What Industries Should the US Nationalize?

[Patroklos]

The defense industry could stand nationalization. The costs are just too far out of control.

Have you seen the defense sectors of France andt he UK lately. Costs are high because we demand the best of everything and are willing to pay for it. There are very few economy models in the US inventory. That isn't the defense sectors fault, they are just filling a demand.

It would put a stop to "cost-plus contracting". Under cost-plus, if the agreed rate of profit is 6%, then if something costs $10, then the profit is $0.60. But if the cost is $100, then the profit is $6. So it simply makes more sense for the contractor to maximize production costs as a method of maximizing total revenue. Since the rate of profit is fixed, that's their target.

I am curious if you can discover the fault in this critisism by yourself. Something to do with rate of return, and then look up the LCS.

Korea, Japan, and China are closer to ANWR than nearly all of the US.

No, they are not. We pipe the oil to souther Alaska and our West Coast can more than consume that supply and then some. There is more to energy policy than price, the physical location of where your oil comes from is very important national security wise. Who you are paying for your physical supply is also important (how do you think the UAE is playing SimCity RL?).

The idea that we can increase supply and not have an effect on cost is stupid, even if the effect is only to moderate future price increases. As for the time it will take to develope it, energy policy will be just as important in ten years as it is now. It was people like you who kept this that oil stream from starting to mature today.

For instance, a doctor treating a paitent automatically has a conflict of interests if he makes money by prescribing certain medications. This leads to bad, expensive treatments.

It also leads to the development of the drugs and procedures that make modern medicine what it is, which the US pretty much holds a worldwide monopoly on.

The US has greatly capable weapons systems, except we simply cannot afford a full inventory of them any longer. The size of the US military is going to be forced down by our ability to afford equipment.

It certainly will be the case if our military spending contines to fail to keep pace with GDP growth.

 

[LightFang]

If health care counts, I say we should nationalize health care.

Otherwise, I think let's leave it the way it is. The US is not very good at socializing. We like our freedom to have inequality too much.

And in a perfect world, WHO CARES WHERE YOUR BLOODY OIL COMES FROM? The only reason you need to care about it for defense purposes is that the US likes to gallivant around in other parts of the world where other people don't want it, so it's afraid that its supply will be cut off! That may be good and true but it doesn't make any economic sense. Oil is oil is oil is oil, if Gertrude Stein were here.

 

[scy12]

For instance, a doctor treating a paitent automatically has a conflict of interests if he makes money by prescribing certain medications. This leads to bad, expensive treatments.

I was actually referring to only the Energy nationalization that Cheezy wanted to happen. I see now how it looks as i was questioning the opening post.

 

[Mark1031]

The idea that we can increase supply and not have an effect on cost is stupid, even if the effect is only to moderate future price increases

OK you are correct. It's effect on supply will be similar to me going down and pissing in the Pacific. Yes it will increase the liquid content of the ocean but how much?

 

[Riffraff]

I was actually referring to only the Energy nationalization that Cheezy wanted to happen. I see now how it looks as i was questioning the opening post.

Ok no prob, I actually have something intersting about the Energy nationalization, although it might only apply to Germany. Here, the prices for energy are set by a centralized 'european energy exchange' market. Here, the energy producing companies can offer and sell energy - also regulating the price according to supply/demand. As it happens, the German energy market basically consists of 4 large companies which have split up the entire country into 4 territories. Now recently it has been shown, that in times where the energy producing companies where outproducing the current demand, they didn't sell the excess to the 'european energy exchange', but they actually bought energy, thus increasing prices again.

 

[zjl56]

While I have a deep distrust of the federal government, even it couldn't screw up health care more then it is right now. We have a merged private+public health care system where we have to deal with the bureaucracy, but we have the private side resulting in a system that focuses on curing illnesses instead of preventing them. Might as well just pay a little more and get a full system of health coverage.

 

[Theige]

And in a perfect world, WHO CARES WHERE YOUR BLOODY OIL COMES FROM? The only reason you need to care about it for defense purposes is that the US likes to gallivant around in other parts of the world where other people don't want it, so it's afraid that its supply will be cut off! That may be good and true but it doesn't make any economic sense. Oil is oil is oil is oil, if Gertrude Stein were here.

Yea I completely agree.

We just need to let US companies get in on the action, in US land/water, where economically it will have the most benefit for the US.

 

[SharpMango]

Nationalise health care..
you've got a nationalised army (apart from blackwater).
and you've got nationalised schools...
so why not health care? it will save you money too in the long run. American healthcare is so expensive as a percentage of GDP but it delivers worse results than most other developed nations..thats a great injustice.

 

[Patroklos]

OK you are correct. It's effect on supply will be similar to me going down and pissing in the Pacific. Yes it will increase the liquid content of the ocean but how much?

How much does it cost to operate a super tanker between Al Fujarah and Seatle versus Anchorage and Seatle? Since when is 5% of American demand insignificant? Is ANWAR and our shelves the only oil exploration/exploitation projects underway (even in America)?

Oh I see, since we can't solve the problem completely, we should just do nothing to mitigate it at all. Very intelligent.

but we have the private side resulting in a system that focuses on curing illnesses instead of preventing them.

More accurately, we have a citizenry that focuses on curing illnesses instead of preventing them.

 

[Theige]

OK you are correct. It's effect on supply will be similar to me going down and pissing in the Pacific. Yes it will increase the liquid content of the ocean but how much?

ANWR alone would raise US oil production at least 10% by 2018.

Its not a ton, but its something.

Why restrict companies ability to make money during a time when oil prices are sky high, and seem to be headed even higher?

Who knows how much offshore drilling would add, if it could muster another 750,000 barrels per day by 2018, thats a 20% increase in US oil production.

But I'm not advocating just drilling. Taxes should be raised to keep gas at $5 a barrel minimum, nuclear energy should be expanded dramatically, coal plants should have near 0 emissions, wind and solar should be pressed forward even more than they are now.

The future is clean electricity to power electric cars with.

 

[Shylock]

You want the people running the DMV, the Post Office, FEMA, and welfare systems running important industries?

Never mind central control is a bad idea in any case.

 

[Mark1031]

How much does it cost to operate a super tanker between Al Fujarah and Seatle versus Anchorage and Seatle? Since when is 5% of American demand insignificant? Is ANWAR and our shelves the only oil exploration/exploitation projects underway (even in America)?

Do you not freaking realize that if the costs to the companies are less that is NOT passed on to you but realized in PROFIT! Not very intelligent. Do you think the oil produced in Tx suddenly costs 130/bl? You think Exxon is selling it at a lower price because it still only costs $10 to produce? NO they are making record profits. Thats the free market.

 

[Theige]

Do you not freaking realize that if the costs to the companies are less that is NOT passed on to you but realized in PROFIT! Not very intelligent. Do you think the oil produced in Tx suddenly costs 130/bl? You think Exxon is selling it at a lower price because it still only costs $10 to produce? NO they are making record profits. Thats the free market.

In absolute terms, they are making record profits. Their profit margins however are not very large.

And why again is it bad for Exxon to make profits?

Isn't it better than pouring money into the Saudi royal family's pockets? Or our allies in Russia who cut off energy supplies during political disagreements?

 

[Shylock]

Do you not freaking realize that if the costs to the companies are less that is NOT passed on to you but realized in PROFIT! Not very intelligent. Do you think the oil produced in Tx suddenly costs 130/bl? You think Exxon is selling it at a lower price because it still only costs $10 to produce? NO they are making record profits. Thats the free market.

Should I take most of your money because you're making profit and NOT SHARING .

And they are making record profits from increased demand around the world in addition to the higher prices.

Also, the government takes more in taxes than the oil companies make in profit from a gallon of gasoline. Keep in mind the oil company went through the trouble of drilling it, refining it and transporting and storing it whereas the government just demanded it.

 

[Mark1031]

But I'm not advocating just drilling. Taxes should be raised to keep gas at $5 a barrel minimum, nuclear energy should be expanded dramatically, coal plants should have near 0 emissions, wind and solar should be pressed forward even more than they are now.

The future is clean electricity to power electric cars with.

I agree with this esp the gas tax. As I said I don't really care much about more drilling except NIMBY.
But you still fail to realize that it is a global market and there is no such thing as "American" oil. And as all experts have said the drilling will not effect price. Why can't people understand this.

 

[Theige]

I agree with this esp the gas tax. As I said I don't really care much about more drilling except NIMBY.
But you still fail to realize that it is a global market and there is no such thing as "American" oil. And as all experts have said the drilling will not effect price. Why can't people understand this.

It may not effect price directly, but instead of buying oil from overseas, we will produce our own.

That would mean slightly higher profits for American companies, more American jobs, etc.

Obviously it would benefit the American economy.

 

[Zelig]

The total production from ANWR would be between 0.4 and 1.2 percent of total world oil consumption in 2030. Consequently, ANWR oil production is not projected to have a large impact on world oil prices.[10] Furthermore, the Energy Information Administration does not feel ANWR will affect the global price of oil when past behaviors of the oil market are considered. "The opening of ANWR is projected to have its largest oil price reduction impacts as follows: a reduction in low-sulfur, light crude oil prices of $0.41 per barrel (2006 dollars) in 2026 for the low oil resource case, $0.75 per barrel in 2025 for the mean oil resource case, and $1.44 per barrel in 2027 for the high oil resource case, relative to the reference case."[11] "Assuming that world oil markets continue to work as they do today, the Organization of Petroleum Exporting Countries (OPEC) could neutralize any potential price impact of ANWR oil production by reducing its oil exports by an equal amount."[12]

http://en.wikipedia.org/wiki/Arctic_Refuge_drilling_controversy

 

[Patroklos]

Do you not freaking realize that if the costs to the companies are less that is NOT passed on to you but realized in PROFIT! Not very intelligent.

Perhaps you missed it when the oil CEOs made the Democrats in Congress look like idiots last month. It was hilarious. There is a difference between amount of profit and rate of return. Profit percentages have been stable and below or at corporate averages for a long time. You are not being gouged, and yes savings are passed on to you, or are put into capital investments and then passed to you.

Do you think the oil produced in Tx suddenly costs 130/bl? You think Exxon is selling it at a lower price because it still only costs $10 to produce? NO they are making record profits. Thats the free market.

Oil is a global commodity, transport/refining/etc. costs are not.There are many things that go into the price of the gasoline you buy besides the cost of crude. And no, the oil companies are not making record profits, their rate of return is the same. They are making record amount of profit, but that is due solely to the increase in the amount of buisness, not what they are making from that buisness. Pretty much every industry expands, so even if they were charging the same exact price there amount of profit will always increase but the rate of return stays the same.

But you still fail to realize that it is a global market and there is no such thing as "American" oil. And as all experts have said the drilling will not effect price. Why can't people understand this.

They said it won't solve the problem. By definition significant supply affects price. And yes American oil produced in America won't cost less commodity procurement wise, but the thousand other factors that influence the price at the pump will be affected.

 

[History_Buff]

The US imports over half of its oil. Domestically produced oil would almost 100% be sold in the US. And the companies reaping the profits would be almost 100% American.

You see how the price of oil reacts to every little bit of news every day, don't you?

Why do you think news like this would have no effect on the price of oil?

And surely, an increase in production, however small on a global scale, would lower prices. ANWR is estimated to be able to produce 1 mil barrels a day in 10 years. At current consumption that is about 5% of what we use. If we keep the price of oil high, and make it even higher through taxes, people will start to use less, as has been happening. With electric cars, hybrids, the near zero sales of big SUV's. In ten years, we should be consuming less oil than we are now, so that 1 million barrels a day could represent a higher % of our overall consumption than it does now, and would be of even greater benefit.

Oil is a fully substitutable commodity however. A barrel of Light Sweet from the US sells for exactly the same amount as a barrel of light sweet from Venezuela, Iran, Canada, or Russia. So any extra demand has to push world supply down before you see a price fall in the U.S.

 

[Riffraff]

How much does it cost to operate a super tanker between Al Fujarah and Seatle versus Anchorage and Seatle? Since when is 5% of American demand insignificant? Is ANWAR and our shelves the only oil exploration/exploitation projects underway (even in America)?

Oh I see, since we can't solve the problem completely, we should just do nothing to mitigate it at all. Very intelligent.

I'm pretty sure that the cost for sea transport is negligable compared to everything else. Also you shouldn't forget, that the american oil reserves dont have to be put up against US demand but against world demand when determining it's impact.