Light Summer Reading

In an election year, you can't expect a lazy summer on the political scene, but a new book promises to heat things up even more.

Former White House Press Secretary Scott McClellan has written a memoir of his years (2003-2006) in the White House, "What Happened: Inside the Bush White House and Washington's Culture of Deception." Scheduled for release on June 1, the book includes harsh criticism of the Bush administration.

First announced in an article on Politico.com, McClellan's book offers little new information (unless you consider the fact that Bush has not been “open and forthright on Iraq” to be a surprise). The White House seemed a bit off-balance by the news of the book, but quickly came up with the overused "disgruntled former employee" explanation.

Bush's former advisor, Karl Rove, comes under fire and was quick to come to his own defense on Fox's Hannity & colmes last night. Rove complained that McClellan "sounds like a left-wing blogger," which I gather applies to anyone who doesn't follow the Republican Party line.

Rove and others in the White House are accused by McClellan of being involved in the cover-up that followed the "outing" of covert CIA operative, Valerie Plame. Rove's suggestion that "if (McClellan) had these moral qualms, he should have spoken up about them" was laughable, given Rove's history of political dirty tricks going back to Watergate.

McClellan's motives will certainly be called into question, and his explanation that he wrote the book as some form of personal contrition may or may not be accurate. That's not the point.

I'm not a big fan of "tell all" books. Still, this one may be different in that it was written by someone in a unique position to know how the truth can be distorted by a few elected leaders, who pursue agendas that are not in the best interests of our country.

And this is something we should all understand.

The Big Oil Parade

With oil reaching $134 a barrel, and gas costing over $4.00 a gallon, it's not surprising that Congress has chosen to "solve" the problem by having a parade of oil company execs testify before Congress. This is all for your benefit, so sit back an enjoy it.

The idea that Congress will impose a windfall profits tax only a few months after they failed to eliminate subsidies for Big Oil (see An $18 Billion Drop in the Bucket) is absurd.

Meanwhile, Fox News Channel's Sean Hannity has once again added to the confusion by claiming that Big Oil makes only 8 cents per gallon of gas. Well, he's close, but the oil industry's own estimate for 2007 is 8.3 percent, after taxes, which would be 8 cents if you could still buy gas for a dollar. In the real world, this is about 55 cents a gallon profit before taxes, assuming the 40.7% corporate tax rate the industry claims (which is also inaccurate).

The oil industry's lobbying arm American Petroleum Institute (API) has published some very useful information on their web site. Even if we take this information at face value, it raises interesting questions:

It's safe to say that the current Return on Investment (ROI) is now over 25%, and far above the 5% to 10% historical average for oil and natural gas companies. The API makes a valiant attempt at showing that profits are in line with other industrial companies, but I don't entirely buy the argument, and I suspect the picture for 2007-2008 would look very different.

All companies operate within a range of normal supply/demand, but the question is: when does this rise to the level of profiteering? That is, at what point are profits excessive, simply because oil is a commodity in short supply, and they are in a position to take advantage of the situation? The question is important because we are likely to face the same issue for a variety of other commodities in the years ahead.

It would be unfair to blame the skyrocketing price of gasoline entirely on Big Oil. While I would like to see Big Oil tax subsidies eliminated, the larger culprit is the devaluation of the United States currency.

When compared with 2001 when George W. Bush took office, today's dollar is worth about 40% less when compared to its value against other foreign currencies 8 years ago. When you're buying goods that trade on international markets, this makes a big difference.

If Congress and our next President want to get serious about the issue, they'll begin to address the national debt. It's more than a coincidence that the dollar's value has been cut in half over the same 8 year period that the national debt has nearly doubled.

More on this later.

A Greater Threat Than War

Although I've been reluctant to write about the war in Iraq, as the human and financial cost of the war becomes painfully obvious, an historical perspective on our situation is worth considering.

By now, it's evident that the original premise for the war (Weapons of Mass Destruction, etc.) never existed, our efforts have nothing to do with safeguarding our nation or eradicating terrorism, and we have no plausible exit strategy (apart from John McCain's "100 year" scenario).

The question remains; why did we enter into this war? In history, wars have always been periods of social change. They are also periods of consolidation of power and great wealth.

In my lifetime, Dwight D. Eisenhower offered this warning in his Farewell Speech to the nation, shortly before leaving office in January, 1961:

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

Greatly influenced by World War II and the Korean conflict, as well as the Cold War, Eisenhower's speech is a memorable example of Presidential leadership based on a true understanding of what leads nations to war. Eisenhower's admonition that responsible citizenship includes taking the time to become informed is in stark contrast to those who confuse "patriotism" with blind acceptance of what we hear in a television sound bite.

Almost 100 years before Eisenhower's speech, in a letter to (Col.) William F. Elkins dated Nov. 21, 1864, Abraham Lincoln wrote:

We may congratulate ourselves that this cruel war is nearing its end. It has cost a vast amount of treasure and blood. . . . It has indeed been a trying hour for the Republic; but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war. God grant that my suspicions may prove groundless.

President Lincoln also understood the danger of political and military agendas driven by greed, rather than the true interests of our nation.

This passage gives me both despair and hope. Despair because it seems we've learned so little over the past 150 years. And hope because it was recently brought to my attention by my daughter.

Maybe there's hope for an "alert and knowledgeable citizenry" after all.

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For the sake of accuracy, it should be mentioned that the Lincoln quote is the subject of controversy, and a copy of this letter is not available today. The quote is most often traced back to two sources:

The Lincoln Encyclopedia, by Archer H. Shaw (Macmillan, 1950, NY)
Abraham Lincoln: A New Portrait by Emanuel Hertz (Horace Liveright Inc, 1931, NY).