President Obama is opening up certain portions of the coastline for oil drilling. Well and good, but he missed the boat insofar as changing the nature of off shore drilling. The oil located offshore in US waters is owned by the taxpayers of the US. Yet all the profits will go to the oil companies. The US taxpayers are essentially giving the oil away to the oil companies.
Not so in Norway. Every cent of profits from offshore drilling is split 50-50 with the Norwegian taxpayers. The US with its desperate need for new revenues and its humungus national debt, nevertheless, will give all the profits to private corporations. Norway funds its social security program with the profits derived for the people of Norway from offshore drilling. It essentially subcontracts out the process for retrieving the oil to private companies who then are obliged to split the profits with the taxpayers.
But then all resources in the US are under private corporate control so there is nothing that would serve as a source of national wealth. Contrast that with Norway in which the state has a 50% interest in all oil sales. That still leaves 50% for Big Oil. For the US, however, 50% is not enough. The US gives essentially all the profits from oil finds on its property to Big Oil. Other states share the profits among their citizens and private enterprise. The US essentially has a weak central government controlled by lobbyists representing corporate interests. The US government itself, supposedly a democracy, does nothing to accumulate wealth in behalf of its citizens the way other nations do. Even Kazahkstan, the butt of the movie Borat's jokes, has a Sovereign Wealth Fund. Kazahkstan may get the last laugh while the US has to eat crow. Are you ready for Borat, the sequel?
Uncle Sucker, er uh, Sam has a Sovereign Debt Fund while other countries have Sovereign Wealth Funds. The US accumulates debt while other countries accumulate wealth. While the US spends trillions fighting needless wars of aggression, China is eating our lunch by loaning us money and buying up natural resources around the world. Thus China is really winning any future resource wars without firing a shot. China is furthering its own interests by totally peaceful means. China's system is essentially state capitalism, which means that the nation as a whole is in the business of accumulating wealth. Not so in the US where private corporations are in the business of stripping the US government of its wealth. A recent example is the trillions of dollars spent in bailing out US banks, but other examples abound.
Sun Tzu, the Chinese philospher who wrote The Art of War emphasized the Taoist approach of obtaining one's goals without firing a shot if possible. China is well on its way to becoming the 21st century's ascendant nation uses Sun Tzu's principles. China is running its chief rival into debt while the US fights futile wars. At the same time China is tying up valuable world resources by peaceful means not wasting a yuan on ammo. A totally brilliant strategy!
Mark McNeilly writes in Sun Tzu and the Art of Modern Warfare that a modern interpretation of Sun and his importance throughout Chinese history is critical in understanding China's push to becoming a superpower in the 21st century. Modern Chinese scholars explicitly rely on historical strategic lessons and The Art of War in developing their theories, seeing a direct relationship between their modern struggles and those of China in Sun Tzu's time. There is a great perceived value in Sun Tzu's teachings and other traditional Chinese writers, which are used regularly in developing the strategies of the Chinese state and its leaders.
I have blogged previously on this:
Sun Tzu in "The Art of War" said that the best way to overtake your enemies is without even firing a shot. This is happening before our eyes as the Chinese have overtaken the US economically, effectively turning the US into a client state. The role of Europe in providing adequate safety nets for its citizens while not investing heavily in weaponry has had somewhat the same effect ironically. The Europeans do not have the same fear of terrorism evidently that the US does. Why else are they not sending a whole lot of troops to Afghanistan? It's as if they're saying "well, if you (the US) want to waste your money on military adventures, go ahead, but we'd rather spend ours on the welfare of our people."
If the US is foolish enough to continue espousing "free trade" when the result has been massive trade deficits and the export of its manufacturing base to China, then the US has become a sclerotic old man who can't act with any intelligence in his own interests. If the US political system allows one party to say "no" to everything when it is of paramount importance to act now with no time to waste, then the US is only hastening its own decline.
Frank Thomas wrote the following to me in an email:
"I was very disappointed in Obama's message about exploring for fossil fuels offshore [in] Alaska where he apparently didn't adopt some version of Norway's policy that the government (the taxpayers) is the de facto owner of offshore property. Thus, this entitles the central government to be in a 50-50 partnership with oil firms for exploration and development of any finds. Government's equity contribution is the land while the oil firm's equity contribution is the exploration/development cash (equity) investment. Arrangements can be made that the oil firm gets FIRST an agreed 10% annual return on its investment, then the government gets its 10% return on a comparable imputed investment for the land, with any remaining profit/cashflow from the find's production lifecycle shared 50-50 between the partners.
"It's really quite stupid and irresponsible, if not downright cowardly, how we allow the major oil firms to gobble up all the profit and cashflow from exploitation of such scarce, precious natural resources. The oil firms will fight this with some standard arguments, but eventually a firm will enter into such a partnership arrangement, knowing full well how profitable many of the deeper water oil-gas finds can be. I saw firsthand offshore oil-gas joint ownership cooperations working nicely, for example, in Norway, when I was in the offshore construction and contracting business with some big Dutch players in the 70s -- particularly during the North Sea oil-gas discovery boom years. The offshore oil-gas partnership policy Norway started in the early 70s has led to the country's huge sovereign fund from which they are very wealthy just from the annual interest earned on the fund today."
So as the US founders and misses opportunities for reducing its deficit, other countries, notably China and Norway, are not missing any opportunity for increasing their wealth. The notion that the US is a rich nation while China is a poor nation is laughable. We've already debunked that. China is using the Taoist philosophy, the rope-a-dope philosophy of Muhammid Ali, if you will, to accomplish its goals by entirely peaceful means. Actually it should be applauded for that. Meanwhile, the US is stuck in its tracks, not being able to disengage from costly and futile wars, not being able to disengage from its own philosophy of free trade, deregulation and privatization even when that philosophy has been proven to be a failure and not being able to overcome its own sclerotic political system which is dominated by monied interests for the benefit of large corporations. The party of "no" is the party of complete and total capitulation and pre-sell-out to wealth and corporate power and domination. Obama has been able to put his finger in the dike of national regression, but when the Republicans retake power, they will open the floodgates of backwardness and ignorance.
