Loading ...
Sorry, an error occurred while loading the content.

RE: [LandCafe] Re: 70% of oil price is speculation

Expand Messages
  • Harry Pollard
    John, To repeat, Georgists have always included oil and minerals in their analysis. In fact, while urban rent collection will finance a city s infrastructure -
    Message 1 of 20 , Feb 28, 2013
    • 0 Attachment

      John,

       

      To repeat, Georgists have always included oil and minerals in their analysis. In fact, while urban rent collection will finance a city’s infrastructure – but not much else – oil, gold, minerals seem adequate sources of revenue for state and national treasuries. However, we wouldn’t tax it, but rather own these bounties and lease them to those who want to extract the goodies.

       

      Our philosophical right to the bounties of nature has never been in question. This list is less a Georgist list than an LVT list which perhaps accounts for the endless time spent on exemptions. The Brits have many LVT advocates and among them are Georgists but you don’t have to be a Georgist to appreciate Milton Friedman’s “least-bad tax”.

       

      Harry

       

      From: LandCafe@yahoogroups.com [mailto:LandCafe@yahoogroups.com] On Behalf Of John
      Sent: Wednesday, February 27, 2013 4:49 AM
      To: LandCafe@yahoogroups.com
      Subject: [LandCafe] Re: 70% of oil price is speculation

       

       

      --- In LandCafe@yahoogroups.com, "walto" wrote:

      >
      > --- In LandCafe@yahoogroups.com, "John" wrote:
      > >
      > > Scott Baker hit upon a good point. 70% of oil - which is land as it is a natural resource extracted from land - is because of private speculation. Geonomics would spot this one of course, LVT, Georgism, would not, but how?
      > >
      > > Scott says oil should only sold to those who use it - of course. Oil sits in large tanks and may be bought and sold many times. Oil is also sold in tankers as they sail the open ocean. The oil in the ships may be bought and sold 2 or 3 times on route, which is out of countries' jurisdictions.
      > >
      > > People in Europe are finding it difficult to pay for
      > > the heating bills. It is either eat or heat.
      >
      > I also find it difficult to pay for my heating bills,
      > but I sincerely doubt that requiring me to buy my
      > oil directly from OPEC is a sensible solution.

      By the time the oil get to the retail outlet that sells you the refined oil, speculators (economic freeloaders) have driven up prices to extortionate levels. That is obvious. Geoism will tackle that but Georgism, concentrating wholly on LAND, will not.

      Bank are the biggest oil speculators, keeping tankers outside the limits until the can make a gain and bring them in.

    • Harry Pollard
      Scott, People don t understand rent collection but they do understand taxes. Hence the Single Tax. However, we should understand that collecting rent is not
      Message 2 of 20 , Feb 28, 2013
      • 0 Attachment

        Scott,

         

        People don’t understand “rent collection” but they do understand taxes. Hence the Single Tax. However, we should understand that collecting rent is not a tax. It’s really a charge. You want $100 land – you pay $100. You want $1,000 land, You pay $1,000.

         

        In similar fashion, you don’t heavily tax oil to stop speculation. The oil belongs to us (or should) and what the drillers pay for is the right to extract the oil. (This can be established by bidding.)

         

        Speculators are an important part of the free market and shouldn’t be unjustly criticized. The easiest way to keep oil prices down is to build another refinery or two. However, NIMBY is a problem (Not In My Back Yard). Also, politicians are reluctant to pursue such building. One needs little imagination to guess why.

         

        In California, our gas prices are hovering around $5 a gallon. Our Sacramento idiots even added sales tax to gas! Meantime, our refineries are partly closed down.

         

        Oh, well.

         

        Harry

         

        From: LandCafe@yahoogroups.com [mailto:LandCafe@yahoogroups.com] On Behalf Of Scott on the Spot
        Sent: Wednesday, February 27, 2013 8:09 AM
        To: LandCafe@yahoogroups.com
        Subject: [LandCafe] Re: 70% of oil price is speculation

         

         

        It's not a matter of buying oil from OPEC. It's a matter of
        establishing a system where the price of the undrilled oil - that is,
        oil still in the ground, below the wellhead, if possible - is taxed
        heavily to discourage speculation. And further that anyone who drills,
        processes, ships or sells the oil after that be able to keep the profits
        from the difference between production costs and raw costs, minus the
        taxes for pollution and land use for drilling areas, refineries, gas
        stations etc.
        The volatility - I pointed to the 3/4 drop from the summer of 2008
        ($147/barrel) to the winter of 2008-09 ($35/barrel) is pure market
        manipulation. In the summer, there were tankers held by many of the
        largest financial firms - Morgan Stanley, Goldman Sachs, etc. - parked
        offshore, waiting for price appreciation - then these holdings were
        dumped on the market, simultaneously with the beginning of the meltdown,
        which also resulted in oil traders being forced to cover their margins,
        driving prices down even more.
        This kind of instability distorts buying decisions, causes millions to
        go hungry and even starve (in developing countries, food, which is
        highly dependent on oil availability/pricing, can be 70% of a family's
        budget). It makes it impossible for businesses to make long-term buying
        decisions without engaging in hedging themselves - something that would
        be unnecessary in a Geoist system in which the surplus was taxed and
        passed back to the people (well, we are being hopeful here!).
        A good first step is to demand that those who BUY the oil take
        possession of it.
        The oil market - or, for that matter, the stock market - is often
        compared to an auction market, but it is not that. When I buy a
        painting at an auction, I have to take it home with me. There is no
        market in speculating the price at which the final buyer will purchase
        the artwork will be (maybe I shouldn't bring that up, or some Wall
        Street type will create one!). You buy it, you own it, ought to be how
        all commodities markets work.

        --- In LandCafe@yahoogroups.com, "walto" wrote:
        >
        >
        >
        > --- In LandCafe@yahoogroups.com, "John" burns-john@ wrote:
        > >
        > > Scott Baker hit upon a good point. 70% of oil - which is land as it
        is a natural resource extracted from land - is because of private
        speculation. Geonomics would spot this one of course, LVT, Georgism,
        would not, but how?
        > >
        > > Scott says oil should only sold to those who use it - of course. Oil
        sits in large tanks and may be bought and sold many times. Oil is also
        sold in tankers as they sail the open ocean. The oil in the ships may be
        bought and sold 2 or 3 times on route, which is out of countries'
        jurisdictions.
        > >
        > > People in Europe are finding it difficult to pay for the heating
        bills. It is either eat or heat.
        > >
        >
        >
        > I also find it difficult to pay for my heating bills, but I sincerely
        doubt that requiring me to buy my oil directly from OPEC is a sensible
        solution.
        >
        > W
        >

      Your message has been successfully submitted and would be delivered to recipients shortly.