Solution to the Gas Crisis: Nationalize American Oil Companies

EXXON just made record profits in the first quarter 2008 – $11 Billion, meanwhile we’re laying off teachers and can’t get the pot holes filled

SAN DIEGO — I keep wondering how much Americans are willing to pay for gas. At the “cheap” ARCO here in Ocean Beach, it’s $3.83 a gallon for the cheapest gas. I see $3.89, $3.99 and above $4 everywhere. Just how much are we willing to pay? $5.00? I don’t know. But I do know this: the giant oil companies are raking it in with record profits – and they’ve been doing this over these last few years.

Consider EXXON MOBILE. I wrote a post about how top executives from the five oil giants–including EXXON– testified in front of Congress back in early April that, despite their combined $123 Billion profits for 2007, they should continue to receive their tax breaks. EXXON alone made a record $40.6 Billion profit in 2007.

Now EXXON is announcing record earnings for the first quarter of this year! EXXON, one of the top oil corporations in the country, took in nearly $11 Billion in profits, just this first quarter. It did this with a mind-altering $117 Billion in revenues! That is up 17% from the same quarter last year. So, last year–2007–the company made record profits. Today it’s making the same big record profits! Do the math: $11 Billion x 4 = $44 Billion! [Go here for more details.]

Now think of all the things that need money. Not only those pot holes along Cable Street and every other street, but how about the teachers and other public school workers who have received pink slips. The State of California may have up to a $20 Billion deficit. Think of all your medical bills that wouldn’t be there if we had some kind of universal health care system, like all the other “enlightened” industrialized countries have. Think of all your education and schooling bills, unpaid school loans, things that wouldn’t be there if we had some sort of universal college system, like many other “enlightened” countries.

From pot-holes to fired teachers to medical and school bills, our government and system is in sad shape. The government-the entire system-is out of money. Financial resources are desperately needed just to simply patch up the minimum of what’s expected of government.

It is within this context, that I propose the following:

Nationalize the American oil companies

Take over the native oil companies, hire managers and workers at fair salaries, invest in non-carbon energy resources, and then take those profit revenues from the private pockets and use them for the public good. Use those revenues to pay for the pot-holes, the teachers, the State budget, a health care system–and the many other things we need, like non-polluting energy sources, a plan to deal with global warming, food and housing within our means ….

Nationalize the oil companies. Why not? Other utilities are public. What’s oil? Chopped liver? Oil is a public, national (not to mention international) resource, like water, like electricity, like the mail, like social security, and it deserves to be publicly-owned, or at least, heavily, publicly regulated.

This is not a loopy, far-out, far-left extreme proposition. It is a practical, logical idea. An idea of efficiency. Consider it. Here’s a definition of “nationalization” from Wikipedia:

Nationalization, also spelled nationalisation, is the act of taking an industry or assets into the public ownership of a national government. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities. The opposite of nationalization is usually privatization or de-nationalisation, but may also be municipalization. A renationalization occurs when state-owned assets are privatized and later nationalized again, often when a different political party or faction is in power. A renationalization process may also be called reverse privatization.

The motives for nationalization are political as well as economic. It is a central theme of certain brands of ‘state socialist’ policy that the means of production, distribution and exchange, should be owned by the state. Socialists believe that public ownership enables people to exercise full democratic control over the means whereby they earn their living and provides an effective means of redistributing wealth and income more equitably.

Nationalized industries, charged with operating in the public interest, may be under strong political and social pressures to give much more attention to externalities. They may be obliged to operate some loss making activities where social benefits are clearly greater than social costs – for example, rural, postal and transport services. As an instance, the U.S. Mail is guaranteed its nationalised status by the Constitution. The government has recognized these social obligations and, in some cases, provides subsidies for such non-commercial operations.

Since the nationalised industries are state owned, the government is responsible for meeting any debts incurred by these industries. The nationalized industries do not normally borrow from the domestic market other than for short-term borrowing.

Nationalization may occur with or without compensation to the former owners. If it takes place without compensation it is a case of expropriation. Nationalization is distinguished from property redistribution in that the government retains control of nationalized property. Some nationalizations take place when a government seizes property acquired illegally. For example, the French government seized the car-makers Renault because its owners had collaborated with the Nazi occupiers of France.

The Wikipedia site also has a long list of notable nationalizations by country. Britain-our close ally-has an impressive list.

I know this flies in the face of recent trends of “privatization,” but those have gone too far. It’s our oil, and we should manage it, and we, the people, should profit by it. Again, oil, like water, is a public resource. I’m not an economist, but I can do the math.