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Thursday, August 07, 2008


Straight Talk on Drilling

John McCain famously opposed oil drilling in the Alaskan Wildlife Nature Preserve, one of his not infrequent maverick positions as an otherwise conservative Republican. But now, he is leading the charge for drilling in the shelf areas off the coasts, a no-brainer really, that has suddenly become a strong GOP issue because of the Obama campaign's stubborn opposition in the fact of $4.50 per gallon gasoline. That this is also the unwavering position of Congressional Democrats hasn't yet made its way to the polls for those races, but it will.

So finally, there is a dent in the apparently untouchable dominance of Dems in 2008, as evidenced by McCain already closing the gap with Obama. With oil tumbling to $120 a barrel (we called the top here at $135, a little premature but you get the idea), the question is how low will it go and will gas prices come down fast enough to defuse the issue?

I don't pretend to know, but I don't think oil will make a real stand above $100 per barrel, as demand drops off the table, not only in the U.S.A. but surprisingly, around the world. The laws of supply and demand have not been repealed after all. Even $100 oil will take gasoline only a little below $4 but not enough to level out demand. I think people will continue to limit driving as long as gasoline is above $3 or so. This is bad news for Dems, until they find a way to change their position on drilling.

That they recognize this is evident from the Pelosi/Reid decision to avoid allowing the issue to come to the floor of their respective houses before the recent recess.

So the McCain folks finally have a popular position on an issue important to the electorate, and to leverage their momentum, it's high time to put the straight talk express back on the road, and forthrightly discuss the McCain positions on trade (free trade is good for us and our trading partners), immigration (secure the borders, but don't overly restrict the movement of labor to this country), taxes (keep the Bush tax cuts, pursue a philosophy of low taxes and restraint on government spending), and the environment/growth (pursue reasonable environmental goals but recognize the trade offs with economic growth, making decisions accordingly). All of these positions will be unpopular with someone; maybe the left, maybe the GOP base, whatever. The point is that the favorable McCain image was built on being honest with us and taking positions that reflect conviction and courage. That is the image and behavior that can win this election, and help Republicans avoid complete disaster in the Congress.

Even the many who hate the Iraq war, and did so from the beginning, know that McCain was right on the war strategy and that the surge he recommended effectively won the war. It has made Obama's only international issue irrelevant. Doesn't it seem kind of hilarious to hear Obama call for a surge in Afghanistan? I guess he figures if it worked here, it might work there. The fact is that on international politics, Obama has no clue, and is simply moderating his position to follow events. As he does, he loses credibility and reinforces the GOP message that he is not experienced enough for the job.

If we are not even to the conventions, and Obama has already peaked, the Dems may be looking at another Dukakis scenario (though history rarely repeats). No surprise to Musings readers, but it will be a shock to the media and their friends in the MoveOn.org crowd, and we may see signs of panic next month.


I think the Olympics start tomorrow. Not that we're going to watch, but it's a fact that's good to know in case it comes up in polite conversation.


On Monday, I bought 100 shares of Belden (BDC) a new name that came from my full service broker, who really knows the kind of value orientation I appreciate (low price to book; low or no leverage). The price was 36.97. This was a zero buy that would also qualify as a value buy, just like L did. Yesterday, I bought 1428 shares (72 did not execute) of CardioDynamics (CDIC) at 1.40 on a limit order, a success in this case (a market order would have gone for at least 1.45). I now own one-tenth of 1% of this little company. No 13(d) required yet. Too bad the stock has been such a dog.

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