From theory to practice
In most competition law and economics textbooks, OPEC is presented as a prime illustration of the harmful effects of cartellization. Yet, it is also a frustrating example. OPEC's members are governments, over which Article 81 EC cannot apply.
The situation may nonetheless change, in so far as US antitrust law is concerned. As reported below, the US house of representatives Tuesday passed a bill authorizing the federal government to sue OPEC in US courts over alleged price fixing.
WASHINGTON (AFP) — The House of Representatives Tuesday passed a bill authorizing the federal government to sue OPEC in US courts over alleged price fixing, in the latest swipe at the cartel over skyrocketing oil prices.
The bill passed the Democratic-led House by 324 to 84 votes, on a day when the price of oil soared to a record above 129 dollars a barrel.
"The House today with a strong bipartisan and veto-proof margin voted to hold foreign oil cartels and Big Oil accountable," Democratic House speaker Nancy Pelosi said.
President George W. Bush has however threatened to veto the legislation, although its margin of passage in the House suggested Democrats may get a two-thirds majority needed to sustain the largely symbolic measure.
"Instead of using a veto threat to shield cartels and Big Oil companies from accountability, the Bush Administration should work with the Congress to protect American consumers," Pelosi said.
The White House warned that the bill could discourage foreign investment in the US economy, subject US firms abroad to reprisals, and could end up limiting oil supplies, raising prices and threatening US jobs.
The bill would allow the US Justice Department to subject OPEC member nations to the same anti-trust laws as US firms face.
The Organization of Petroleum Exporting Countries (OPEC), which produces 40 percent of the world's oil, comprises Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, Qatar, the United Arab Emirates and Venezuela.
Democratic White House candidate Hillary Clinton has repeatedly threatened to amend anti-trust law to confront OPEC, and promised to tackle the group through the World Trade Organization (WTO), if elected president.
Rethinking our Sanity in the “Let’s Nail OPEC and Deny Global Warming Age."
In opening, I have taken it upon myself to inter-change words to the song “I’m Proud to Be an American Where at Least I know I’m Free” to "The Lunatics Run the Asylum in the U.S.A."
Face it, the belief of G/W has set the stage towards a general economic tail-spin. In sum, most people in the U.S.A believe G/W is real; and as such, all kinds of unpleasant things are occurring such as; out-of-control petrol prices, real estate collapse and a steeply falling dollar.
Think of the economic effects of G/W like riding a horse who suddenly spooks. It does not matter what made the horse you are riding spook; the fact is, when your horse spooks, you are left with only 3 choices;
(1) allow yourself to fall-off (bad choice, like buying a water-front house, motorhome or a new SUV);
(2) hold-on and let the horse run you off to the barn (VERY bad choice, like the antitrust suit against OPEC to stop the high gas prices);
(3) hold-on and try to head towards clear pasture (safe choice, like raising taxes to Eisenhower-era 91% on America's wealthiest folks to fund re-building the transportation infrastructure to include high speed rails, subways, inter-urbans and lanes dedicated to light-electric cars (in sum, a transportation infrastructure tailored to an economy not hopelessly dependant on petrol).
The lunatics are the Article I, II, III riders who sit on their spooked horses galloping back towards the barn where they break their necks the moment their horse suddenly stops at the stall-door.
The lunatics lose site of the fact it is irrelevant whether G/W is really going to occur while assessing G/W’s present, devastating impact on our economy. They also lose site of the fact the price of fuel has risen to the breaking point.
Lunatics want more G/W studies, antitrust suits against OPEC and lower taxes so they can continue to support all the high-maintenance garbage they have been acquiring since post-Reagan tax cuts (mcMansions, motorhomes, motoryachts, face-lifts, tummy-tucks, 300+HP sports cars and SUVs).
And the band of loonies play on . . .
Posted by: David F. Petrano Esq. | May 25, 2008 at 06:56 AM