While many people are cheering the revolts going on throughout the Middle East and shudder at the horrible violence few people are discussing the possible effect that these revolts will have on the world/US Economy.  Should these revolts continue to spike up the cost of oil, the world will be thrown into an economic crisis worse than the recession that began in 2007.

Certainly the crash of the sub-prime housing boom, which was caused by the progressive belief that owning a home was a right, is the primary reason behind the financial crisis and what was to become known as the  “great recession.”  The part that most people forget is that the “pin” that pricked the housing bubble, and led us down the economic abyss was oil prices.  In fact every rescission we have had since the mid-1970s has shown an accompanying spike in oil prices. It is not a coincidence that the worst recession in that period has been accompanied by the largest oil  price spike.

Economist Jeffrey Rubin said in 2008:

Curiously, an over-500% increase in the real price of oil gets virtually ignored as a culprit behind today’s economy, eclipsed by the ongoing crisis in financial markets. Yet the run-up in real oil prices this cycle is over twice the spike in oil prices that occurred during the first or second OPEC oil shock. And those oil shocks produced two of the deepest recessions in the entire post-war period, including the 1980-82 double dip.

The price of oil influences more than just how you heat your house or drive your car.

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From the Associated Press:

The Senate has approved almost $4.6 billion to settle long-standing claims brought by American Indians and black farmers against the government.

The money has been held up for months in the Senate as Democrats and Republicans squabbled over how to pay for it. The two class action lawsuits were filed over a decade ago.

The settlements include almost $1.2 billion for black farmers who say they suffered discrimination at the hands of the Agriculture Department. Also, $3.4 billion would go to Indian landowners who claim they were swindled out of royalties by the Interior Department. The legislation was approved in the Senate by voice vote Friday and sent to the House.

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If you’re the President of the United States or one of his political appointees and you’re ideologically opposed to new oil and natural gas development offshore, what do you do when the public registers its overwhelming support for new drilling in public opinion polls?

You dance, delay, and deceive. You speak melodious words about seeking the wisdom of the public in making these decisions and then ignore evidence of the public will when you get it, or worse, you hide it.

First came the dance.  In August 2008, after soaring gas prices and a dramatic shift in public opinion caused President Bush, Florida Governor Charlie Crist, and Republican presidential candidate John McCain to reverse their positions on offshore drilling, then-Senator Obama also changed. The Democratic presidential nominee reversed his own position and that of his party, saying he was open to offshore drilling as part of an overall energy plan.  The Democratic Congress followed a month later by quietly dropping the 25-year Congressional ban on offshore drilling.

Then came the delay. In January 2009, President Obama inherited a draft five year offshore drilling plan prepared by the outgoing Bush administration.  The plan was already receiving public comment as part of the elaborate rule making process followed by federal agencies.  Ken Salazar, Obama’s new Secretary of Interior, determined the decision about new offshore drilling was so important that he ordered a six-month extension to the comment period.

Third comes the dishonesty.

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The success of the Chicago-style politics of Dick Durbin, Rahm Emmanuel and Barack Obama, characterized by brass knuckles, intense bullying, finger pointing and public attacks has been mesmerizing.  Meanwhile, very  little attention has been focused on the California-style politics of obfuscation and intimidation practiced by Nancy Pelosi and her sidekick, Henry Waxman.  Ignoring California-style politics is a mistake: these guys are good!

The art of obfuscation is central to California-style politics.  Think back on Speaker Pelosi’s byzantine explanation of why she called career CIA employees liars.  Incomprehensible, deliberately vague misdirection characterizes the California-style of politics.  Never be precise; never say what you mean, and certainly, never let facts interfere with the spin.

Cumbersome, incoherent  legislation is another example of obfuscation, California-style: thousands of pages of  gobble-de-gook, the Stimulus, at 1000 pages, the Energy bill at 1100 pages and the Healthcare bill version #1 at 1300 pages and the latest House healthcare bill at a whopping 1990 pages.

Pelosi seems to have assembled these monstrosities so that few in Congress can read the legislation in its entirety before she calls the vote.   Deceptive executive summaries, with left wing talking points, attached to these gargantuan documents are yet another form of obfuscation.

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