What will kill the 'golden goose'?

Friday, May 23, 2008

"The point is, ladies and gentleman, that greed -- for lack of a better word -- is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind. And greed -- you mark my words -- will not only save Teldar Paper, but that other malfunctioning corporation called the USA." -- Gordon Gekko, portrayed by Michael Douglas, 1987 film "Wall Street"

President Bush paid another visit to his friends in Saudi Arabia this past week in an effort to get them to increase oil production and bring down the price of crude oil. The Saudis have increased production to counter cuts in production from Venezuela and Mexico, but will not increase production to capacity.

Last week, Democrats in the U.S. Senate introduced a resolution to block $1.4 billion in arms sales to Saudi Arabia unless the nation agreed to increase its oil production by 1 million barrels per day. The Saudi oil minister commented after his meeting with the president last week was that "supply and demand are in balance today."

Yeah, right.

After the meeting, oil futures set new records.

The question now becomes how do you make the dollars stronger and make oil prices about supply and demand, and not about just making money?

Because, according to economists, the last time oil prices were about supply and demand was at the $60 a barrel price. Everything since is about making money on speculation and trading.

Our nation constantly preaches the value of the free market and competition. But the run up in energy prices of the last year has severely damaged our economy, which depends on consumer spending. Spending on energy has dried up much of the discretionary spending that has, in the past, kept our nation firing on all cylinders.

So, what's the answer? How long will our leaders allow this cycle of spiraling prices to continue unabated?

Will greed save us?