Outside the Box

Did you watch the news last week? If not, you didn't miss a thing that you haven't seen fifty times before. In D.C., the “March of the Idiots” continued their parade of blame and deception, and we heard the same speeches that go back to the age of VCR. 

The two hot topics were Putin-Syria-ISIS and Gun Control. Let’s save “guns” for another day and talk about what’s going on with Russia and the Middle East. 

Let me write a “pretend” letter. 

Dear Mr. Kerry and Mr. Obama,

Russia isn’t listening to a word you’re saying. You’re amusing them. They are laughing at you. You’re making us all look like fools. Please Stop it!

Sincerely,

Scott Sangalli

So if “talk” won't work, what will? What works 99.9% of the time? What is the source of all power grabs, political aggression, and social injustice?

Answer: MONEY

So, if Obama’s “diplomacy” (which is another word for “I don't know what to do”) isn't working, how do we use money?

To understand where I’m about to go, you’re going to have to venture from your “comfort zone”. In fact, I had to jump way outside of my “minimal-government, conservative box”. Once I was able to do so, all of the pieces fell into place for all of the right reasons.

I would like to say that my idea is novel, but what I am about to propose virtually mirrors a letter that I wrote to our president in 2004.  Isn't it funny how some things never change?

Here we go. Hang on. 

To get started requires that we have to make some basic and underlying assumptions.

1. Putin and Russia have to fund the cost of their aggressions.
2. Russia’s overwhelming source of income is from oil production.
3. ISIS, Iran, and terrorist aggression cannot be funded without money.
4. The money funding ISIS and other terror groups is derived almost entirely from oil.

Get the picture? 

Oil prices are low right now and American’s are loving the lower gasoline prices. But, prices will go up at some point because the current market is below the sustainable cost of production. No “new wells” will lead to a diminished supply which will lead to higher prices (ECON 101, Chapter 1, Page 1).

So here’s the plan:

Gather the major oil producers (both independent and publicly owned) in one room. Lock the doors. Bring in a handful our best economists and accountants.

Pose the question: At what price (per barrel) , if guaranteed and indeterminably sustained, would be a “fair price” for you to fully develop our oil resources within these United States? Of course, they’ll start high but that’s why the accountants are there - to keep ‘em honest. When the dust settles, my guess is that everyone would walk away content with prices between $70 and $75 per barrel. Without getting mired down in the details of “inflation clauses”, etc, I believe that an agreement could be reached. (At the risk of saying the obvious, if world markets exceed the agreed price, only that oil not consumed in the USA would become available for export.) 

Here’s the goal. Create a price structure that would entice the oil companies to expand our production so that we would be energy independent within 5 years. As such, our consumption of and reliance upon non-domestic oil would decline and ultimately disappear. And then without question OPEC will continue to manipulate the markets to avoid collapsing prices. However, our economy would no longer be at their mercy. “Stability” is a critical component of economic health. When essential elements of an economy are highly volatile, anything can happen (and it’s usually bad). 

One might argue that the current below-market gasoline prices would go away. Perhaps so, but so would $6.00 gasoline. The fact is that today’s low prices are temporary. Under this plan a gallon of gas would stabilize at or around $2.50 - with only minor escalations each year thereafter. 

And if there is a temporary side effect, the long-term benefits are astronomical in comparison. Adding $300 billion per year to our economy would create over 3-million jobs. We would keep countless $billions out of the hands of our terrorist enemies. The stock market would stabilize and be far less subject to emotion and manipulation. Best of all, other oil-producing nations might follow our lead thus further shrinking world demand. None of which is good news for Putin and his one-trick-pony, mother Russia.

In the interest of brevity, this is only a “thumbnail” sketch and worthy of much more discussion. But hopefully I’ve got you thinking.

I will offer this in conclusion. If you’re like me and having trouble with the thought of our government regulating oil prices, then Get Outside the Box (briefly). I consider oil, water, and our essential natural resources to be property of the people - not the government’s, nor that of multi-national corporations. This plan prohibits the exploitation of these resources and guarantees the maximum benefit attainable to those who truly own those resources  - We The People. 

Any questions? Contact me at Scott@Sangalli-Inc.com

Sincerely,

Scott Sangalli