The Hightower Report

Three Wrongs Don't Make Big Oil Right; and Who's Getting Face Time With Your Legislators?

Three Wrongs Don't Make Big Oil Right

Reaping extravagant profits from $4-a-gallon gasoline, Big Oil has been pumping out the company line in an effort to deflect public anger. "We don't set prices at the pump," the executives lecture to us. "The price of gasoline is determined by the cost of crude oil, and that price is set by the free market."

Wrong, wrong, and wrong.

First, the market for crude is hardly "free." Production of crude oil is controlled by an oligarchy, plus the price of crude is being manipulated by high-flying, unregulated speculators. Second, the price of gasoline is not only determined by the cost of the oil, but also by add-on costs attached by the handful of corporations that refine oil into gasoline. Third, these few refiners also constitute a price-setting oligarchy (otherwise known as Big Oil) that rips us off at the pump with $4-a-gallon gasoline.

Note that crude oil prices have fallen lately and consumer demand has also fallen, yet the price we consumers pay for gasoline has remained high. Curious, huh?

This perversion of the law of supply and demand comes courtesy of BP, Exxon Mobil, Shell, Chevron, and ConocoPhillips – the chief oligarchs of Big Oil. To keep our prices high, they simply squeeze back the amount of gasoline produced in their refineries. They are now operating at only 81% of their processing capacity, an artificial manipulation that has cut the supply of gasoline by 900,000 barrels a day from last year's numbers. By squeezing supply, they keep pump prices from falling, thus squeezing more money out of our wallets. With this squeeze play, refinery profits doubled in the last year.

Big Oil could easily process more gasoline, lower our prices at the pump, and still make a big profit. But that's not enough for these masters of greed – they're out to make a killing.

Who's Getting Face Time With Your Legislators?

Do you know Alec? You probably do, even though you've never heard of it.

Yes, "it." Not a person, ALEC is the acronym for a secretive, corporate-funded, state policy front group: American Legislative Exchange Council. ALEC's "exchange" is very straightforward – it takes about $6 million a year from corporate powers in exchange for linking them directly to hundreds of right-wing state legislators. Like a speed-dating service, ALEC convenes two to three dozen private confabs each year, putting corporate executives face-to-face with lawmakers. In these closed-door sessions, the special needs of corporations are matched with eager-to-please legislators who go back home to push the corporate agenda into state law.

If your legislature is suddenly trying to take away workers' bargaining rights, outlaw citizen lawsuits against abusive corporations, privatize public schools, reduce corporate income taxes while raising taxes on retirees, or otherwise advance extremist, special-interest notions that go against the public will and the common good, chances are you have lawmakers who are carrying bills handed to them in one of ALEC's backroom tête-à-têtes.

The organization brags that it has some 2,000 state legislators on its membership rolls and that members introduce about 1,000 ALEC bills each legislative session, passing about 200 of them a year. ALEC's insidious agenda is driven by a "private enterprise board" made up of such giants as AT&T, Exxon Mobil, Koch Industries, Pfizer, and Wal-Mart.

Meanwhile, don't bother asking ALEC for a list of the legislators who play in its corporate bawdy house. That's a secret, it says. But it's only kept secret from you. The corporate powers know all of ALEC's members intimately. Is your own legislator one of them? Ask him or her – and see if they have the integrity to blush.

For more information on Jim Hightower's work – and to subscribe to his award-winning monthly newsletter, The Hightower Lowdown – visit You can hear his radio commentaries on KOOP Radio, 91.7FM, weekdays at 10:58am and 12:58pm.
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