Ruled by Fools

Are Democrats foolishly playing a losing hand? This week a Dem talking point against US oil exploration was that the oil companies are exploring only a fraction of the existing lease areas in the Gulf of Mexico. To the 70% of Americans in favor of expanded drilling, this may not matter. They want relief. But for now, the Democrats continue to frame the issue in partisan terms:

U.S. Sen. Bill Nelson, D-Orlando, said speculators have been driving up the price of oil internationally — and that the industry has explored only 8 million of the 39 million Gulf acres it already has under lease. He said the Bush administration and the oil industry are using gas prices to hoodwink the public.

"Clearly, Americans are being gouged," said Nelson. "But we cannot allow the administration to take advantage of the situation to give away the store before the president leaves office."

Democrats seem to be united in their opposition to increasing US domestic oil production. Instead they once again accuse Republicans of being in bed with big business. Their solution is to impose more taxes on the oil companies for their "windfall profits" but they also agree that speculators have been contributing to the spiraling oil prices.

Saudi king blames oil prices on speculators, taxes

King Abdullah has blamed soaring oil prices on speculators, high fuel taxes in consuming countries and increased consumption in developing countries.

Abdullah said the kingdom is ready to meet any "additional needs in the future." But he did not specifically say Saudi Arabia would increase oil production beyond the 9.7 million barrels a day production it has already announced.

The king suggested the creation of an energy initiative to help poor countries confront the high cost of fuel.

The U.S. and other Western nations have put increasing pressure on Saudi Arabia to increase production, saying insufficient oil production has not kept pace with growing demand.

Goldman Sachs has been the golden boy of Wall Street as it continues, quarter after quarter, to show a profit even as lesser firms such as Bear-Stearns disappear altogether. Although their reported first quarter profits were less than a year ago, they are still in the black in large part due to their to speculation in the oil futures.

A convergence of circumstances and short-sighted policies has resulted in a perfect storm which will require more cooperation and less partisan politics. Democrats continue to blame the money grubbing capitalists but eventually they will have to face the political realities. As consumers pay higher prices at the pump, those who offer no relief will pay higher prices at the polls. Democrats are accusing politicians like McCain and Florida governor Charlie Crist of flip-flopping on the drilling issue but something tells me it won't be long before we see more and more poll reading, finger in-the-wind Democrats change their tunes. When it comes to drilling, it's a no brainer; either get on board or commit political suicide.