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Nationalizing the Oil Industry?

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By Diana Hsieh from NoodleFood,cross-posted by MetaBlog

Just when you thought American politics couldn't get any worse, Maxine Waters threatens to nationalize the oil industry, if consumer prices aren't to her liking:

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Of course, Maxine Waters wouldn't ever support the genuine cure for high energy prices, namely the elimination of government controls on drilling for and refining oil, as well as on other forms of energy like coal and nuclear power. As any semi-conscious student in a microeconomics class knows, such controls constrict supply and drive up prices. But nevermind that mumbo-jumbo. Maxine Waters has a different kind of plan: oil company executives must find some way to magically violate the basic laws of economics -- or else!

(Via Kelly McNulty on FRODO)297725054

http://ObjectivismOnline.com/archives/003629.html

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Now that Maxine Waters has unfurled the banner of nationalism, it will be interesting to see if anyone picks it up and runs with it. It would not shock me to see some Dennis Kucinich-type propose legislation on the heels of some dubious polls showing 55% support for nationalization of the oil industry. Such a suggestion by a sitting congressman should be tantamount to political suicide, but rather than being a laughing stcok, Ms. Waters will certainly be re-elected and probably run unopposed.

What I wonder is if the congress passed such legislation and it was signed into law by the president, would the Supreme Court strike it down? And if so on what grounds, and with the current make up of the court what the vote would be?

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Strike it down, on the grounds that Congress has no express constitutional authority to run a national industry.

Even the gaping maw of the Commerce Clause couldn't swallow this one. Congress can run the railroads (and did for a while) because they are instrumentalities of interstate commerce; and Congress can regulate all sorts of industries because they affect interstate commerce, but actually running an industry is far and away different from regulation - even very heavy-handed regulation. Even the most liberal of the Justices currently on the Court (Stevens, Ginsburg) would not go along with out-and-out nationalization. An outright nationalization à la Hugo Chavez would be struck down 9-0.

De facto nationalization through heavy-handed regulation with a nominal retention of property rights by the oil companies, however, might well come out differently. It's an entirely different kind of flying altogether.

~Q

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Maxine Walters and her ilk are truly evil. After decades of agreeing with the environmentalists and preventing new and existing energy development,who do they blame for our energy ills? Why, the very people they have prevented from operating freely -- especially the oil industry.

I don't really think it is a case that Walters et al do not understand basic economics, which might be possible given their general ignorance of many things, but rather they want to prevent their betters from living and then wonder why they are not getting more from them as they become more and more enslaved. Since Maxine Walters is black, I would have loved those oil executives to tell her: I am not your slave.

However, it's got to be chilling to any free speech they and others like them might still retain if they are told: Either you comply with our irrationality or your property will be taken away from you by force.

I, like others, would love to hear some mega company executive tell these bastards to go to hell; that they have the right to pursue their self interest, and that earning a profit is moral, and that if you want oil or anything else at a lower price then you must let us operate rationally: Get the hell out of the way!

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Speaking without doing any further research beyond watching the video, I think it is extraordinarily revealing that Maxine Walters hesitated before she said "socializing". I do not think she hesitated because she could not think of the word "nationalization". Instead, I think she hesitated because she knows that there is a negative connotation of the words "socialization" and "nationalization". In fact, I would not actually be surprised if she paradoxically believes that nationalizing an industry is wrong. However, clearly she sees nothing wrong with the actions associated with the concepts denoted by these words.

I think this reflects the thought-action dichotomy exhibited by many of the more socialist-leaning Democrats. They know that nationalizing industries is wrong because they seem to act as if they understand that the words denote bad concepts. However, they evidently see nothing wrong with unhesitatingly and gradually moving towards regulating the entire industry.

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It's an entirely different kind of flying altogether.

Love that movie. :lol:

So my next question is, could this not be considered a matter of interstate commerce since it's affecting trucking, flights, etc? (I seriously don't know, just asking.)

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Strike it down, on the grounds that Congress has no express constitutional authority to run a national industry.

Even the gaping maw of the Commerce Clause couldn't swallow this one. Congress can run the railroads (and did for a while) because they are instrumentalities of interstate commerce; and Congress can regulate all sorts of industries because they affect interstate commerce, but actually running an industry is far and away different from regulation - even very heavy-handed regulation. Even the most liberal of the Justices currently on the Court (Stevens, Ginsburg) would not go along with out-and-out nationalization. An outright nationalization à la Hugo Chavez would be struck down 9-0.

De facto nationalization through heavy-handed regulation with a nominal retention of property rights by the oil companies, however, might well come out differently. It's an entirely different kind of flying altogether.

~Q

I don't know...Can't have interstate commerce without fuel, so if fuel prices are interfering with interstate commerce then it seems proper for the government to regulate it at least. :lol:

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  • 4 weeks later...

They are beginning to jump on that band wagon by giving trial balloons regarding nationalizing the oil industry: http://www.foxnews.com/story/0,2933,369321,00.html

Hinchey said that would allow the federal government to better "control the amount of refined product much more capably" than the oil companies.
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I can see it now. 1974 all over again. Most of you guys were either not around or in diapers when the first major oil crisis hit. Cars were lined up for a mile to get a limited amount of gasoline because of (artificially) limited supplies. Ted Kennedy already had legislation to ration gas in detail, just like during WW2. The only good thing that came of it (for me) was that I started a business selling coffee and buns to motorists waiting line for their gasoline. It is an ill wind that does not blow somebody some good.

If the gasoline system is nationalized, Soviet style queues will become the norm. People will spend a quarter of waking lives in lines and the pols will tell them it is their patriotic duty to car-pool. Heavens to Elizabeth!

ruveyn

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If the government nationalized the oil industry today, would a majority of Americans cheer or protest?

They would protest. The majority of Americans are not as dumb as politicians like to believe they are.

The majority of Americans would also quickly understand that when the likes of Maxine Waters and Hinchey speak of "taking over" and "controlling supply," their intention is NOT to make more gas available at lower prices. Their intention is to raise prices so that only the privileged elites can use automobiles.

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I wish I could agree. From the folks around me, my guess is that they would think it is impractical, because the government can't really run things very well. Most of the people I speak to at work assume that oil prices are high because of greedy middle-easterners and greedy oil-execs. Today, they would also throw speculators into the mix. Along with those false notions, they have also absorbed the notion that the government cannot do things very well. So, they would see nationalization as a good comeuppance for the oil-companies, but one that is not practical, and would make their lives worse. So, on balance, I think they would not go along; but, I think it's a bit of a toss up.

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