  If not, our future looks very bleak.

China and the Bush Doctrine

The recent unrest in Tibet captured the attention of the world and showcased the true nature of Red China.  This was a golden opportunity for President Bush, and the Western World, to finally confront Communist China over its continued human rights record.  But we are reminded once again how shallow our president actually is when it comes to foreign policy.

President Bush has faced mounting pressure to boycott the opening ceremony of the Olympic Games in Beijing since the Chinese crackdown but has yet to make any decision on Tibet.  Other Western leaders, such as French President Nicolas Sarkozy and German Chancellor Angela Merkel, have expressed their intention to remain absent.  Yet the question remains why Bush will not do likewise, to show solidarity with Tibet and a united front against Chinese aggression.  This would at least show that he actually believes in the theme of his second inaugural address, which he seems to use only when it suits him.

On January 20, 2005, President Bush addressed the nation after taking the oath of office for his second term.  “America, in this young century,” stated the president, “proclaims liberty throughout all the world, and to all the inhabitants thereof.”  His new administration’s policy would be “to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world.”  The country would embark on the “idealistic work of helping raise up free governments.”  True conservatives rightfully cringed. 

The President continued:  “All who live in tyranny and hopelessness can know: the United States will not ignore your oppression, or excuse your oppressors. When you stand for your liberty, we will stand with you.  Democratic reformers facing repression, prison, or exile can know: America sees you for who you are: the future leaders of your free country.  The rulers of outlaw regimes can know that we still believe as Abraham Lincoln did: ‘Those who deny freedom to others deserve it not for themselves; and, under the rule of a just God, cannot long retain it.’”

But with all the high-minded idealism and artful rhetoric, how has his foreign policy been carried out towards China?  Has Bush stood with Tibet in its battle for liberty from Chinese aggression?  Has he stood with Taiwan, as its democracy is increasingly threatened by a China bent on conquest?  The obvious answer is no. 

Tibet is not an old province of China but has its own separate history.  It is an ancient civilization, and like any “nation” it has its own distinct heritage, language, ethnicity, and religion.  It is not culturally Chinese.  But Tibetans have battled China for independence since the mid-18th century.  The modern Communist nation under Mao, invaded Tibet in 1950 with the People’s Liberation Army, presumably to “liberate” Tibet from its freedom and independence.

According to the Heritage Foundation, the campaign was brutal.  “After invading Tibet in 1950, the Chinese communists killed over one million Tibetans, destroyed over 6,000 monasteries, and turned Tibet’s northeastern province, Amdo, into a gulag housing, by one estimate, up to ten million people. A quarter of a million Chinese troops remain stationed in Tibet.”

China has since instituted a campaign of cultural genocide, attempting to wipe all vestiges of Tibetan tradition off the map.

Taiwan, on the other hand, is of Chinese heritage.  But, in a manner reminiscent of the American South in 1861, Taiwan formed a government of its own, as democratic forces under Chiang Kai Shek fled the mainland, escaping Mao’s Communists during the Chinese Civil War.  The small island became the “Republic of China” in 1950.

When the United Nations was formed, and the Security Council set up with five permanent members, all victors in World War II, Taiwan held the Chinese seat, and did so until 1972, siding consistently with the United States in most issues before the council.  The seat was then stupidly given to mainland China, while the Nixon administration did nothing to stop it.  China, Kissinger said, must be brought in from the cold. 

Taiwan left the U.N. in protest and now does not possess sovereignty, with no U.N. recognition and no American embassy.  The U.S. maintains a “One China” policy but also vows, via treaty, to defend Taiwan against Chinese aggression and sell them weapons for their defense.  Someone figure this one out!

Mainland China has continued to threaten the autonomy of Taiwan, particularly over the issue of its independence.  As of now China has hundreds of missiles pointed at the island, which they fire over its airspace any time a Taiwanese election is held, to intimidate any and all for voting for pro-independence parties.  The Communist superpower also practices amphibious invasion techniques in the hopes of one day reclaiming what they regard as a long lost province.

The Bush policy toward China, like many of his predecessors, has been, in a word, disgraceful.  He has placed the Almighty Dollar ahead of his own idealism.  Either afraid to confront China militarily, or out of fear of losing the so-called Chinese market, Bush turns a blind eye toward an abysmal human rights record.

The Chinese government carries out forced abortions and sterilizations, censorship on a massive scale, including suppression of most forms of religious expression, executes over 10,000 prisoners a year with little or no due process rights, and engages in shameful organ harvesting.  These organs are taken, without consent, from prisoners who have died or been executed.  This is particularly disturbing when you take into account the fact that in Chinese culture you must enter the afterlife whole.  So the government is, in effect, damning these people in the spirit world.

And let’s not forget the brutal crackdown on peaceful demonstrators in 1989 in Tiananmen Square, where thousands of protesters were murdered, some brutally.  The first Bush administration threatened sanctions, namely trade restrictions, but after some Chinese sweet talk, predictably backed down.

Yet the United States continues to trade and borrow heavily from China.  Our markets are wide open to Chinese products, even those found to be poisonous, while U.S. products are not given the same liberty.  China continues to manipulate its currency to keep their products cheap.  There are no rights for workers, no health, safety, and labor standards, or any environmental regulations.  Products made in China are, in many cases, the work of virtual slaves, some making only pennies an hour.  Yet there has been no serious condemnation from President Bush.

And now with Chinese aggression front and center, President Bush will not even commit to a simple protest like the proposed boycott of the opening ceremony but plans to attend in person.  Young democracies around the world must feel some comfort in this display.

In making such strong statements in an inaugural address, President Bush was committing the nation to an enormous undertaking, one true conservatives do not support. 

I am not advocating Bush’s Doctrine or that we invade China over Tibet or Taiwan, but if the President of the United States is going to set forth a foreign policy of advancing the spread of democracy around the globe at least he should act like he means it by some small measure of protest.

But with China, we see more empty rhetoric.  The Bush policy seems to be that if you are a small country we can easily obliterate, then you must obey our dictates but if you might give us problems, militarily or economically, then we will let you do as you will and our policy does not apply.  This is madness.  Either follow your own policy or dump it!  And I would prefer we dump it.

Bush would have done better for himself by molding his foreign policy after one of his less-famous predecessors, John Quincy Adams:

“Wherever the standard of freedom and Independence has been or shall be unfurled, there will her heart, her benedictions and her prayers be.  But she goes not abroad, in search of monsters to destroy.  She is the well-wisher to the freedom and independence of all.  She is the champion and vindicator only of her own.”

John McCain the Liberal

Just when I think I might be able to hold my nose and vote for John McCain, as his mother has suggested, he does something to rekindle my utter disdain and prove once again that he is no conservative, as he claims, but a liberal wolf in sheep’s clothing. 

The Arizona senator and Republican nominee’s recent major address on foreign affairs could have easily been given by any Democrat in America.  The speech left me asking, why is it that both major parties seem to always agree, for the most part, on foreign policy?  Can we have a least one party that can believe in American Exceptionalism and put our nation first?

“We cannot build an enduring peace based on freedom by ourselves,” says McCain, “and we do not want to.  We have to strengthen our global alliances as the core of a new global compact — a League of Democracies — that can harness the vast influence of the more than one hundred democratic nations around the world to advance our values and defend our shared interests.”  So Senator McCain believes that we lack the strength to lead the free world, even if that should be our goal.  Apparently he does not believe in Jefferson’s great admonition to steer clear of “entangling” alliances.  Or, at the very least, he fails to see the utter incompetence and uselessness of many alliances.

“When we believe international action is necessary, whether military, economic, or diplomatic, we will try to persuade our friends that we are right.  But we, in return, must be willing to be persuaded by them.”  Persuaded by who?  France?  Germany?  Other members of Socialist Europe?  What if they disagree with us fundamentally on important policy issues that might injure our nation?  So a President McCain could easily be persuaded by, say Germany, to abandon certain programs that might be good for America. 

“If we are successful in pulling together a global coalition for peace and freedom — if we lead by shouldering our international responsibilities and pointing the way to a better and safer future for humanity, I believe we will gain tangible benefits as a nation.”  International responsibilities?  What’s he running for U.N. Secretary General?  Not exactly the next George Washington.

“The United States did not single-handedly win the Cold War; the transatlantic alliance did, in concert with partners around the world.”  This is certainly news to me.  It may technically be true but we spent 99 percent of the money, did 99 percent of the work, and provided all the leadership.  Nations around the globe looked to us for help and nowhere else.

Again and again McCain demonstrates that he is a liberal and does not believe the United States to be, as Lincoln called it, the “last best hope of earth.” 

The rest of his liberal record is no secret. 

He voted against both Bush tax cut packages in 2001 and 2003, the one true conservative policy of this current administration, but only now says they should be made permanent, or at least that was his position during the primary season.

He has taken the extreme liberal position on one of the greatest hoaxes in recent history – global warming.  To combat it, McCain proposed in 2003, along with his good friend Senator Joe Lieberman, a “cap and trade” bill that would limit greenhouse gas emissions, thereby crippling U.S. industry, presumably as other nations, like India and China, increase their production and expand their search for the world’s vast energy reserves.

McCain has also opposed drilling in ANWR, the Arctic National Wildlife Refuge, to tap a huge reservoir of domestic oil.  Domestic production, along with new refining capability, would lessen our dependence on foreign sources and help drive down costs.  Yet he sides with the Left on these important issues.

Or as he put it in his address:  “We need a successor to the Kyoto Treaty, a cap-and-trade system that delivers the necessary environmental impact in an economically responsible manner.  We Americans must lead by example and encourage the participation of the rest of the world, including most importantly, the developing economic powerhouses of India and China.”  So we will encourage China.  I can tell you how that one will come out.

And Kyoto would have devastated what remains of our industrial base.  Recall in 1997 the Senate passed a resolution by a vote of 95-0 that essentially rejected Kyoto.

“I will establish the goal of eradicating malaria on the continent — the number one killer of African children under the age of five.  In addition to saving millions of lives in the world’s poorest regions, such a campaign would do much to add luster to America’s image in the world.”  But it is the environmental extremists who are solely responsible for the spread of malaria.  This dreaded disease, which killed so many for so long, was almost eradicated from the planet with the pesticide DDT, only until the girly men environmentalists lobbied weak-kneed liberal politicians and had it banned in 1972.  Since then malaria has re-emerged as a major global killer.  Liberal compassion at its finest!

McCain has also proposed closing Guantanamo Bay and treating terrorists, who show no mercy on their enemies, with compassion.  “We must fight the terrorists and at the same time defend the rights that are the foundation of our society,” he says.  But these thugs are not protected by the Geneva Convention, despite liberal claims to the contrary, and are not subject to any special treatment.  I am not suggesting mass murdering them but we cannot give them the same rights we enjoy under our Constitution, as McCain advocates. 

And closing Gitmo?  Terrorists held there eat better than most Americans do, get free Korans, prayer blankets, and are allowed to practice their religion to its fullest, with the exception of Jihad!  We just can’t pour a little water on their heads!

McCain’s economic views are just as screwy and liberal.  He has even stated, on many occasions, that the economy is not his strong suit.  This is not exactly the time for a guy who has no clue what to do in an economic crisis!

At this moment our economy is teetering on recession and very fragile.  And free trade is one policy that has contributed mightily to it, as trillions of dollars have been transported out of this country in the last decade and a half, as our industrial base has deteriorated.  But McCain – Mr. I don’t know much about the economy – still holds tight to free trade.  “Ours can be the first completely democratic hemisphere, where trade is free across all borders, where the rule of law and the power of free markets advance the security and prosperity of all.” 

McCain has also stated that “free trade has been the engine of our economy.”  But if you will look at the data you will find that American free trade has been the engine of China’s economy!  So far free trade has not been proven to benefit our overall economy, only those big corporations allowed to outsource production to foreign nations, laying off their American workers.

McCain believes, as do all liberals and pseudo-conservatives, that it is in our best interest to prosper EVERYONE, which will in turn benefit us!  What about our wealth, which we are losing every day? 

And those that aren’t prospering in Mexico or other Central American nations?  Well McCain will just invite them here to prosper.  Remember this guy tried his hardest to pass an amnesty bill, along with Ted Kennedy of all people, to allow ALL illegal immigrants, some 20 million or more, to stay in this country.  It has been a cause he has worked for all his public life.  Only now does he say that he believes in securing the border first!  Does anyone wanna fall for this garbage?  If he believes in secure borders, coming from a border state, why has he done NOTHING as of yet?  The answer is obvious:  He’s a liar!

And finally we must not forget that McCain is anti-Constitution, no matter what he says.  His McCain-Feingold campaign finance reform bill essentially tore up the First Amendment.  And now he proposes going further and banning all the 527 groups.  He even denounced the Swiftboat Veterans for Truth during the 2004 campaign for attacking fellow Vietnam vet John Kerry.  So if any American citizen feels passionately about a particular political issue and wants to promote that issue through the formation of a advocacy group, a President McCain would prevent him from doing so! 

For true conservatives, this man does not need to be anywhere near the Oval Office.