Passing Gas to the Consumer

by Walter Brasch

Gas prices at the pump during the July 4th extended weekend were the highest they have been in six years. This, of course, has little to do with supply-and-demand economics. It has everything to do with supply-and-gouge profits.

Over the past decade, the five largest oil companies have earned more than $1 trillion in profits. Last year, the Big Five-BP, Chevron, ConocoPhillips, Exxon Mobil, and Shell-earned about $93 billion in profits. Their CEOs last year earned an average of about $20 million. Included within the profits is $2.4 billion in taxpayer subsidies because it’s hard to make a living when your hourly wage, assuming you work every hour of every day, is only $2,283.

“We have been subsidizing oil companies for a century. That’s long enough,” President Obama said more than a year ago. The Senate disagreed. Forty-three Republicans and four Democrats blocked the elimination of subsidies. Although the final vote was 51-47 to end the subsidies, a simple majority was not enough because the Republicans threatened a filibuster that would have required 60 votes to pass the bill. A Think Progress financial analysis revealed that the 47 senators who voted to continue subsidies received almost $23.6 million in career contributions from the oil and gas industry. In contrast, the 51 senators who had voted to repeal the subsidies received only about $5.9 million.

For a couple of decades, the oil industry blamed the Arabs for not pumping enough oil to export to the United States. But when the Arab oil cartel (of which the major U.S. oil companies have limited partnerships) decided to pump more oil, the Americans had to look elsewhere for their excuses. In rapid succession, they blamed Mexico, England, the Bermuda Triangle, polar bears who were lying about climate change so they could get more ice for their diet drinks, and infertile dinosaurs.

This year, the oil companies blamed ISIS, a recently-formed terroristic fringe group composed primarily of Sunni Muslims, who have opposed Shia Muslims for more than 14 centuries. Think of the Protestant-Catholic wars in Ireland. Because ISIS was laying a path of destruction through Iraq, the oil companies found it convenient to declare that oil shipments were threatened, and then raise prices, salivating at their good fortune that terrorists had come to their financial assistance during the Summer holidays.

However, because the oil companies have laid a thick propaganda shield upon the America people to make them believe that fracking the environment and destroying public health, while yielding only temporary job growth, will lead to less dependence upon the Arab nations and lower costs to Americans, the Industry has to come up with some excuses to drill the taxpayers.

Through deft journalistic intrigue and a lifetime of investigative reporting, I was able to obtain insider information from the ultra secret Gas and Oil Unified Greedy Excuse Maker sub-committee (GOUGEM). I have not been able to verify the transcript, but in the developing tradition of 21st century journalism, that doesn’t really matter.

“We have a problem,” declared the GOUGEM Grand Caliph “We have run out of excuses. Last year, we had to find excuses not only for the Summer vacations, but also to justify our surreptitious funding of the Benghazi investigation.”

“There must be a hundred different ways to nail Obama for this year’s increase,” declared the Sunoco representative.

“What if we claim that Obamacare caused gas prices to go up for ambulances,” said a newly-appointed representative from the Hess Corp.

“Tried it last year, but we couldn’t get much traction,” said the Grand Caliph. “Only Fox, Limbaugh, and some guy broadcasting through a tin cup from his room at Bellevue picked it up.”

“Afghanistan!”  shouted the Marathon representative. “We’ve gotten good mileage from blaming the war for the cost of gas.”

“Yeah,” said the Tesoro rep sarcastically, “while we’ve been reaping enough excessive profits to build a water park at every one of our executives’ McMansions. I’m afraid the American people after 13 years have finally caught on to that scam.”

“If not Iraq and Afghanistan,” how about a new war? We invade Switzerland,” the ConocoPhillips rep suggested, “and claim we’re protecting the world from weapons of mass Swiss Army Knives. Every Republican and a few Democrats will back us on that.”

“It only works if there’s oil in Switzerland,” said the Shell rep, “and since we haven’t developed the technology to frack the Matterhorn, we’ll have to find another reason to raise gas prices.”

The BP rep suggested that the oil companies claim gas price increases were necessary because the price of Dawn detergent, used to clean oil-slicked marine mammals, went up.

The Chevron  rep said they could blame the Treasury Department for their underhanded tactics in locating the companies’ tax-free stash in the Caymans.  “How could anyone complain about us needing more income to pay our lawyers?” she declared.

The Valero rep wanted to blame the Veterans Administration. “We say we had to wait so long to get permission to raise gas prices that we had to do it ourselves,” he brightly said, and tagged that suggestion with the explanation that the companies could then claim they were being self-sufficient and not dependent upon the government. “The conservatives will love us,” he righteously declared.

After a few moments of idle chatter, something committees have perfected, the Exxon Mobil rep spoke up. “We don’t need an excuse.”

“You been inhaling too many fumes?” the Shell rep asked.

“Slip on a grease spot in one of your garages?” asked the Murphy Oil rep.

“We’ve always had an excuse,” the Shell rep whined. “Without an excuse, the motorist might not buy our gas.”

“Oh, they’ll buy,” said the Exxon Mobil rep confidently. “We’ve bought out and eliminated most of the alternative fuel sources, public transportation is in the pits, and no one walks. That leaves cars, and they all run on what we decide they run on.”

“So what’s your point?” asked the BP representative.

“It’s as simple as 1-2-3,” the Exxon representative stated. “One. We’re Big Business. Two. We’ve already bought the Republican-controlled Congress. Three. We don’t need to justify anything.”

By unanimous agreement, the gas bag cartel declared there would be a 10-cent a gallon hike by the end of Summer-and no excuse.

[Dr. Brasch’s latest books are the critically-acclaimed Before the First Snow, a journalistic novel; and Fracking Pennsylvania, an in-depth investigation of the health, environmental, economic, and political effects of horizontal fracturing.]

Mission Impossible: Finding a Mini-Van Made in America by Union Workers

by WALTER BRASCH

Last year, not one of the 491,687 new minivans sold in the United States was made in America by unionized workers.

Some were manufactured overseas by companies owned by non-American manufacturers. The Kia Sedona, with 24,047 sales, was built in South Korea, Russia, and the Philippines. The MAZDA5, with 19,155 sales, was built in China, Japan, and Taiwan.

Some minivans from Japanese companies were built in the U.S., but by non-unionized workers. Honda sold 107,068 Odysseys built in Alabama. Toyota Siennas, built in Indiana, went to 111,429 persons. The Nissan Quest, built in Ohio, had 12,199 sales.

Only three minivans were built by unionized workers, but they were made in Canada by members of the Canadian Auto Workers. The Dodge Grand Caravan, with 110,996 sales; Chrysler Town & Country, with 94,320 sales; and the VW Routan, with 12,473 sales, all share the same basic body; most differences are cosmetic. GM and Ford no longer produce minivans.

The United Auto Workers (UAW) suggests that members who wish to buy minivans buy one of the three Chrysler products because much of the parts are manufactured in the United States by UAW members.

All cars, trucks, and vans from GM, Ford, and Chrysler are produced by union workers in the U.S. or Canada. The Japanese-owned Mitsubishi Eclipse, Spyder, and Galant, and the Mazda6 are produced in the U.S. under UAW contracts; neither company makes minivans. All vehicles produced in the U.S. have the first Vehicle Identification Number (VIN) as a 1, 4, or 5; vehicles produced in Canada have a 2 as the first VIN number.

Founded in 1935, the UAW quickly established a reputation for creating the first cost-of-living allowances (COLAs) and employer-paid health care programs. It helped pioneer pensions, supplementary unemployment benefits, and paid vacations.

It has been at the forefront of social and economic justice issues; Walter Reuther, its legendary president between 1946 and his death in 1970, marched side-by-side with Martin Luther King Jr. and Cesar Chavez, and helped assure that the UAW was one of the first unions to allow minorities into membership and to integrate the workforce. Bob King, its current president, a lawyer, was arrested for civil disobedience, carrying on the tradition of the social conscience that has identified the union and its leadership.

The UAW doesn’t mind that corporations make profits; it does care when some of the profit is at the expense of the worker, for without a competent and secure work force, there would be no profit. When the economy failed under the Bush-Cheney administration, and the auto manufacturers were struggling, the UAW recognized it was necessary for the workers to take pay cuts and make other concessions for the companies to survive.

But not all corporations have the social conscience that the UAW and the “Big 3” auto manufacturers developed. For decades, American corporations have learned that to “maximize profits,” “improve the bottom line,” and “give strength to shareholder stakes” they could downsize their workforce and ship manufacturing throughout the world. Our companies have outsourced almost every form of tech support, as well as credit card assistance, to vendors whose employees speak varying degrees of English, but tell us their names are George, Barry, or Miriam. Clothing, toys, and just about anything bought by Americans could be made overseas by children working in abject conditions; their parents might make a few cents more, and in certain countries would be thrilled to earn less than half the U.S. minimum wage.

Americans go along with this because they think they are getting their products cheaper. What they don’t want to see is the working conditions of those who are employed by companies that are sub-contractors to the mega-conglomerates of American enterprise. These would be the same companies whose executives earn seven and eight-figure salaries and benefits, while millions are unemployed.

But, Americans don’t care. After all, we’re getting less expensive products, even if what we buy is cheaply made because overseas managers, encouraged by American corporate executives, lower the quality of materials and demand even more work from their employees.

Walk into almost every department store and Big Box store, and it’s a struggle to find clothes, house supplies, and entertainment media made in America. If you do find American-made products, they are probably produced in “right-to-work” states that think unionized labor is a Communist-conspiracy to destroy the free enterprise system of the right to make obscene profits at the expense of the working class.

We can wave flags and tell everyone how much more patriotic we are than them, but we still can’t buy a minivan made in America by unionized workers-even when the price is lower than that of the non-unionized competition.

Sales figures of minivans are from Edmunds.com. Also assisting was Rosemary Brasch. Walter Brasch’s latest book is the critically-acclaimed novel Before the First Snow, which looks at the mass media, social justice, and the labor movement. The book is available from amazon, local bookstores, andin both hard copy or an ebook.

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Walter M. Brasch, Ph.D.

Latest Book: Before the First Snow: Stories from the Revolution

(www.greeleyandstone.com)

www.walterbrasch.com

www.walterbrasch.blogspot.com

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Sizing Up the August Jobs Picture

A blog post from Mark Price, originally published on Third and State.

Welcome back from your Labor Day Holiday!

While we were releasing the State of Working Pennsylvania 2011 last week, the good people at the U.S. Department of Labor released their latest nationwide data on the August employment picture. Here is a run down of the main points from Washington’s leading labor economists.

Heidi Shierholz notes troubling trends in hours of work:

The length of the average workweek declined in August to 34.2 hours. Average hours have dropped in the last three months, have seen no net growth over the last year, and have thus far made up just over half of what they lost in the first 18 months of the downturn (the low point was 33.7 in June 2009). One thing this underscores is that the lack of hiring right now primarily indicates a lack of demand, and not an inability by businesses to find the right workers or because of uncertainty or concern about regulatory burdens. If the lack of hiring was occurring for some reason other than a lack of demand, we would see businesses strongly ramping up the hours of the workers they have. As it is, there remains substantial room to meet unmet demand by increasing hours of existing workers; if private-sector employers were to simply restore the hours of their workers back to pre-recession levels, that would be equivalent to adding over 1.2 million jobs at current average hours.”

Dean Baker identifies some troubling stats on black employment and unemployment:

A disproportionate share of the increase in employment in the household survey was among blacks, who saw a rise in employment of 155,000. However, this went along with a jump in the African American unemployment rate of 0.8 percentage points to 16.7 percent. The unemployment rate for black men rose by 1.0 percentage point to 18.0 percent and for black teens by 7.3 percentage points to 46.5 percent. The EPOP [employment to population ratio] for black teens was just 13.0 percent, a new low for the downturn.”

Heather Boushey reviews the grim numbers on long-term unemployment:

A particularly ugly labor market trend is that workers who’ve lost their jobs continue to have an exceptionally difficult time returning to  a job. The share of the unemployed who are long-term unemployed remains at near-record highs, with 42.9 percent of the unemployed having been out of work and searching for a job for at least six months. This share has been above 40 percent since December 2009.

Data from the Bureau of Labor statistics on job turnover shows that while layoffs have abated, hiring has yet to ramp up, indicating that there is greater calcification in the job market. If you have a job, you’re in the in-crowd, but if you’re out of work, it’s hard to get back in.”

Although the risk of a recession is greater today than it was a few months ago, the economy does not appear to be in a recession. Private-sector payrolls are continuing to grow, but they are growing at a pace too slow to reduce the unemployment rate.

Although a slow-growing economy is better than a shrinking economy, that’s a distinction without much of a difference since high unemployment means that if you lose your job, it will take you much longer than normal to find another job. Those fortunate to have a job will see their wages and incomes grow more slowly as employers use the weak economy to sweat more work out of each worker while simultaneously demanding concessions on pay and benefits.

This is why in a slow-growing economy following a deep recession, we see corporate profits approaching historic highs and booming CEO pay.