[lbo-talk] Re: (didnt we agree to stop talking about) The Transformation Problem

[Daniel Davies]

I don't agree with Doug that it is intrinsically impossible to manipulate the
oil price for political ends.  Enron manipulated the electricity price in
California - mainly for profit but they must have been aware that the blackout
would likely have favourable political consequences.  Since the big catalyst
for the last leg up in oil prices was the BP Proudhon Bay fiasco, you can sort
of see how someone who really wanted to manipulate a US election might be able
to play around a bit with the scheduling of pipeline maintenance and refinery
outages in order to move some of the volatility around in the gasoline price so
that a spike or notch would occur immediately before (or after) an election.

On the other hand, it's a hell of a way to make an omelette, innit?  You would
be messing around with the entire innards of your business, giving up profit
opportunities and potentially exposing yourself to substantial risk of loss. 
You would have to believe a) very firmly in Doug's gas/Bush chart, which while
it is a cool chart is not exactly an iron law of psephology, and b) that Bush's
personal approval rating mapped onto Congressional election results in a
reasonably straightforward way.  When compared to the alternative strategy of
"bribing whoever gets in", which is at least tried and tested, trying to rig an
election via the oil price looks like a loser.  It makes more sense to believe
that Bush has just got (a little bit, 44% approval is still crap) lucky with
the timing of the maintenance schedule at BP.

There is another interesting angle here (I have no idea why I am supplying raw
material to oil conspiracy theorists; the "Euro-denominated oil bourse" crowd
are the bane of my fucking life) although Big Oil doesn't have much of an
interest in driving down the oil price around election times, the Strategic
Petroleum Reserve could be thought to.  Bush did in fact order a halt to SPR
deposits, in April of this year, in an attempt to reduce upward pressure on
gasoline prices (it worked about as well as his many other schemes to ensure
cheap gasoline).

best
dd

		
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