Tuesday, May 20, 2008

Risks Of Congressional Bill To Sue OPEC

And the scene gets stranger still in Washington as the House Of Representatives pass a bill to sue OPEC. Here is the lead in from Reuters:

“The House of Representatives overwhelmingly approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure.”

The House passed the Bill H.R.6074 by a vote of 324-84. The Senate is looking at a similar bill, S. 2976 – The OPEC Accountability Act. For the House Bill to go to the President, the Senate will have to reconcile the two bills and have the entire Congress approve it. If the President follows through on his threat of a veto, it would be one of the few and rare cognizant moments from him.

The problem with bills like these is that we are trying to lay blame for our own avarice. Americans have over-consumed and wasted limited resources and still continue to do so in face of rising prices and further decrease in global supply. Instead of using Congressional powers to enact bills that would lead to better CONSERVATION and reduction in consumption, Congress is engrossed in blatant finger pointing to other parties as being the ones responsible for the current condition.

This act is similar to the fat people who sued McDonald’s for their weight problem. What is happening to their common sense? Does serving in Washington atrophy their brains? I don’t know but if this bill is any indication of their mental capacity, then there is something definitely wrong.

Here are the risks of the bill

  • U.S. becomes the fodder for more late night jokes; you just can’t make these things up
  • World community will join the late night hosts in mocking the U.S.
  • If the bill becomes law, then expect to see OPEC and other resource-rich nations to retaliate against the U.S., which will drive up prices of limited resources even further upwards
  • If the bill becomes law, then expect to see OPEC members counter suing the U.S., especially Venezuela
  • If the bill becomes law, then expect to see other nations suing the U.S. for squandering limited resources
Here is the roll call summary of the votes for this inane bill (click here for the full list):

Ed Kim
Practical Risk Manager

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