Chinese currency is pegged to the US dollar. This makes it easy to compare GDP without concern for currency fluctuation. Even with the current and marked growth of the Chinese economy, it only represents 23.48% of U.S. GDP (use the IMF GDP ranking by country for 2007). China represents just 4.95% of world GDP (2006 World GDP, per the CIA Fact Book, was 65.61 trillion US dollars) India is only 7.94% of U.S. GDP and 1.68% of world GDP.

A simple application of proportionality is enough to completely debunk the lie we are being fed by the oil companies. The economies of China and India would have had to double, several times over, since the run up in fuel prices began in August 2006, to explain the price of gas increasing from about $1.89 per gallon, to over $4 a gallon in the U.S.. (And oil increasing from under $50 a barrel in mid-2006 to over $140 a barrel today!)

It is also important to note that the growth of the Chinese and Indian economies has been at least partially offset by a significant reduction in the market share of output of Japan, Latin America, and the rest of the world (further illterating the lie we are told about increased demand’s responsibility for energy prices). The graph above visually shows that Japan, Latin America, and “All Other Economies” have given up market share to China, India, and to a lesser degree, the U.S..

So, while overall economic activity is increasing, it only nets to about %5 annual GDP growth world-wide. (This also exposes the myth that the growth in China and India has been at the expense of the U.S., because, as this graph clearly shows, the U.S. also continues to gain “market share”, although at a much more nominal rate.)I am willing to say that if production capacity is static (which it is, albeit an artificial condition), there should be some increase in energy price, but nothing like what is happening. Beyond that, the very people who benefit from this static capacity are the ones who will not increase that capacity, although this is easilly possible.

It is one thing to suspect this, but here is graphic proof that what we are experiencing is destructive and unparalled greed, facilitated by lies and manipulation of the market. This underscores the limitation of capitalisim and market economics to work in the real world, when an industry or individual becomes so powerful, they transcend the forces of the market place, and are able to independently manipulate the playing field.

Monopolies are a cancer to capitalisim and freedom. They have routed the blood supply of our economy and government to feed the tumor they are growing on each of us. Oil and gas are a utility, just like electric and water. They need to be regulated as such, since they are obviously unable to impose any self limitation on their own greed. Electric and water utilities must increase output to meet demand. They do not unfairly reduce supply, or simply produce the same amount of energy at a grossly higher price, thereby circumventing the market. They are quite capable of this, and did so at will historically, until stopped by government intervention and regulation. (Ask California what happens when you deregulate a utility, 400% price increases at the same level of demand! See Enron!)

Regulating big oil as a monopoly (which they effectively are), and as a utility will crush this practice. What we are experiencing from them now is not capitalisim, it is feudalisim.

I know it makes all the Adam Smith fans crazy, but capitalisim cannot function without government to superseed situations like this, where the power of limited individuals is used to crush everything else in their path. When our government is apparently on a pay to play basis, and lobbyists write the laws to gain unfair advantage, it is time for us to use what remains of our constitutional rights to reinstitute balance.

This is the wisdom of democracy and capitalisim and the system of checks and balances instituted by our founding fathers, but just as we were warned in grade school, democracy and capitalisim cannot exist unless there is a highly educated and actively engaged populace, something the power elite has worked to destroy in America for so long.

Now we see why!

Cheers,
Profane