To paraphrase Euripides, those whom the modern-day gods would destroy, they first give too much oil and power.

We have today two stories of oil-fueled despots in alliance. First, Iran's Ahmadinejad's economic illiteracy is coming home to roost:

Ahmadinejad, with his peculiar and literal belief that he has divine backing, was not inhibited by this record of prudence. With a total oil revenue in the first two years of his presidency of $120 billion (£61billion) — more than Ayatollah Ali Akbar Hashemi Rafsanjani had in his eight years as President — the administration still found it necessary to deplete the emergency oil reserve fund set up by Ahmadinejad's presidential predecessor, Mohammed Khatami. According to the Iranian central bank he took $35.3 billion from the fund in his first year and $43 billion in his second year, as a new book, Ahmadinejad, by Kasra Naji, records.

Nor is it easy to work out what Ahmadinejad has spent it on, because he has channelled much of it through religious foundations and to contracts of his own nomination rather than leaving it under the control of ministers and elected parliamentarians. But the predictable result of the spending was inflation, rising from 12 to 19 per cent. Many were put out of work by his sudden decision to raise the minimum wage by nearly half. The climax of this spectacle was the petrol rationing announced so suddenly on June 27, 2007, that motorists could not complete their journeys. For the fourth-largest exporter of oil in the world, that is a humiliation. In the run-up to the March elections to the parliament, the Majlis, there have been signs of a rift between Ahmadinejad and Ayatollah Ali Khamenei, Iran's supreme religious leader. The President's critics, once silenced, are now allowed full voice. MPs say openly that the real jobless figure is near 20, not 10, per cent.

Emphasis mine. Presumably, this is earmarking, Tehran style. In any event, divine will or not, he may be on his way out. Meanwhile, over in the western hemisphere, Hugo is losing his support among the poor, his key constituency, as a result of high crime rates and potholes:

Ninety percent of Venezuelans believe Chavez is doing too little to catch criminals, according to a report by pollster Datanalisis in the El Nacional newspaper this month.

Half the population was a victim of crime between 2006 and 2007, making Venezuela the most crime-ridden nation in the Americas, the Latinobarometro survey group says.

"The government is in a severely tight spot," said Edgardo Lander, a sociologist at the Venezuelan Central University. "It could face an electoral catastrophe if there aren't signs of change by the middle of the year."

The common denominator is the black gold that provides far too much wealth and power to those unfit for it. The dictators may go away, but there's no guarantee that those who replace them will be any better as long as this moral hazard continues to exist. Ideally, nation's oil wealth and revenue would be privatized, perhaps by distributing stock to the citizenry. But that would require a real revolution, which is the last thing that these faux revolutionaries want.

I am in favor of opening ANWR for oil extraction ... I do have to ponder why it is that the gov't gets a slice of the profits, the oil companies get a slice but the American people -- individual people -- do not receive any monetary compensation. Parts of our economy are as socialist as Venezuela, Russia or Iran.

In Alaska, the state citizens DO receive a small share. It would be just and right to extend this concept to all American citizens for all Federal mineral extraction concessions. It would also be very good politics, because the voters would act to jealously maintain their benefit.

I do have to ponder why it is that the gov't gets a slice of the profits, the oil companies get a slice but the American people -- individual people -- do not receive any monetary compensation.

Individual people who choose to buy stock in the oil companies do get "monetary compensation." It's not clear to me why they should get a cut just for being American individuals. That would be socialism. What I'm saying is that the countries like Iran and Venezuela that have essentially state-run oil companies should privatize them.

It's not clear that would do much good. The problem, IMHO, is not massive revenues from oil, it's the concentration of revenues in a single, resource dependent area. Privatizing ameliorates that somewhat, but doesn't solve the underlying problem.

Rand writes:
Individual people who choose to buy stock in the oil companies do get "monetary compensation." It's not clear to me why they should get a cut just for being American individuals. That would be socialism.
I disagree. Giving the resources to a single corporation (and the lucky folks that own it) is antithetical to capitalism. The way I see it, since that land is "owned" by the Federal gov't I should own 1 share out of 300 million shares in the oil wealth contained there.

What I'm saying is that the countries like Iran and Venezuela that have essentially state-run oil companies should privatize them.

I concur.

Giving the resources to a single corporation (and the lucky folks that own it) is antithetical to capitalism.

I don't think that anyone who wants to drill ANWR proposes to "give" the resources to one, or many corporations. Presumably there would be a bid for the drilling rights. The winning bidder(s) would get the rights. What's uncapitalistic about that?

I realize that opening ANWR would increase our supply of oil without relying on foreign oil. But we still can't refine it into products we need. We need new refineries, or expanded refineries and the bunny huggers aren't going to let it happen.

My next vehicle will be diesel. It may be more expensive, but it goes much further per gallon. We are also looking at a retirement place that is super efficient with solar and wind generation. I want access to the grid, but not reliance on it. I don't trust Ahm-a-nut-job, or HugeEgo Chavez or Algore, or any bunny huggers enough to bet my future on them.

The problem really begins with what Perez Alfonso, the founder of OPEC, called the
'devil's excrement'; petroleum. Because it's
development does depend on the usual factors
of industrial development. Perez Alfonso borrowed
his model for OPEC; from his experiences with the Texas Railway Commission; the legacy of Western populism. Under Perez Alfonso and later Yamani, they priced oil out of all usual economic parameters; in '73 and '79, provoking the expansion of what would normally have been a mild contraction; into the 'silent depression'. This had the added effect of entrenching oil dependent oligarchies like the Venezuelans, the Saudis (with
their Ilkwan/Wahhabi retainers; which would form the core of AQ) The subsequent collapse of crude,destabilized regimes both in the Near East and the Americas; with the results we see today.
Eventually, oil prices will collapse again,
striking one crop/commodity economies (Russia,KSA
or the Wahhabi Islamic Republic, which ever comes
first;Venezuela) with the attendantinfrastructure and social dislocation; not before the effects on the West and the developing world have come to pass.

Fred K:
"Giving the resources to a single corporation (and the lucky folks that own it) is antithetical to *capitalism.*" (em. mine)

To that, I can only say, "You keep using that word. I do not think it means what you think it means."

RAND:
I don't think that anyone who wants to drill ANWR proposes to "give" the resources to one, or many corporations. Presumably there would be a bid for the drilling rights. The winning bidder(s) would get the rights. What's uncapitalistic about that?

Probably only one winner - determined by political factors. So, winning bidder, corp "A", gives $X dollars to the Federal gov't. I don't get anything. You don't get anything. Perhaps Ted Stevens builds his bridge to nowhere.


It sounds a lot like Venezuela to me -- the money goes to Hugo.

Starling:

To that, I can only say, "You keep using that word. I do not think it means what you think it means."

Perhaps we should have a longer discussion. Federal mineral extraction contracts seem quite far removed from private property and free contracts between individuals.

Probably only one winner - determined by political factors. So, winning bidder, corp "A", gives $X dollars to the Federal gov't. I don't get anything. You don't get anything.

I'm still scratching my head trying to figure out why you or I should get anything, unless we are stockholders in the company(s) that win the bid.

Norway appears to have a very prudent approach to its oil wealth, although perhaps not one a libertarian would welcome. As I understand it, the kind of kleptocratic consumption or political exploitation happening in these other countries is not happening there.