Hillary Clinton is taking on OPEC in her campaign to get to the White House. She introduced a new plan yesterday to hold OPEC accountable to American consumers. Her website explains that, "Hillary is calling on the President to engage in immediate negotiations with OPEC members and, if no progress is made, file a formal complaint against OPEC countries at the WTO."
Translation (acknowledging the script for Team America). "We are very unhappy with you. We are going to send you a letter, telling you how very unhappy with you we really are. Really."
The proposal continues, "Filing a complaint at the WTO will send a clear signal to OPEC countries that the U.S. is committed to an open, transparent global oil market. Such a step will give OPEC members an incentive to increase production as well."
The only signal OPEC is paying attention to is the price signal. Despite the bellyaching, the high oil price hasn't led to lower American demand. When that happens, we'd expect oil prices to fall. OPEC has every incentive to produce as much oil as it can at high prices. But as oil producers, OPEC nations have to manage their resource-and not for the benefit of American consumers, but for themselves.
Here's the great part of Hillary's proposal. She's going to change the law so Americans can sue OPEC! Here changes would, "Allow OPEC Production Decisions to Be Challenged Under U.S. Anti-Trust Law - Currently, OPEC countries cannot be challenged under U.S. anti-trust laws, even when they are engaged in coordinated, commercial activity to control the global oil market."
How unfair is that? You can't sue foreign companies for violations of your own national laws? Here you get a glimpse of the supra-nationalist tendencies of Hillary (and most politicians, to be fair). "Hillary supports amending the Foreign Sovereignty Immunities Act so that the Justice Department can bring suits against OPEC countries in U.S. courts for price fixing. Changing the rules would help hold OPEC countries accountable for their decisions."
Absolute first class grade-A garbage. OPEC only controls 40% of world oil production. It is a major force in the supply of oil. But getting OPEC to pump more oil isn't going to solve the problem of Peak Oil. It will only accelerate the rate at which we deplete existing reserves.
And really, is there a more heavy-handed, ham-fisted, lame-brained, anti-Liberal example of big government at its worst? Changing the rules to favour one group over another is the standard tactic of anti-free market do-gooders. The rules usually get changed to favour one group over another, depending on the political flavour of the day.
This reduces all politics to a contest over who gets to make the rules. It concedes that meddlesome rule-making is the appropriate role for government. Wouldn't it be so much simpler if governments stuck to general rules that were fairly applied, without prejudice, to all people?
In any event, it's going to be an entertaining few months in politics. Which American presidential candidate can make the biggest basic economic blunders. It's a three-horse race between Clinton, Obama, and McCain. They will all win... and it's a pretty sure bet the American people will lose.
Dan Denning
The Daily Reckoning Australia
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About the Author
Dan Denning is the author of 2005's best-selling The Bull Hunter (John Wiley & Sons). He began his financial publishing career in 1997 and has covered financial markets form Baltimore, Paris, London and, beginning in 2005 Melbourne. He’s the editor of The Daily Reckoning Australia and the Publisher of Port Phillip Publishing.
Comment by Coffee Addict on 6 May 2008:
Hillary is smart enough to know that the proposal will never get up. In my opinion, she's just feeding the chooks in the hope that enough "dumbo" super delegates will vote for her tenacity. She may well succeed.
She's a person who can reinvent her style to suit the moment. Many people love it! As to her character, she is coming over to me as a media personality than a stateswoman. But then taking this approach is her only option at the moment.
Should she win the presidency, I would simply expect more of the same from the US. Who ever wins is likely to hold office for a single, economically unpopular term as the cards have already been dealt.
Comment by Curt on 7 May 2008:
The problem with high oil prices is the low value of the dollar, which is because of the Fed monetary policy. If Hillary wants to sue someone, she should sue Fed reserve chairman Ben Bernanke and Treasure secretary Paul Paulson. They are creating the inflation around the world. It fact, as soon as the rest of the world figures this out, they are going to want to sue the US - and replace the dollar as the world reserve currency.
Comment by Unpopular Truth on 7 May 2008:
I'm not going to comment on the quality of US candidates, however I will say that I haven't laughed as hard as I did yesterday when I read that Clinton wanted to sue OPEC for cartel activity
Next, she's going to demand that the sun start shining twice as hard to break the oil monopoly and make solar power better. Otherwise they'll nuke it.. yeah.. take that you dirty sun.
If she wants to break up OPEC, she better get a lot of military hardware and get ready to start conquering countries GWB style. After all, thats what Iraq was about anyway. Securing energy supplies.