February 5, 2008 Update to friends Bought America is finally beginning to feel the economic impact of near three digit oil in a way not predicted by many: it is being bought. In recent weeks chunks of major financial institutions like Citigroup, Merrill Lynch and Bear Stearns were bought by a fast growing element in international economic called Sovereign Wealth Funds. These government-owned investment funds primarily controlled by oil rich autocrats are pouring billions into hedge funds, private equity funds, real estate, media conglomerates and other nodes of the West's economy. It is estimated that sovereign wealth funds owned over $7 trillion in assets at the end of 2007 and within one decade they could balloon to $10-15 trillion, equivalent to roughly America's total GDP. Many view the influx of capital as a relief without which a financial meltdown could occur. This may be true. But before we overindulge on these rescue packages we should remember that what begins with an innocent help could end with foreign governments' agents sitting in America's board rooms. The prospect that sovereign wealth funds could use their growing financial heft for political or other non economic motives requires extra vigilance, and, more important, an aggressive effort to stop the bleeding of our economy, starting with a shift from oil to alternative fuels through the implementation of the Set America Free Blueprint for Energy Security. Watch a new clip on our economic predicament here. Bush in Arabia Like many Americans you probably felt humiliated by President Bush's visit to Saudi Arabia where he begged the Saudis to release some oil and provide relief to our declining economy. As Gal Luft pointed out, the President's sweet-talk, his ridiculous appearance in a traditional Arab robe, his hand-holding with the Saudi monarchs, and even his gift of 900 precision-guided bombs, were not enough to soften the Saudis. On the contrary, they were quick to respond with a slap in the face. Within one hour from the President's request, the kingdom's oil minister announced that oil prices would remain tied to market forces and the Saudis would not open the spigot. "The spectacle of American presidents kowtowing to the Saudis is as old as U.S. involvement in the Middle East. Six decades ago FDR had to steal a cigarette in a stairwell of the USS Quincy in order not to smoke in King Abdulaziz's presence. (Winston Churchill, on the other hand, had a smoke and a drink!) With growing dependence on the Saudis, our sovereignty and freedom of action have been steadily eroded. Barring some serious action, no matter who the next president is, he or she will have to ride a lot of camels and wear a lot of robes to keep the oil barrels rolling," Luft wrote. More calls for an Open Fuel Standard If you haven't yet read Robert Zubrin's excellent book Energy Victory here is his oped in the Rocky Mountains news in which he explains how flex fuel vehicles - cars that can run on any combination of gasoline, ethanol, and methanol and cost just $100 extra to manufacture over a gasoline-only car - can stop the bleeding of our economy and the enrichment of our enemies while helping the economies of the developing world. Other voices have joined the call for making flex fuel vehicles a standard feature in new cars, just like seatbelts and airbags: Former Pennsylvania senator Rick Santorum: "What we need is a government mandate! We need to mandate that all cars sold in the United States, starting with the 2010 model year, be "flex-fuel vehicles" - that is, they should be able to run on a blend that is 85 percent ethanol and 15 percent gasoline (the so-called E85 blend), or even a coal-derived methanol/gas mixture. This mandate would cost a fraction of the new fuel economy standard with the added benefit of saving barrels more oil." And Cliff May wrote: "Memo to candidates promising "change": What change would be more significant than to energize the U.S. economy, create new jobs, encourage innovation, provide consumer choice at the pump, clean the air, reduce our dependence on foreign oil, protect national security and provide useful assistance to Africa's poor?" IRS to America's employees: waste oil Here is an example of how the government discourages oil saving and the use of mass transit. If you have household employees and you provide them with transit passes to commute to your home, the IRS allows you to get a tax exemption for use of public transportation to the tune of $115 per month. However the exemption for parking fees which allow employees to drive to your home and park near by is about double -- up to $220 per month. One would think that the government would want to encourage employers and employees to adopt the most energy efficient commute and to incentivize people accordingly, or at the very least equally. Unfortunately this is not the case. This is the link to Employers Tax Guide to Fringe Benefits, IRS Publication 15-B (for 2008).  Israel is getting off oil No other country has stronger incentive to get off oil than Israel. Surrounded by dictatorial Arab regimes and angry Muslim populations calling for its destruction, the Jewish state has assumed what could be a leading role in the fight to end dependence on petro-dictatorships. In partnership with carmakers Renault and Nissan a company called Project Better Place is planning to set up a network for charging and battery-replacement stations and offer electric cars that would go about 100 miles on a single charge. In a small country like Israel where one cannot drive for long without hitting a border or the sea, the electric range offered by current batteries is quite sufficient. The two auto makers, along with Project Better Place announced they would undertake that venture first in Israel and later in other cities and countries around the world. "Oil is the greatest problem of all time - the great polluter and promoter of terror. We should get rid of it," said Israel's President Shimon Peres at the dedication ceremony for the electric car venture. Merger Two Set America Free Coalition members, the Apollo Alliance and Americans for Energy Independence, announced their merger. "We share the belief that a clean energy economy that frees us from dangerous dependence on oil will only be possible if Americans come together to make it happen, and we look forward to working together to usher in a new generations of clean energy technologies and green collar jobs," announced the two groups in a joint press release. No more plastic? Not so fast. Whole Foods Market decided to eliminate disposable plastic bags in its 270 stores in the U.S., Canada, and Britain. Customers will soon have the choice between using a bag made from 100 percent recycled paper for free. But apparently Whole Foods did not do its homework. Its desire to position itself in the forefront of environmental stewardship ignores an important point: It takes 20-40 percent less energy to manufacture plastic grocery bags than paper ones. And, since plastic bags are lightweight and take up so little space, it is much more efficient to transport them. It takes seven trucks to deliver the same number of paper bags as can be carried in one truckload of plastic bags. When it comes to oil saving, we still prefer plastic, though choosing to bring your own bag would be much better. Make it a daily habit Bookmark Notes&Comments, the Set America Free Coalition's blog 
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