I posted over the weekend an exhaustive review of the 2007 Immigration bill. O'Reilly, even yesterday, continued to treat both the McCain and Obama Spanish ads as false. The Obama ad, which I have not discussed in detail, actually includes an implied racist smear against the McCain campaign.
The 2007 Immigration Bill and the McCain Spanish Ad
But let's return to the McCain ad. O'Reilly once again lied that Obama voted for the bill. Get this straight, O'Reilly: there was never a vote on the bill. There's a procedure known as cloture, which allows Senate action on a bill. (Senators reserve a minority right of filibustering a bill. Passing a bill requires a simple majority of 51 votes (including the Vice President as a possible tie-breaking vote)). However, cloture requires 60 votes. There are a variety of reasons to oppose cloture, including a deal-breaking amendment. That's what's referred to as a "poison pill".
Obama, who had been marginally involved in the bipartisan immigration compromise, was expected to protect key concessions made by Democrats. One was an end to chain migration, limiting the automatic granting of green card status only to nuclear (immediate) family members, in favor of a merit-based system, where extended family status would be one of several factors in a point-based system. (There is no doubt many new immigrants, hoping to bring over other extended family members, resist this change.) Another was a Y Visa system which provides an orderly supply of up to 400,000 legal non-immigrants. Finally, there are certain law enforcement aspects for things like worker verification/tracking and touchback (returning to the home country to submit paperwork).
Obama wrote a failed amendment which attempted to strip the merit-based immigration process. Obama supported the ultimately passing Dorgan amendment, a pro-union initiative, that gutted the Y Visa program. The latter killed the bill from a Republican perspective. Reid then resubmitted the bill about 3 weeks later under a so-called clay pigeon process, where a number of amendments were presented with limited debates and votes to table the amendments. Obama joined Baucus in an amendment to basically strip the REAL ID employer verification process, a deal-breaker from the Republican perspective; some conservative Republicans, opposing the Z Visa (amnesty portion of the bill), joined liberal Democrats in refusing to table the amendment, basically ending the clay pigeon, and the ensuing cloture vote failed.
A vote for cloture is NOT a vote for the bill; for example, a Senator may feel that a bill deserves an up-or-down vote even though he or she doesn't intend to vote for the bill. John McCain and other Republican supporters took heavy hits for their support of "amnesty"; Obama took credit for two minor concessions he won in the compromise and then voted for key amendments, popular with his political base, that knocked out concessions to the Republicans. This was not the first time that Obama has not negotiated in good faith with the Republicans (he had pulled out of a bipartisan group headed by McCain dealing with Senate ethics reform a year earlier); in essence he was trying to convert the bill into a partisan one. O'Reilly's inability to see the big picture and call the McCain ad a lie is absurd: the Dorgan and Baucus amendments are public records.
On the other hand, the Obama ad was a deliberate smear. Now the Obama campaign is going to claim it's only fair in the sense that McCain has run campaign ads they claim are guilt by association, e.g., William Ayers. But their ad quotes media conservative Rush Limbaugh saying " . . . stupid and unskilled Mexicans" and "You shut your mouth or you get out!" Rush Limbaugh is absolutely livid, writing in a Wall Street Journal article that the first soundbite was lifted out of context from a discussion mocking anti-NAFTA arguments about losing "stupid and unskilled jobs" to south of the border and the second soundbite was from a parody about the Mexican government's hypocritical attitude regarding their own tolerance of foreign visitors or illegal aliens. I think Rush's sense of humor is an acquired taste, but it's fairly clear from context he was not slurring Hispanics.
However, there's a big difference between associating Obama with Wright, Ayers, and Rezko, with whom he has had direct relationships, versus associating McCain and his "friend" Rush Limbaugh. Rush Limbaugh vehemently objected to the 2007 Immigration Act and fought McCain every step of the way to the nomination. The ad basically accuses McCain of trying to deceive Hispanics, saying whatever it takes to get their votes. This is really patently absurd; McCain represents a border state which has enacted some of the strongest anti-immigrant legislation in the country, signed by a Democratic governor; McCain almost lost his last chance at the Republican nomination because of his positions on Iraq and immigration. When the bill finally burned and crashed over June 26 through 28, there was virtually no vocal support for the immigation bill while anti-immigrant crusaders all but crashed the Capitol switchboard trying to call all 100 senators in opposition. McCain has legitimate grounds on immigration and his strong pro-life stand to ask largely Catholic Hispanics for their votes.
The Oil Speculator Conspiracy
There O'Reilly goes again... There are a variety of factors influencing the price of oil--supply and demand, foreign currency, the global economy, specific economic events (i.e., the American financial services sector collapse), and weather conditions (e.g., hurricanes affecting Gulf of Mexico platforms and Texas and Louisiana refineries, etc.). O'Reilly sees ominous evidence of conspiracies in every oil price spike--but oddly, no conspiracy when the price falls. Well, except he does see the slower drop in gasoline as suspicious (although when gas prices rise more slowly than the price of oil, he sees no problem there).
Bill O'Reilly really doesn't have a conceptual understanding of what's going on. When the Saudi oil ministers said that they are going to take care of their customers and wouldn't agree to cut production, I'm sure Bill O'Reilly didn't pick up on that. Now when the Saudis refuse to cut back on supply, doesn't it mean cheaper price for oil, other factors being equal? Yes. Why would they do that? Why would they want to make less money? You have to look at the big picture--the Saudis know if the price stabilizes at too high of a price, it makes alternative energy more economically viable. This could be bearish on long-term oil prices.
"Supply and demand? Bull!", thunders O'Reilly. Let's think about this. Suppose I'm an American selling a $100 TV, and let's say I'm selling to another country whose currency has just dropped 50% vs. the dollar. From that person's perspective, I'm selling a $200 TV. I'm not speculating or taking advantage of him.
From our standpoint, the dollar has been in a decline against other major currencies, principally the euro, for quite some time, until a rebound in the dollar this past summer. It has had some confounding effect on the costs of the 60% of oil that we import. All other things remaining constant, we should pay more for oil as the dollar weakens, and less as the dollar strengthens.
Despite O'Reilly's state of denial, the law of supply and demand does still hold true. There is no doubt that even if part of the reason for the rise in price is due to a currency effect, that has a critical impact in terms of the prices for refined products, including gasoline. As gasoline grows more expensive, car owners try to cut down unnecessary driving, consider carpooling, engage in park-and-ride, etc., inventory stays in the channel, and there is less demand for new product.
As Americans deal with higher prices for food and energy, they cut back on other forms of spending, including lower demand for foreign goods and services. Many European countries are recessionary, further dampening demand for Asian exports of goods and services. These economies may not be able to absorb drops in demand without layoffs, etc. In total, a slowing global economy softens demand for oil imports, meaning lower prices.
Increasing global economic uncertainty also facilitates any long-awaited bear market recovery for the greenback, which combined with softness in global oil demand, dropped prices from nearly $150 to about $90/barrel. To a certain extent, Hurricane Ike has affected Gulf-related energy production and/or pipelines, and so we have certain supply disruptions and/or temporary price hikes.
But the current spike in oil most likely has to do with the implications of the proposed federal bailout of illiquid mortgages which is expected to cost about $700B, adding to the federal debt--plus the uncertainty of whether the federal bailout will happen and if so, will the situation stabilize? Will we totter into recession? The increased federal debt is bearish on the dollar from a currency standpoint. From an investor perspective, this increases demand for other currencies and hard assets, including commodities such as oil and gold.
Now O'Reilly KNOWS that the mortgage-related bailout is a recent development, but he needs to invent a boogieman like an oil speculator to explain higher oil prices. Ockham's razor!
It's likely we'll see oil give back most of Monday's gain in the sense we don't see an ongoing recovery in economic demand for commodities, beyond being a hedge for the dollar. If we do see an agreement of a bailout plan by the end of the week, this should reduce uncertainty in the market, and we should see further improvements in the dollar and the commodities.
