Massa Press Conference: Gas and Iraq

This weeks' Massa press conference was all about the price of gas, and the relationship between gas prices and the Iraq War. Read on to hear about what will probably be this Fall's most important intertwined issue.

Massa began the press conference by noting that "if gas hits $4.50 a gallon, this country is going to have a hard time moving forward economically." He pointed out that, unlike a lot of other Western countries, we rely mainly on cars for passenger transport, especially in rural areas like most of the 29th.

Massa ties the cost of oil to the war in Iraq via our massive borrowing from China:

We borrowed $3 trillion from China to fund the War in Iraq. We devalued the dollar by 50% to repay at a lower valuation. This is a well-known and recognized economic fact. Combine that with the proportion of the price increase due to obscene profiteering and price gouging, and we have a perfect storm.

Massa repeated his solution to the problem: a gas price freeze combined with a stabilization of the dollar. He added a windfall profit tax for big oil companies.

He used the example of the disconnect between the price of gas and the price of oil to show that big oil companies are profiteering:

The price of oil went to $139/barrel one day, and we saw a corresponding jump at the pump. It went down to $131/barrel and we saw no change at the pump. Clearly, big oil is using [the price of oil] to gouge the consumer.

Massa also framed drilling in ANWR as a business decision: "Why drill a commodity that is worth $139/barrel today, when we know it will be worth many times that in the future?" He pointed to the DOE study that showed the impact of ANWR drilling as 75 cents/barrel in 10 years. He also noted the impact of using ANWR oil on our children:

I am tired of a government that steals from my children. ANWR is the last accessible strategic petroleum deposit in the United States. I will not support a policy of bleed and greed that will ultimately make the lives of my children much, much harder.

Bob Recotta of the Corning Leader, the other writer on the call this morning, asked whether the windfall profit tax would cause a price increase. Massa replied that the price freeze would prevent that.

I asked about the recently mentioned McClatchy article that identified more commodity regulation and releasing strategic reserves as two possible remedies for high gas prices.

Massa supports more oversight of the commodity markets, not only in oil, but in markets like those that led to the mortgage crisis and bailouts of Bear Stearns.

Massa opposes releasing petroleum from the strategic oil reserve, mainly for national security reasons, but also because it won't work:

Even if we drain every drop out of the Louisiana salt domes, it would have no effect on price at the pump. The overriding reason is that we borrowed $3 trilling from the Chinese without asking for mobilization or sacrifice in this country. Now we're having to pay for it. The Bush Administration plan was to get of the office and run before the chickens come home to roost, but they've arrived on a cool summer breeze.

Those, like my opponent, who said our troops would be home at Christmas last year, the year before, and the year before, are responsible for prices at the pump.

Bob Recotta asked if Massa had heard back from Kuhl's campaign staff on his proposal for joint town-hall meetings . Massa said no, and contrasted Kuhl's response to McCain's willingness to engage in that type of open forum. Massa said that he might have debates with a paper cutout of Kuhl if Kuhl refuses to debate.

I asked Massa for more specifics on how he thought we should prop up the dollar. He said it's "like a recipe" because it's a combination of a number of factors. These include a 25 basis point increase in interest rates, a buy-back of foreign bonds by the U.S. Treasury, and tightening of our monetary supply. He said he realizes that the latter is difficult because of the current liquidity crisis, but we need to move forward in that direction.

Finally, I asked about the Bush Administration's effort to push through agreements for bases in Iraq before the election. He noted that this was a "blatant effort to create huge, permanent military bases in a country we have no reason to be in." He noted that some of the bases are the "size of Connecticut", adding "How can anyone doubt that our problems are related to the huge spending in Baghdad?"


"Massa opposes releasing petroleum from the strategic oil reserve, mainly for national security reasons, but also because it won't work"

It is interesting to see that Bush and Massa agree about something.

Massa went for the sound bite solution -- excess profits tax -- balanced by price controls. Both sound good, there is some logic to it and it's unlikely it would become law. Could be a short-term winner.

I don't think that it will be a popular proposal among Republican voters. There's a good chance that he'll be tarred with pushing big-government, socialist ideas, especially if gas prices finally get to be old news -- sometime this fall perhaps.

We should keep in mind the fact that retail gas prices can be bumped in one direction or another by the administration and its friends in October. And with the end of the "driving season" and the beginning of the heating season gas prices will likely level off naturally. Heating oil prices are less of an issue nation-wide, especially in the South and West, but Eric could still use it as an issue up here, knowing that congress and the administration won't care much about it.

ElmerK: Yes, they agree that some gimmicks are bad, and disagree on other gimmicks.

vdomeras: I don't think the socialism tag will stick since the last pres. who did that was Nixon. The Nixonian tag, on the other hand...

I wonder what the admin and friends can really do with gas prices. It looks like we're going to $4.50/gallon -- could they really make a significant dent in that huge number? $4+/gallon gas seems to be a political milestone, sort of the way $1/gallon gas was in the early 70s. It's a wake-up call, a signal that things have changed, and people expect their politicians to react to it with new plans and programs.

True, Nixon was "the last liberal president." His across the board wage and price controls were pretty popular, and actually worked during the 90 days leading up to his landslide re-election. They didn't have any long term effects and his use of them again in '74 had no effect at all.

I don't think that a party that makes hay on Obama's phantom relationship with the Black Panthers would hold back on accusations that a Democratic candidate for the House favors overregulation and big government.

The country has definitely moved to the right since the seventies. Imagine presidential candidate Jimmy Carter hiring a man who favors some privatization of Social Security on his economic team, as Barak has.

By the way, Nixon's hail Mary pass in '72 is an example of how an administration can affect an election. The wage/price controls had a serious psychological impact on the country (which soon wore off). Whether Bush has any interest in affecting the election, much less gas prices, and whether any action on his part would have credibility is another question. But he could, for example, open up the strategic reserve and control allocation of the oil in October, getting the attention of the oil companies and the public. It would be a terrible mistake but would only be a blip on his chart.

Nixon definitely was one of a kind.

If I remember '72 correctly, wasn't his last-minute lie that "peace is at hand" in Vietnam another contributor to his victory? Tom Eagleton helped, too.

I'm reading Nixonland: The Rise of a President and the Fracturing of America, by Rick Perlstein

I'll let you know how it comes out.

Looking back, which times were crazier -- then or now?

I'm reading Nixonland, too.

IMO - times were crazier then, though I was just a kid for his first term, so maybe my memories are a bit off. Opposition to the Vietnam war was more strident. There were riots, protests, groups advocating violent overthrow of the government. It's much calmer now.

It's much calmer now.

So you say. There are many who believe that today's angry bloggers are much worse than the Black Panters, Weathermen, and SLA members of yesteryear.

Things were interesting back then. We had a war that one party couldn’t blame on the other (Kennedy got us in, Johnson escalated it and Nixon continued it). Basically all three presidents thought the war was a good idea.

The far left wing lunatics helped elect a Republican president both then and now – the riots at the Chicago convention pretty much sealed the deal for Nixon and I also feel that folks like Michael Moore helped seal the deal for Bush. These folks never seem to realize that going so far over the edge actually hurts their cause with the mainstream.

The gas crisis was about the same, with doom and gloom people saying we were going to run out of oil in 10 years. While I feel the crisis is worse this time, many older people lost much faith in "experts" saying that we are going to run out of oil. Back then it was like Chicken Little running around saying that the sky is falling. They tried to make it sound like life as we know it was coming to an end, much like Al Gore does today.

The military did their usual fine job, even if it wasn’t popular with many of our citizens. There were wackos in the military back then (the My Lai massacre) and now (Abu Ghraib), but for the most part the military followed civilian orders and prosecuted the war the best they could.

Everything that occurred back then was in the shadow of the cold war and possible total destruction of the planet. That has eased now, but we still have problems with rouge states. Fortunately, they at least don’t have the power to blow up the whole world.

Exile: Yeah, I just blew up a post office in Second Life a few minutes ago, so it's been a busy day.

Elmer: I think Sirhan Sirhan played a major role in the '68 election, if I recall correctly. Gotta keep those wackos straight. The '68 convention riots were probably part of the problem, but HHH lost by .7% (that's point 7 percent). RFK would probably have beat RN.

On the gas crisis, what strikes me as similar is just how damn big and useless the gas guzzlers were around '72. The huge 60's cars were retro-fitted with pollution controls that made them eat up more gas and perform terribly, yet Detroit kept making them bigger even though the hints of the oil crisis were plain to see. I remember a neighbor who had a 72 Lincoln Town Car. That was the biggest piece of wallowing steel I've ever seen.

The huge difference in attitude toward the military is that people have a more realistic view of most soldiers as honorable people doing their duty, and people blame the leaders, not the soldiers, for Iraq.

The military did their usual fine job, even if it wasn’t popular with many of our citizens. There were wackos in the military back then (the My Lai massacre) and now (Abu Ghraib)

Unfortunately, I don't think that Abu Ghraib was the work of whackos, I think it was the work of Donald Rumsfeld and his undelings' crazy ideas about interrogation. That's the real scandal with Abu Ghraib, not that a few soldiers took it way too far, but that the starting point of the whole thing was a misguided, inhumane, and probably criminal set of orders from high command.

Vietnam was fuught by draftees, and most of them from the lower classes in an era of tremendous social and political upheaval. Not only is our present military volunteer and professional, it has also had the benefit of a consensus among the media and the public to "thank them for their service," given that they are doing their job as professionals on our nation's behalf. That our nation's leadership may be on the wrong track is rightly treated as a different issue.