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WASHINGTON (Map, News) - There are more misunderstandings about the oil market than perhaps any other. Everyone is blaming the current round of inflation on high oil prices. Wrong.
High oil prices can indeed force consumers to spend more on gasoline at the expense of other purchases. But they can’t trigger a rise in the general price level — inflation — unless someone pumps money into the economy so that, to use an oldie but goodie from the economists’ lexicon, there is more money chasing the same amount of goods.
If you want something to blame for inflation, don’t look at oil prices, look at the billions the Federal Reserve Board’s monetary policy gurus and their confederates at the U.S. Treasury are pouring into the economic system.
The cost of saving the financial system is the run-up in inflation, never mind any losses you take as taxpayers if some of the collateral the Fed is accepting from the banks proves not to be worth the paper the signatures are written on.
Another myth: We are running out of oil. According to WorldPublicOpinion.org, “majorities in 15 of the 16 nations surveyed around the world think that oil is running out. ... Only 22 percent on average believe that ‘enough oil will be found so that it can remain a primary source of energy for the foreseeable future.’ ” Those majorities include 76 percent of the Americans polled. Luckily, they are wrong.
Production of oil is being constrained by several forces, none of them due to God’s failure to put enough of the black gold under our feet. Several countries that are important sources of supply are in political turmoil.
Think Nigeria, where security problems have shut down about 20 percent of the nation’s 2.5 million barrels of capacity, and Iraq, where political paralysis and terrorists have kept production at less than half of its potential and prevented new exploration.
Nigeria and Iraq are not the only places where politics stifles oil output. Foreigners who invest in Russia’s oil industry might be playing a game with Vladimir Putin known as heads I win, tails you lose.
Find nothing and you lose your money; find substantial reserves and the state squeezes you until your shareholders’ pips squeak. Little surprise that oil output dropped in the first quarter of this year.
Mexico’s President Felipe Calderon wants to revive Petroleos de Mexico (Pemex), the world’s third-largest oil producer, by contracting with foreign companies to introduce modern methods of extracting more from existing fields and finding new ones. But legislation is stalled by left-wingers who have seized and are sleeping at podiums in both houses of the Mexican Congress.
Saudi Arabia’s royal family has announced it will not expand capacity. The oil is there, but with current production yielding about $120 per barrel, there is no incentive to find more, especially since new production might drive down prices as demand for oil from the slowing American economy drops.
In Venezuela, President Hugo Chavez’s cronies are inadequate substitutes for the technicians they have replaced, so production is falling, while foreign investors are reluctant to trust hundreds of millions in exploration dollars to a regime that treats contracts as the first step in a negotiation.
In America, Congress alternates between calls for “energy independence” and refusals to allow drilling in what it considers environmentally sensitive areas in Alaska and offshore California and Florida.
There’s more, but you get the idea. There is a lot of oil out there to be found and produced. We might have reached the age of peak panic about oil supplies, but not of peak oil.
One thing we think we know about the oil business is correct. High oil prices and the greenhouse gasses produced by using oil have important geopolitical consequences.
These $100-plus prices have led to a massive flow of wealth, and hence power, from consuming to producing countries. If oil were still priced at $20 or even $40 per barrel, Russia would not have the wherewithal to revert to its bullying foreign policy, and America’s banks would not be going hats in hand to Arab capitals in search of new capital.
And if oil did not produce so-called greenhouse gasses when propelling cars and heating homes, there would be no massive subsidies for ethanol production, acreage would not be diverted from growing food to growing fuel, and the current run-up in food prices would be less steep.
So oil indeed matters. But not in the ways we most often think.
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Maddie said:
Im in First Lego leage and the research is on climate control! Thanks Paul Chesser
4 agree | 4 disagree
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Examiner Reader said:
YES:they should have an opinion also.
5 agree | 5 disagree
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Examiner Reader said:
If you agree to 'filter' who can vote and who can't, I say filter better: dont let felons vote, but also any other unqualified citizen due to theire incompetency in making a clear voting decision: any moron with an IQ lower than 120; the undeducated (higer degree or more required) ; the unemployed (you're not contributing to the economical advancement of this contry, you shoudn't have a say), any smoker, drinker or obese to fat (hey, you cant make healthy decisions for yourself, don't bother trying to decide this contries futur)...this list is endless, and in the end, any criteria can be 'logically justified' and I bet a lot of you dont mind until you're the one deemed as incompetent to vote. if basic human rights like the one to vote are not guaranteed for all, we fall back on totalitarism: sacrifice the small for the greater good. Not only was that the communist motto but Hitler was a strong believer too, well most dictators.
4 agree | 4 disagree
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Examiner Reader said:
The Question should read; "What does being President have to do with belief in common ancestry". The term evolution is ambiguous. (not certain of any specific interpretation.)
7 agree | 5 disagree
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StewDaPew said:
Allowing ideology and/or theology to dictate what is scientifically accurate or correct is fascism. Please stop demanding that others must share in your faith. One man's faith is anothers fiction. If you want to teach your children mythical yet comforting stories please do so in a private setting.
5 agree | 9 disagree
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StewDaPew said:
Allowing ideology and/or theology to dictate what is scientifically accurate or correct is fascism. Please stop demanding that others must share in your faith. One man's faith is anothers fiction. If you want to teach your children mythical yet comforting stories please do so in a private setting.
4 agree | 7 disagree
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Islam = Fascism said:
This kind of garbage flourishes in a culturer where our own Federal Government, despite being involved in the Global War on (dont say Islamic) Terror, goes out of their way to court the worst leaders aad countries in the Muslim world, like Saudi Arabia, Sudan, Pakistan, and mouths lying platitudes about Islam being a religion of peace.
9 agree | 9 disagree
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bxtf opdiwrke said:
vxwre qcmswo xzts yfvcd iwjzdtbpf qziraosy tgmbhu
10 agree | 11 disagree
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no no los illegals said:
You should see Huntington Ave. in Alexandria (Fairfax Co.) - it's like a landfill was spread down the length of the street... What, they don't have trash cans in El Salvador (they certainly don't have recycling bins.. heh)?
11 agree | 9 disagree
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Examiner Reader said:
i always hang up on calls made by indi people, cant understand a word they say.
12 agree | 11 disagree
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Lifeofthemind said:
Mary Katherine, Please comment on the current conditions at TownHall. Since you departed have been reading a string of reports of anti-Semitic activty. This is most distressing. Perhaps you could help encourage them to clean their house. If quiet diplomacy does not work then you may feel a public statement is in order.
15 agree | 12 disagree
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Examiner Reader said:
Folks I am going to ask a big favor of you..a friend of mine who has moved to the island of kythera,Greece is in the throes of will they or wont they get wind power on the island,,problems aplenty..could you send this article to him to help him in his quest. Here is e-mail address;james@kythera-family.net Thank you if you can...Geocoroneos@netzero.net
15 agree | 14 disagree
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Examiner Reader said:
I've watched Picken's closely, he seems legitimate. As people have already mentioned he stands to profit from this venture. He requires our government to build and infrastructure that would allow for the energy produced by his wind farms to be sent to areas outside the heartland. The natural gas based cars are for fleets of cars not for the average citizen (I'm waiting for the volt). Most of you find yourselves in a bit of a pickle, you want cleaner renewable energies but you don't like big business. I loathe big government, as should any one who loves freedom and knows history. Big business needs to be regulated, we should see to that. We should not stifle new green energies because we don't trust big business; we should regulate big business because we don't trust them, let their greed power our homes and chevy volts, and let them compete with other greedy American business. I'd rather pay greedy Americans than transport 700 billion of our dollars to other countries.
15 agree | 16 disagree
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Examiner Reader said:
If he didn't own them you would be calling him a hypocrite.
15 agree | 12 disagree
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Examiner Reader said:
This article is flawed on so many levels, but I'll just touch on one here. People who have committed felonies and served their time deserve, on release, all of their rights back. The entire point of our prison system is to rehabilitate, yet when someone gets released we disenfranchise them and the system by saying that we don't trust them with a basic responsibility, like voting. It's hypocritical to say that a man being released from his debt to society is "free" when he can't do simple things like find a good job or live in "this" neighborhood or talk to "that" person. And it's made ten times worse when we deny them the most important right we have as Americans, and that's the right to better our situation and government by VOTING. You're effectively saying that an ex-con doesn't deserve any more rights than those he had while in prison except for a better view.
15 agree | 16 disagree
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TurkeyRidge said:
Chicoms probably got idea from AmLibs who did the same to our American cities in the 1960's. It was called Urban Renewal. Only difference is speed.
14 agree | 13 disagree
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Examiner Reader said:
When you all make billions are start handing out hundreds of millions of dollars at a time to push what you think is a good agenda and get mocked -- then you can start all this hullabaloo nonsense spouting off about corporate and political conspiracy to take everything you have. Since when have you green promoting, hippie land, liberal socialists promoted such green ideas as wind and solar, and then immediately criticize people for directly spending billions to follow your goals. Of course he wants the venture to not be in the red but to be an evergrowing business venture. That's what people with minds and degrees do. Stop sitting in your hippie coffee shop drinking a Chai Tea Latte out of styrofoam and petroleum-made plastic criticizing people at least making a real dent in the carbon footprint when you can't even stop using $.03 worth of stuff out of selfish and lazy reasons. I really will never check this post ever again but wanted to take this chance to let you all have it.
22 agree | 17 disagree
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Examiner Reader said:
Communicating visually via print excludes the sound of the Greek chorus quietly humming in the background, "Drilldrilldrilldrill....."
16 agree | 18 disagree
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Phil said:
Pickens is a very devious & cunning scam artist. He has a long history of corporate raiding of Oil companies. He uses stealthy dealing and unethical business practice to acquire wealth. He destroyed Phillips Oil company, Gulf Oil... etc. He has caused a lot of unemployment. Pickens donated 165 million to golf program at Oklahoma State, got the Katrina deduction , paid no tax, then had the 165 mil invested in his own hedge fund. The California Proposition 10 is another scam venture that benefits his Natural Gas company in with taxpayer subsidies. His son was given probation for a stock fraud scheme in Dec. of 2007. Pickens paid $300000 to the victims of his son's fraud. How that for Family values? It is really difficult to tally all the ruin this guy has done... Is this guy to be trusted with any plan? His
23 agree | 23 disagree
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Frank said:
Google "Pickens & water & eminent domain" and you'll get the actual story. Pickens is betting that water will soon be the new oil. He wants to sell the water to big cities in Texas. He's bought a bunch of land in the Texas panhandle. The land sits over the Oglallah reservoir, a reservoir relied upon by midwest farmers, a reservoir formed by ice-age melt so that it does not replenish quickly. He's formed a water district and is using eminent domain to take people's land to run his water. But so far he's still blocked. Pickens wants the wind farm and the power lines so he can run water alongside it. He's trying to use the warm fuzzies of being green to get his right of way so that he can suck the Oglalla dry, make billions of dollars, ruin the livliehood of many many farmers, and destroy much of America's agriculture. You'd think any journalist worth his salt would mention this, no?
25 agree | 21 disagree
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Examiner Reader Winslow Boynton said:
For myself the article didn't have serious content. The technologies for the top power pods is not advanced enough. The ones I saw on TV used DC generators with conversion to AC. That requires brushes and commutators which were long ago removed from cars. More brainpower must be used to have AC generators and drive trains to accomodate the normal power grid. Also- the ones on TV required weekly maintenance, thats too expensive. winslowgb@verizon.net WINSLOW BOYNTON 134 Becker Ave Northampton Pa. 18067
19 agree | 19 disagree
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Examiner Reader said:
I think Carney raises some good points. Part of his plan involves continued reliance on expensive natural gas for transportation, when we could be switching to electric cars instead. Why should I buy a natural gas powered car, if I can charge my electric car hooked up to a few solar panels on top of my garage? Why should the taxpayers finance a national wind energy grid, when local solar/wind hybrid systems could directly generate enough for power for most of our needs? Seems like a national energy grid serves to keep the control of the majority of power generation in the hands of the largest utilities, or investor groups, at the expense of locally generated power systems which could be municipally owned and focused on public service, good paying jobs and not primarily aimed at profits for stockholders. I'd prefer to see the two parties disengage from their Imperial ambitions, (i.e. stop their damned wars, and start investing in locally based decentralized public power generation. IMHO
24 agree | 21 disagree
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Examiner Reader said:
good article,but the real point is left out.its all about our carbon footprint.saving this planet if you will.giving a tax break to pickens is ok by me.he does mention saving the planet from time to time.i have never ever heard a texas oil millionaire say crap about the planet.aren't those southern christians supposed to be stewards of the planet according to thier book,which obviously they never read.
22 agree | 22 disagree
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Examiner Reader said:
This opinion piece illuminates nothing. Pickens has been open in discussing his financial interest in wind energy development and has invested heavily in it. Also, don't overlook the fact that he's 80 and doesn't need any more money. (I'm trying to get past the Swift Boat scum.) That said, T. Boone Pickens plan is spot on. It was surreal to see him on Larry King with Ed Begley, Jr. agreeing with each other. I hope there are government subsidies and tax incentives. I hope Wall Street begins to pay attention and that there will be a lot of job creation with the introduction of wind and solar power. If we don't get behind this technology now, we'll be buying it from the EU. Finally, this isn't a Pickens vs. Al Gore thing. Pickens is a business man and Al Gore is a public servant turned messenger. They're both visionary and they're both right. It's time this country stopped being scared of everything and grew a pair. Ask your grandparents how good it felt to be self sufficient
22 agree | 25 disagree
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Wa Ho said:
It is not the "Wind Machines" that we should be worried about, they will at least provide a long-term clean energy benefit, whatever the intial cost. What is more horrifying is Pickens' plan to pump out the Ogallala Aquifer and pipe it to Dallas and others. The Ogallala Aquifer provides water for up to 60% of US produce and Pickens is planning to drain it for his own profit under the subtrefuge of public good. No water in the Aquifer means no water for food growth. You think $4.00 gas is bad, how about $15 bread...
22 agree | 19 disagree
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Examiner Reader said:
T. Boone Pickens is a traitor who paid millions to the Swift Boat Veterans for "Truth", then denied paying the reward to Kerry's swift boat mates (they designated the earnings to a charity group that serves injured vets) who answered his "$1 Million Challenge" and proved SBV"T"'s lies were wrong.
19 agree | 23 disagree
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Examiner Reader said:
OK, then. Let us burn more coal. After all, birds thrive on coal burning power plants! And God forbid this rich man become richer. What I'm really trying to understand is if this means Carney hates solar energy, too. PV cells take lots of energy to manufacture, and -- gasp -- rich manufacturers and installers get richer because of -- gulp -- subsidies. Why doesn't Carney mention solar in his essay? California's solar power would be a minute fraction of what it is without subsidies paid, by taxpayers. Perhaps there's no target to aim at when ripping solar power. One thing I don't see in the essay is a solution. Carney tells us what's wrong with wind power, hydro power and hybrid cars, but he offers no solution(s).
22 agree | 23 disagree
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Ivan Fail said:
Unless and until majority electorate Consumers and the business community join hands ---, seize and impose majority electorate administration and full disclosure control over all phases of all 50 state attorney "discipline" bureaucracies --, we will continue to be ripped off, fleeced, bullied, exploited and enslaved by the lawyers. Currently the attorney "discipline" process is owned, administered, operated and controlled by the lawyers. That is a "fox guarding the chicken house" process. Continuing to try to use the lawyer owned, operated and controlled Congress and the lawyer owned, operated and controlled Courts to "shovel the rotten apples out of the legal profession" has to be one of the most stupid, impotent, tunnel visioned and "doomed to failure" missions in history. Effective clean up and accountability HAS to take place at the state attorney discipline level first! If we fail to do that the lawyers will write the "obituary" of our freedom in fine print legalese.
15 agree | 13 disagree
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5th Estate said:
Gore was mocked and dismissed, but Pickens' newly-minted opinion is promoted by the business press because only businessmen can be respected (Riiight). The biz-press is functioning as a PR firm as it often does (e.g/ Enron, Health Savings Accounts, big companies deserve bailouts whilst individuals deserve debtors prison, and so on). Changing the energy infrastructure WILL require taxpayer contributions,the question is who gets the best return? As wind, sun and water are public resources it should be communities who benefit first and foremost--otherwise it will be business as usual where private corporations control and charge the public for public resources which the public has already subsidized whilst the majority of profits go to the largest shareholders who then avoid the income taxes that would otherwise constitute the re-payment of the tax-payer loan. The energy business may be new but the business model is old.
19 agree | 20 disagree
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Robin said:
Wind turbines don't displace any CO2, are extremely inefficient, are a developers dream come true as far as subsidies and double depreciation go and are taking money and time away from finding good solutions to clean up energy generation. Thank you for a thoughtful article.
21 agree | 18 disagree
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Barry W said:
Whoever said the rich weren't going to make a profit? Nobody. The issue is about dependence on foreign oil...foreign intrigues...foreign anything. Why can't we be independent? Because you've been sold on the interdependence of the world markets. In other words we have to be a part of the global market. Crud on that. At least Pickens is doing something...risking something...taking a risk nobody else in the country seems to want to take....and with his own money. Sure, he'd like subsidies...they existed once before...but how in the heck are we going to build the hundreds of thousands of megawatts of wind energy capability without investment...without risk? They aren't going to magically appear. And do you really want nuclear? Really? The wind and sun can provide all we need today...with today's solar energy...not the energy from millions of years ago. Today's solar power today. Pickens is a hero...rich or poor...don't be jealous...applaud.
16 agree | 17 disagree
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Examiner Reader said:
Two quick things to consider. 1) Boone Pickens conveniently also owns all that natural gas that you read about in "[h]e would shift natural gas from electricity generation to transportation, replacing a third of our gasoline consumption with natural-gas-powered cars." 2) Boone Pickens owns massive (extremely lucrative) water rights in a giant Northern Texas aquifer, and sadly (for Boone Pickens), water districts don't have eminent domain. However, now that the electric transmission line routes have luckily been approved by Texas, using eminent domain, they are willing to run water pipes along the same route and install them at the same time. Isn't that neat? Regardless, wind power (and solar and cellulose biofuels) are the future and I'd rather subsidize that than oil any day - and don't think for a second that we don't subsidize oil far beyond providing "security" in war zones.
15 agree | 17 disagree
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Examiner Reader said:
While I would have no remorse if T Boone Pickens fell off the face of the Earth tomorrow, your pathetic attempt to discredit wind power just because Pickens will profit from it is...well..pathetic. The stupid bird argument has been disproved by tons and tons of research, and whatever source you're sighting in this article is clearly opinion based. People like you would rather polute the landscape with oil wells than wind turbines, so don't try to argue that its an eye sore either. One thing is for sure; Pickens will profit no matter what we do, so don't try hide your contempt for wind beneath this strawman argument that the swiftboater is taking advantage of us.
21 agree | 22 disagree
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Examiner Reader said:
Please continue to inform the public about judicial and political corruption. The corruption is very bad in the small town where I live, in Florida and from hearing the national news it is bad everywhere in this nation. This must be exposed and stopped!
15 agree | 14 disagree
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Examiner Reader said:
I'm not quite sure who Ms. Scarborough thinks the ADA should protect from discrimination if not a woman who has had breast cancer, a mastectomy, and her ovaries removed. I think she missed the bottom line here: The Foreign Service denied a top candidate a job because she had a history of breast cancer. There was nothing about the job she could not do, but the Foreign Service reacted irrationally because of their fear of cancer. Ms. Scarborough got one thing right -- the law is written badly. It needs to be fixed so that it protects people like Kathy Adams from discrimination without the hurdle of proving that she is disabled in a "major life activity." The fact that she had breast cancer and the Foreign Service discriminated against her because of it, should be enough for protection. You can hardly fault Ms. Adams or her lawyers for coming up with a creative argument to satisfy a badly written law.
21 agree | 15 disagree
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Examiner Reader said:
Gurdon does a really fantastic job of ignoring all the good that the Olympics has done for China... and yes, it has brought some good there. Not universal, but definitely positive developments. The Nazi comparison is really getting old. I remain hopeful - with my limited experience of only having spent time in China - that the better comparison is Seoul 1988. Anyone who thinks there's no dissent in China or that all protest it met with guns and prison doesn't know a damn thing about the place.
16 agree | 14 disagree
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For Rupert's Lady Mary Katharine said:
Fix News "analyst" Ms. Ham has hammed it up again. Polls show that most Edwards voters would have voted for Obama, not Hilary, although I understand the right's sadness at not being able to beat up the more-easily-targetable Clintons for one more election cycle.
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Barely About Barack said:
Iseman? Right, McCain's supposed sexual downfall. Of course, McCain pushed back, which is why Ryan's capitulation seemed so odd.
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Examiner Reader said:
Ham implies Barack would be nowhere with without sex scandals. I have two words for her about Barack's next success... Vicki Iseman
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Barely About Barack said:
In fairness, Ham's revision of the Jack Ryan withdrawl was interesting to read. One question still came up: Why did he resign from the Illinois Senate Race? If the "scandal" was a non-issue, why didn't he push back instead of just quitting? I'm also not sure how culpable Obama is for the actions of the Democratic Senatorial Camapign Committee. Sounds more like insinuation.
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Examiner Reader said:
If the prism through which one views another country is fear, one will always see the worst in that country. Not every facet of China reveals a rotting core.
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Examiner Reader said:
Somebody is playing the "RACE CARD" against Honest, hardworking American that commit no felonies; They obey laws, the ones that commit crimes should not be given the right to vote. If Obama is out loading up with felons to get their vote-this will open an avenue for dishonest candidates to pander to them and give gadzillions of dollars of benefits. They (felons) have forsaken their rights when they chose to be felons and depend on felonious judges to go easy on crimals.
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Examiner Reader said:
Thank you very much dear John for your courage!! I once believed the lies that islam is about peace, And I embraced it, Only to find,Islam was never about peace
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To Sam Wright (Essex, MD) said:
You asked, "If the ocean is rising and Maryland shores are threatened, why does Back River still dry up?" Assuming no dams are involved, it may just be an unusually dry spell in the river's area. Rising oceans may increase the likelihood of flooding along the river, assuming no additional erosion takes place.
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Examiner Reader said:
Thank you, thank you, thank you. I tried to get friends and neighbors to read the junk on the CCS website and they didn't believe the state was spending money to put this plan together, let alone actually do it. Unfortunately we have part of it in place already that will cost us hundreds og millions of dollars for years to come - one example being the Regional Green House Gas Initiative (RGGI). Electric rate payers will pay for years for this farse to fund pet projects of the CCS plan. Lets hope this article casts some light on run amuck junk science and stops the stupidity.
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Sam Wright - Essex, MD said:
"Take sea level rises, for example. Boesch’s report claims that Maryland’s waters will rise four feet, wiping away 200 square miles of land and islands, along with submerging large swaths of coastal counties. This is pure fantasy." My apartment faces Back River in Essex. If the ocean is rising and Maryland shores are threatened, why does Back River still dry up?
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Examiner Reader said:
First and foremost, once you have served your time and paid your fines and are released from probation, parole and/or prison, your sentence should be done. If you don't let someone vote, work or be part of society, then you leave them no choice but to return to what they know. Let's not leave out the fact that felonies are handed out like parking tickets in some areas. What's the use of a "Justice System" and "Laws"? Open your eyes, people can change! By the way. To the writer of the article, if you really believe this way, wouldn't you be more happy in a place like Russia,China,Iraq or some other closed minded country?? Just saying......
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Lies, Damned Lies, and Demographics said:
MCCC is the Maryland Climate Change Commission, mentioned earlier in the article. However, I'm not sure who the "IPCC" is.
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Examiner Reader said:
Newgent says: "The MCCC itself is a kangaroo court conceived and controlled by the Center for Climate Strategies, a subsidiary of an avowed alarmist advocacy group....." Mr. Newgent, please tell us what group you are referring to. This article is just a shallow, childish rant.
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Lies, Damned Lies, and Demographics said:
Would the author care to cite a scientific source for his alarmist claims? Specifically, "In Maryland, the recently deceased federal cap- and-trade bill, Lieberman-Warner, by 2020 would have resulted in 40,000 jobs lost, a 70 percent increase in gasoline prices, a 40 percent increase in electricity costs and a $4.2 billion loss in gross state product"
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