Reading On The Toilet

Illustration by Victor Juhasz

The latest issue of Rolling Stone magazine has an article that is definitely a must read.  Before linking to it I’d like to first say that the author makes the unfortunate mistake of cursing throughout it (making it far less likely that the mainstream media will link to or comment on it), and unfairly picks only on Goldman Sachs.  There is a LOT of blame to go around…borrowing money you shouldn’t is your fault as much as it is the lending bank’s, etc.  For all the articles flaws though, it’s interesting, thought provoking, and throws light where it should shine.  A couple of quotes:

…as the presidential campaign heated up, the accepted explanation for why gasoline had hit $4.11 a gallon was that there was a problem with the world oil supply. In a classic example of how Republicans and Democrats respond to crises by engaging in fierce exchanges of moronic irrelevancies, John McCain insisted that ending the moratorium on offshore drilling would be “very helpful in the short term,” while Barack Obama in typical liberal-arts yuppie style argued that federal investment in hybrid cars was the way out.

But it was all a lie. While the global supply of oil will eventually dry up, the shortterm flow has actually been increasing. In the six months before prices spiked, according to the U.S. Energy Information Administration, the world oil supply rose from 85.24 million barrels a day to 85.72 million. Over the same period, world oil demand dropped from 86.82 million barrels a day to 86.07 million. Not only was the shortterm supply of oil rising, the demand for it was falling — which, in classic economic terms, should have brought prices at the pump down.

The article goes on to explain that speculation was to blame for the spike, and mostly as a result of Goldman Sachs.  Another interesting quote regarding oil prices and speculation:

Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed.

This is alarming not only because of the negative effect that high oil prices have on the lives of ordinary people, or the fact that they allow tyrants to more easily remain in power, but also because as one commodity goes, so do others.  According to the Rolling Stone’s article, commodity speculation also forced “an estimated 100 million people into hunger and sparked food riots throughout the Third World.“  This is horrible, and something needs to be done about it.

Pages 5, 6, and 7 of the article are the best in my opinion, and my hope is that readers aren’t turned off by the author’s style on the first page and click off.  The portions on the rigging of the bailout and the next predicted bubble, alternative energy are excellent.  Many people bash the republicans on alternative energy and the fact that most of them go against science by denying climate change is real.  But few of them point out how self serving and two faced people like Al Gore are:

Nobel Prize winner Al Gore, who is intimately involved with the planning of cap-and-trade, started up a company called Generation Investment Management with three former bigwigs from Goldman Sachs Asset Management, David Blood, Mark Ferguson and Peter Harris. Their business? Investing in carbon offsets. There’s also a $500 million Green Growth Fund set up by a Goldmanite to invest in greentech … the list goes on and on.

Based on Gore’s behavior it’s pretty clear that his movie was designed to boost the profits of his company more than anything.  Sick.  Cap and trade/carbon offsetting is BS anyway.

There’s plenty more on Goldman Sachs, from additional analysis of the Rolling Stone’s article to this appalling NYTimes article.  The bottom line is that something is really, really wrong in the US, to put it mildly…and it doesn’t look like anyone is calling for real change.

A video saying the same: