We need a tariff on oil

(This appears in today’s American Thinker.)

Oil tankers are used to store oil, as well as transport it.  Rates for these tankers are brokered, and right now they’re going through the roof.  The world is rapidly running out of storage space for crude.  By June it could well be full up.  At that point, some producers are going to have to shut down.  You can’t pump it if you don’t have any place to put it.

The Saudis, of course, know all this, and you can bet your bottom dollar they won’t be forced to shut down their production.  They’re paying top dollar for the dwindling number of tankers still available.  The Saudis don’t care how much it costs.  They’re going to drive other producers out of business.  Period.  Money doesn’t matter.

They are strutting their stuff, the big dog of the oil patch, and they have mind boggling amounts of money.  The 34 year old boss, Mohammad Bin Salman, is the new kid on the block.  He’ll be in power for 40 years.  He can take the long view, and in the long run he wants all the world to know what kind of a man they’re dealing with.  A badass, just like his grandfather.  A guy who can’t be intimidated, a guy who doesn’t make threats that he doesn’t back up.

The main Saudi target is the American shale industry, but I doubt President Trump will allow that to happen.  We want to be not only energy independent, but energy dominant.  That requires a healthy shale industry.  Trump will impose a tariff on oil, getting the American, protected, market back up to reasonable levels  —  above $35 a barrel.  Americans who are still driving will still be getting inexpensive gas.  And most Americans aren’t driving, so they won’t care.

Once the Saudis have driven other foreign production out of business, they’ll end the price war, and the President can remove the tariff.  With an intact shale industry, we will always be energy independent.

The last time the Saudis really put the screws to the other oil producers was in the early 80’s.   I remember it well.  I was in the state legislature of Alaska, an oil dependent state, and economy.  They drove the price on the spot market down to $8 a barrel.  Alaska was going broke.

And so were the Russians, who got 90% of their hard currency from selling oil.  Their oil revenue collapsed, they couldn’t possibly afford an arms race, and they were forced to cut a deal with President Reagan.

This was all part of the Reagan administration’s plan.  In one of his very first acts after assuming office, the new President used all his good will and political capital to push an arms sale to Saudi Arabia through Congress.  It just squeaked through the Senate, 53-47.

Israel was extremely angry about this sale, and used all its influence in Congress to defeat it.  The Saudis were acquiring AWACS planes, which would give them early warning of an air strike from Israel.  With AWACS deployed against it, the Israeli Air Force lost the element of surprise.

Strangely enough, shortly after the Saudis took delivery of their AWACS, and got it up and running, they announced a price war.  The other world producers were not doing their share in holding down production, so the Saudis were going to give them a lesson they would never forget.  They flooded the world with oil, and broke the back of the Soviet Union.

Don’t underestimate Mohammad Bin Salman.  He’s out to prove himself, and he knows how to do it.  It’s a family tradition.

Fritz Pettyjohn was a State Senator and State Representative from 1983-1991.

{The world is running out of oil tankers, and the companies that own them are engaged in a merry bout of price gouging.  For stocks like NAT and DHT the oil glut is a bonanza.}

 

 

 

 

 

Step up, Cuomo

It’s time for Gov. Andrew Cuomo, the de facto leader of the Democratic party, to take the next bipartisan step toward economic recovery.  The stimulus bill is not enough.  In addition, we need to spend a trillion dollars on critically needed infrastructure improvement.  New York’s needs, in particular, are urgent.

On Wednesday Sleepy Joe Biden declared for an infrastructure bill, pointing out that, “It’s a way to generate growth”.  But his idea of infrastructure is the Green New Deal, an environmental boondoggle.

New York, like the rest of the country, doesn’t need windmills.  It needs $150 billion for mass transit, railroads, airports, highways, bridges and tunnels.

Cuomo needs to ask President Trump to sit down with him and put together a plan to help New York.  If Cuomo leads, other Governors, and the Democrats in Congress, will follow, and the next step toward economic recovery can be taken.

Cuomo, and the Democrats, must swallow their pride and give Trump what he’s always wanted, a chance to build.  It’s what he knows, does, and enjoys the best.

This may help Trump get reelected.  But political considerations cannot guide policy in a war, or a crisis.  We’re all in this together.  And if we can get out of this recession quickly, there will be plenty of credit for all.

 

 

On the road to Damascus

After thinking about it for 37 years, I’ve finally figured it out. All of my political involvement on behalf of Article V has been misguided. I have now seen the light.

First and foremost, any Article V amendment must be bipartisan. Back in 2013 I saw a red wave coming, a wave so big that it would make it possible to get 34 Republican legislatures to call for an Article V Balanced Budget Amendment Convention. I was right about the size of the wave. From 2014 to 2018 it could have been done without one Democratic vote. But it was a hill too high, and Republican holdouts, many of them associated with the John Birch Society, stopped our efforts.

Second, it can’t be accomplished by outsiders. It can only happen when state legislators themselves take the lead. That’s how the BBA got up to 32 states in eight years. At that point, in 1983, it stopped being bipartisan. The national Democratic Party killed it, and it hasn’t ever recovered.

Third, my attraction to Article V is one which is not shared by Democrats. I’m a libertarian, and I want to restrain, reduce, and control the federal government. Democrats aren’t really interested in any of that. They want the government to work. They want to reform it.

So there are a substantial number of Democratic state legislators who have embraced Article V as a means to get campaign finance reform.  Republicans are leery, afraid that their principal source of campaign funds will be eliminated.

What all state legislators who support Article V have in common is their desire to reform Washington, to drain the swamp, a swamp awash in massive corruption, much of it financed by corporate America.

So the key to Article V is to identify and organize Reform Democrats and Reform Republicans.  Once they have organized they can decide among themselves on a constitutional amendment they can both agree to.  At that point these Reform state legislators can pass the necessary Article V resolutions in their respective capitols, have an Article V Convention, and amend the Constitution.

But only if 38 of the 50 states agree.  So nothing can be ratified if it can’t get to 3/4, and if something can’t be ratified it won’t be proposed.  This guarantees the highest level of bipartisanship.  I know how hard it is to get a 3/4 vote.  In 1988 some Alaska state legislators wanted to set up a Constitutional Budget Reserve, a rainy day fund.  I would only agree to go along if it required a 3/4 vote to get into.  To this day, Alaska state legislators refer to this as the Pettyjohn Rule

And it worked.  They weren’t able to get their grubby hands on that money for 30 years.  It took them that long to get the 3/4 majority needed.

So the new American constitutional entity which will emerge from a successful Article V movement, the Convention of States, will only be able to function with the highest degree of bipartisanship.  It will be a model of decorum and legislative courtesy.  It will put Congress to shame.

So this new branch of the federal government, the Convention of States, will be respected by the people, and assume its rightful role as the ultimate guardian of American liberty.

The fix is in, so don’t bother to vote

There is a smell of filthy lucre floating about the Democratic party.  The money Democrats have spoken, and they want Biden nominated on the second ballot.

In one month, the chances of a brokered convention have gone from 17% to today’s 69% (according to 538.com).  And a brokered convention is one in which the money boys say the big vote winner, Sanders, loses to the second place finisher, Joe Biden.  The bettors are now giving Biden a 47% chance of the nomination, up 20% in one day.  Money talks.

Unless.   There’s one thing that could blow this whole thing up, and that is Sleepy Joe.  He’s mumbled and ambled through the campaign so far, but it’s not hard to see how he could completely blow it.  That’s what I’ve been expecting to happen, and it still may.

But if not the Bernie Bros may be mightily upset in Milwaukee come July.  And I doubt they’d take it lying down.  That’s the real drama that could nail down a Trump landslide.

 

The mad, mad world of a brokered Democratic convention

The number to pay attention to over at 538.com is the chance of a brokered Democratic convention.   Nate Silver has built a model which shows the likelihood of no candidate having a majority of delegates in Milwaukee four and a half months from now.

Less than three weeks ago, on February 10, there was just a 25% chance of a brokered convention.  At the time, Sanders had a 48% chance  –even money, really —  of having a majority of delegates, and winning on the first ballot.

Today Sanders chances of a majority are down to one in three, and after failing spectacularly with black voters in South Carolina, those chances will go down even more.  Right now there’s a 52% (now up to 58%) chance of a brokered convention, and I bet that gets a boost after the results from South Carolina are factored in.

A brokered convention means a broken Democratic party.  Nobody will want to back down, and there will be a days and days of acrimony and spectacle just made for TV and Twitter and YouTube.  The media would go wild.  It would be an absolute debacle.

Normally, national political conventions are just a boring rubber stamp, along with endless speeches.  Milwaukee 2020 could be one for the ages.

Six weeks later, at the end of August, Trump will be coronated in Charlotte, North Carolina.  It won’t be a political convention, it will be a giant Tribute to Trump extravaganza.  A unified and energized Republican party will emerge to rally behind the President, against a divided and dispirited Democratic party.

That’s what a brokered Democratic convention would mean, and that’s what to watch for.

This is in today’s American Thinker