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Fox Guest Says "In Some Ways Gasoline Is Really Kind Of A Bargain If You Think About It"

Reported by Donna - April 27, 2006

Trace Gallagher filling in for Shepard Smith on Studio B today spoke with Max Schulz, Sr. Fellow at The Manhattan Institute . (Please feel free to read about how 'proud' they were of sponsoring Dick Cheney to speak before them in January) The segment was about the high gas prices and what could be done.

Schulz and Gallaher sat around and tossed Republican talking points on how to deal with the high gasoline prices. You know, drilling in Anwar, off California, off Florida and start building more refineries and suggesting we should get off the poor oil companies backs, they're only making billions -- each quarter! Gallagher even made an attempt at a joke by saying people don't think anything about spending $5 for a bottle of French water yet will scream at gasoline costing $3 a gallon.

Fellow News Hound, Janie, did a report that was somewhat similar on Tuesday. Maybe Fox is trying to string a message here.

The following is my transcript between Trace Gallagher and Max Schulz. They were talking about the Republican proposed $100 cash rebates and reduction in taxes in gas.

Trace Gallagher: Max, you may talk about these tax breaks and and these gas rebates. What do you make of that?

Max Schulz: Tace, it seems to me like a plea of political desperation...uh..it reminds me a lot of when the first President Bush said, "Message, I care" and it showed how woefully out of touch he was. The proposals that the Republicans put down today and the Democrats put out, too, show how out of touch they are with basic suppy and demand, with basic economics. The reason gasoline prices are high is because of suppy and demand. There's great demand in the U.S., China, India and supplies are tight. (overtalk)

TG: Add to that the environmental controls. (Comment: Can't have them, can we?) We're talking about different blends here. Each state has it's own blend. You can't burn the gas in California that you're burning in Ohio and so forth. Nobody wants to build new refineries, no one wants to dig for oil in America. I mean, are those part of the equasion here?

MS: Absolutely, they're a very big part of the equasion. No one wants to build refineries because of the environmental hoops that you have to jump through. It strikes me very funny that those people on the Democratic side that are bashing Republicans over high gas prices are many of the same people who for years have obstructed production from Anwar off the other continental shelf, off California, off Florida. (Comment: Excuse me?) We have a lot of oil in this country that we're not using. It's off limits. There's no reason why that's the case.
(Comment: There are plenty of good environmental and economic reasons for not drilling for oil in these areas, to say there is NO reason is just ridiculous, of course there are reasons, very valid reasons)

TG: I haven't seen politicians scramble like this mix since 1994. Looks to me like nobody wants to be left out in the cold here. We've already taken polls. Americans are very concerned about this. They're outraged about gas prices. (Comment: Ok, which one are they, concerned or outraged, because those are two different things?) And everybody on both sides of the aisle is now thinking they can help this out. Is this posturing or will this legitimately help move the gas prices to come down?

MS: It's a lot of posturing. Look, you can cut the gas tax and that might cut prices a little bit, but that's pandering right there. If you really want to long term deal with this issue we need to increase production. We have, I think, 10 billion of barrels in Anwar. Right now we can't get it. We have millions if not billions of barrels off the coast. We can't get it. If we want to bring prices down we need to drill that oil.

TG: Seems to me that everybody is beating up the oil companies pretty good. (Comment: Yes, so?) You know you hear big oil is bad nowadays and isn't there a school of thought out there Max that says that nobody was handing these people anything back in the 90's when gas prices were low and profits were lean and now everybody's pointing fingers? (Comment: Goodness, I'm holding my side! We're supposed to feel sorry for the oil companies now?)

MS: You're right about that. Back in 1998 the price of a barrel of oil was $10 (Comment: Hmmm, and who was president?) and no one was saying that we need to give them relief. (Comment: Is this guy for real?) Right now oil is trading over $70 and obvious oil is doing very well by it. Exoon Mobil came out today, as you guys mentioned earlier, with a quarterly profit statement of 8 billion dollars which is a lot of money, but that's on 80 billion dollars worth of revenues. So it means that their profit margin is about 10 percent. Which is very much in line with other industries. (Comment: I remember long ago learning in my economics class that grocery stores worked off of a 1 - 2 percent profit - they got their profit from doing bulk sales, isn't that an 'industry'?)

TG: Which is not saying the oil companies are not going to make rent next month cause they are. (Comment: Was that supposed to be funny?) Should the oil companies ratchet things down in fairness to a lot of folks who are suffering across the country?

MS: Well, I don't know. (Comment: He sounds like Snidely Whiplash, I can see him twirling his moustache) They've invested billions of dollars in new research. They were investing billions, what, 10 years ago when prices were low? Those risks paid off. (Comment: I'm sorry, but I'm not aware of the oil companies ever 'suffering') Right now they're making a lot of money. Uh..but they plow a lot of money back into new research in looking for oil. (Comment: Exactly, they want our protected lands) I'm not sure what proposals you're hearing from Congress on taxes (that) would help the situation in any way.

TG: Yeah, I wonder why people won't scream about paying 5 bucks for a bottle of French water but boy, a gallon of gas is 3 bucks and they just scream like crazy, don't they? (Comment: Listen Gallagher, that definitely isn't funny)

MS: Well, on some ways gasoline is really kind of a bargain if you think about it.

TG: Yup.

Comments: This whole segment was a set up, a propoganda piece I believe contrived between Fox and the Manhattan Institute to promote the drilling of Anwar, and off the coasts of California and Florida. Where was the blame? We know that Fox is always good about blaming someone or is that only if the 'someone' is a Democrat? I forgot, they did blame the Democrats for stopping them from drilling in protected places! Where was the balance? I saw none. Not even an attempt at it. Let's see, oil was $10 a barrel when President Clinton was in office and now it's over $70 a barrel with President Bush in office. And the shtick about gasoline being a bargain - puhlease!

As Mr. Bush would say....'You can fool some of the people........................right!

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