Aff - Nationalization Add On - Michigan 7 2023 CFMP

Aff---Oil Nationalization---CFMLP
AFF
2AC --- Add on
Aff solves Social Security and emissions.
Wunder 23[ Timothy A. Wunder (2023) Timothy Wunder is a professor in the Economics department at University of Texas at Arlington. Social Security Privatization: Zombies Never Die, Journal of Economic Issues, 57:2, 514-521, DOI: 10.1080/00213624.2023.2201795 Accessed 6/19/2023] RRMW
U.S. Oil industry:
A second major investment could be the purchase and phase-out of the U.S. oil industry. The current market capitalization of the U.S. oil industry is $2.2 trillion with earnings of $261 billion, or roughly a 11% ROI (Companiesmarketcap.com Citation2022). At the time of writing, earnings are high due to the Russian invasion of Ukraine, therefore the assumption of continuing returns of 11% is questionable. However, by monopolizing the U.S. oil industry, high prices and profits could be guaranteed, and continually rising petroleum prices would convince consumers to look for alternatives, thereby cutting greenhouse gas emissions. By allowing SS to buy the industry it would be possible to continuously increase prices, resulting in major profits to SS investors as well as diminishing global climate emissions.
Combating climate change will require the elimination of the oil industry and this policy would capture the monopoly rents that such a phase-out would entail to help seniors. A U.S. oil monopoly would also give this new company monopsony power to push down international oil prices by lowering the quantity of oil purchased globally. With declining global prices and quantities, further exploration for oil might finally be curtailed. Current international holders of oil reserves might even attempt to sell, prior to the U.S. elimination of its oil consumption, which would also tend to drive world oil prices down. Assuming a 15-year phase-out profits could be extensive.
Conclusion
Currently there are a group of privateers who are recommending that the U.S. government should force workers to “invest” what would have been tax dollars into private companies picked by the government upon the advice of financial industry leaders. The policy also guarantees that the new “investors” must channel their money into a broad spectrum of companies so that the investments are “safe,” but this also means that the $16 trillion won’t be used in large blocks to buy poorly run businesses, reorganize them, and make major profits, as would happen with other major investment pools.
Whether these potential outcomes were of intentional design or just unexplored possibilities is unknown. If proponents of privatization are truly looking for innovative ways to channel government directed money into the private sector, then those investments should be designed to maximize returns to the people they are suggesting investments to. It seems weird that conservatives would offer the partial nationalization of private industry as a solution to relatively minor problems faced by Social Security, but partial nationalization is what this represents. Whether the moneys are invested broadly or in specific companies is irrelevant, privatization is a policy that will result in the government choosing which companies will be invested in, and if conservative economists are truly into “saving SS,” the program should be designed to be as profitable as possible for those investors. One better way to use this nationalization would be to deal with industries that are currently problematic. The major outcome of privatization through index investments, as conservatives think tanks have advocated, would be asset price inflation that would mainly benefit current asset owners as well as fees which would go to the investment firms channeling this money into the market.
Aff solves privatization debates that prevent solutions to war, climate change, disease, and famine
Timothy A. Wunder 23, Professor of Economics at University of Texas at Arlington. "Social Security Privatization: Zombies Never Die" Journal of Economic Issues Volume 57, 2023 - Issue 2 https://doi-org.proxy.lib.umich.edu/10.1080/00213624.2023.2201795 //pipk
Institutional economists spend a great deal of time pointing out the unexplored problems existing within mainstream economic proposals. The privatization of Social Security (SS) is one such proposal and, like the locusts of old, this proposal will once again come to plague our political discourse. In a world facing existential threats from war, climate change, pandemic, and famine it is inevitable the right wing of the U.S. political system will once again turn to issues they really see as important: how to increase profit margins for international finance. Social Security privatization is a complex solution to a relatively minor problem. This essay will summarize the general shape of privatization schemes and explore two major problems they have as proposed. The essay will then offer a differing way to organize privatization that may call into question how well privatization would work.
Impact --- Climate Change
Nationalization of oil is key to stop climate change
Pollin 22 [Robert Pollin, 4-8-2022, "Nationalize the U.S. Fossil Fuel Industry to Save the Planet," American Prospect, https://prospect.org/environment/nationalize-us-fossil-fuel-industry-to-save-the-planet/, smarx, Harry]
Even as Vladimir Putin’s barbaric invasion of Ukraine proceeds and concerns over the subsequent high gas prices proliferate, we cannot forget that the climate crisis remains a dire emergency. The latest report of the U.N.’s Intergovernmental Panel on Climate Change (IPCC)—the most authoritative source on climate change research—could not be more explicit in reaching this conclusion. U.N. Secretary General António Guterres described the report as a “file of shame, cataloguing the empty pledges that put us firmly on track towards an unlivable world.” This follows several equally vehement studies in recent years, as well as those from other credible climate researchers.
If we are finally going to start taking the IPCC’s findings seriously, it follows that we must begin advancing far more aggressive climate stabilization solutions than anything that has been undertaken thus far, both within the U.S. and globally. Within the U.S., such measures should include at least putting on the table the idea of nationalizing the U.S. fossil fuel industry.
One specific way to proceed would entail the federal government purchasing controlling ownership of at least the three dominant U.S. oil and gas corporations: ExxonMobil, Chevron, and ConocoPhillips. We could start with these giants because they are far larger and more powerful than all the U.S. coal companies combined, as well as all of the smaller U.S. oil and gas companies. The cost to the government to purchase majority ownership of these three oil giants would be about $420 billion at current stock market prices. This is a formidable sum, but it is only slightly more than 10 percent of the roughly $4 trillion that the Federal Reserve authorized to spend to bail out the corporate sector in 2020, during the COVID lockdown and recession.
The main argument for nationalizing the U.S. oil giants is straightforward. The single most important factor causing climate change is that we continue to burn oil, natural gas, and coal to produce energy. It follows that we must stop burning fossil fuels to have any chance of moving the global economy onto a viable climate stabilization path. By contrast, the purpose of private fossil fuel companies in the U.S. and elsewhere is precisely to make profits from selling oil, coal, and natural gas, no matter the consequences for the planet and regardless of how the companies may present themselves in various high-gloss, soft-focus PR campaigns.
With at least ExxonMobil, Chevron, and ConocoPhillips under public control, the necessary phaseout of fossil fuels as an energy source could advance in an orderly fashion. The government could determine fossil fuel energy production levels and prices to reflect both the needs of consumers and the requirements of the clean-energy transition. This transition could also be structured to provide maximum support for the workers and communities that are presently dependent on fossil fuel companies for their well-being.
Oil controls the economy – nationalization is crucial to building clean energy infrastructure
Pollin 22 [Robert Pollin, 4-8-2022, "Nationalize the U.S. Fossil Fuel Industry to Save the Planet," American Prospect, https://prospect.org/environment/nationalize-us-fossil-fuel-industry-to-save-the-planet/, smarx, Harry]
Oil Profits and Inflation
Our current bout with high inflation provides only the most recent reminder of the absolutely central role played by oil companies in the U.S. economy’s operations. Overall, inflation in February of this year was up to 7.9 percent, a 40-year high. The increase in retail energy prices alone accounted for roughly two percentage points (or 24 percent) of the overall inflation rate. The main specific drivers, in turn, of rising energy costs were the spikes in gasoline and fuel oil prices. As of April 4, the average price for gasoline at the pump increased over the past year from $2.85 to $4.17 per gallon, a nearly 50 percent rise.
It is true that the oil companies were clobbered during the initial COVID lockdown months, as energy demand collapsed. The price of gasoline bottomed out at $1.73 per gallon in April 2020, a 23 percent fall from the pre-COVID level. The stock prices of the three U.S. oil giants fell by nearly 50 percent during this brief period.
But such misfortunes were short-lived. The companies have been flourishing since COVID restrictions have eased. As of this writing in early April, the stock prices of the three big oil companies were nearly 60 percent higher than their pre-COVID levels. Their outsized profits are coming from the pockets of U.S. consumers paying $4.17 instead of $2.85 for a gallon of gasoline.
A nationalized U.S. fossil fuel industry could play a significant positive role in building the clean-energy infrastructure at the scale and speed we need.
And yet, if we are going to take the climate emergency seriously, we cannot advocate for gasoline prices to fall back to pre-COVID levels. On behalf of saving the planet, we actually need all fossil fuel prices to remain high, and indeed, if anything, to increase still further. This is because high prices for oil, as well as for natural gas and coal, will discourage consumers from buying fossil fuels to meet their energy needs. Correspondingly, high fossil fuel prices will incentivize efforts to build a new energy infrastructure, whose two pillars will be high efficiency and renewable energy, in particular solar and wind power. A high-efficiency, renewable energy-dominant infrastructure will, among other things, deliver cheaper energy than our current fossil fuel–dominant system.
But that cannot happen in an instant. In the meantime, we cannot allow working-class and middle-class people to experience cuts in their living standards right now through high fossil fuel prices, while oil companies’ profits explode. How can we effectively address these equally valid, though competing, considerations?
Some straightforward solutions are readily at hand, at least on paper, while recognizing that the fossil fuel companies will vehemently oppose all of them. One approach being considered in Congress now is a “windfall tax” on the oil companies’ current level of outsized profits. In the Senate version of this measure introduced by Sen. Sheldon Whitehouse (D-RI), the oil companies would be taxed at half the difference between the current retail oil prices and the average pre-pandemic price between 2015 and 2019. Reps. Ro Khanna (D-CA) and Peter DeFazio (D-OR) have introduced similar proposals in the House.
The time is now to nationalize oil and move to clean energy
Becker 22 [William S. Becker, Opinion Contributor, 6-25-2022, "Why we must nationalize Big Oil," Hill, https://thehill.com/opinion/energy-environment/3536866-why-we-must-nationalize-big-oil/, smarx, Harry]
Clear and present damage
The U.S. Energy Information Administration says if current energy policies continue, fossil fuels will still dominate America’s energy mix in 2050, crude oil production will set records, and natural gas exports will drive the production of that fuel. The nation’s cost would be $2 trillion a year by 2100, according to the White House Office of Management and Budget (OMB). Climate-related weather disasters in the U.S. have already cost $765 billion in the last five years, including $145 billion last year.
Big Oil has made a show of concern. In 2021, 12 of the world’s biggest oil and gas companies pledged to achieve “net-zero emissions” in their operations. However, research soon found “the industry’s magnitude of investments and actions does not match discourse” and “accusations of greenwashing appear well-founded.”
What should the federal government do? First, it should acknowledge that the quickest and most effective way to stabilize the climate is not to waste more time trying to decarbonize carbon fuels; instead, it should facilitate a shift to genuinely clean and renewable energy.
Second, it should fix America’s energy market by eliminating policies that distort price signals. With prices that accurately reflect full lifecycle benefits and costs, renewable resources would advance more quickly because they are free, inexhaustible, ubiquitous and naturally clean.
Third and most important, the government should nationalize Big Oil. That would allow the government to manage the industry’s drawdown, a process the private sector is ignoring. A coalition of climate-action groups showed the world’s 60 largest banks financed nearly $4 trillion in fossil energy projects over the last five years, investments that could be stranded and lead to more requested taxpayer bailouts when the carbon bubble pops.
Nationalization of oil leads towards energy independence
Westervelt 22 [Amy Westervelt, 3-11-22, "The U.S. Government Doesn’t Control Domestic Oil Production. But It Should.," Intercept, https://theintercept.com/2022/03/11/oil-prices-russia-ban/, smarx, Harry]
The government doesn’t place any production limits on oil and gas companies, and there’s no such thing as an immediate production increase.
“Typically the price spike would occur and rather than pay dividends as robustly as they are paying now, they would buy up other assets and maybe increase production,” he said. “What’s happening now is not typical. They’re not buying up other assets, and they’re not drilling. What does that mean for the future? It’s hard to say. It’s possible they’re just biding their time, building confidence amongst investors and will increase production next year, but this is definitely not the typical response to a price spike.”
Instead, they’re banking that money, using it to make up for profits lost in the pandemic and mostly to conduct massive stock buybacks that keep their shareholders happy and might just bring investors back to fossil fuel for one more round.
Which brings us to the elephant in the room: the United States’s supposed energy independence. As a net exporter of oil and gas, that’s what the country was promised by industry. But you can’t have independence if you are ruled entirely by global commodity markets. The other big oil-exporting countries are able to use their production capabilities to protect themselves from sudden price changes because their fossil fuel industries are nationalized. Because the U.S. energy sector is entirely private, we have no such luck. For all the industry’s squawking about federal leases, only 10 percent of U.S. drilling happens on public land, the rest is on private land that the government has zero control over. And, again, there is no government entity overseeing production; it’s left entirely up to companies to produce as much or as little oil as they think will be profitable. The closest we have to a regulatory body on production is the Texas Railroad Commission, but even when oil prices went negative during the pandemic, the commission opted not to impose production limits.
Although Biden floated the idea of reinstating the export ban when he campaigned for president, his Energy Secretary Jennifer Granholm took that off the table almost immediately. It hasn’t reemerged in the Russia-Ukraine debates, and U.S. exports helped Europe absorb the sudden cutoff of Russian fuel supplies. But an export ban is not a terrible long-term plan. And since the industry is accusing the government of meddling with production anyway, why not call its bluff and start a real conversation about nationalizing the industry and marching it toward a transition to renewable energy? What we’re seeing now is an entirely unmanaged transition, unfolding in real time. It’s painful, and the future is completely unclear, but none of that has to be true.
Nationalizing oil solves the U.S.’s energy independence.
Westervelt 22 — Amy Westervelt, print and audio journalist, founder of the Critical Frequency podcast network, 2022 (“THE U.S. GOVERNMENT DOESN’T CONTROL DOMESTIC OIL PRODUCTION. BUT IT SHOULD.,” The Intercept, March 11th, Available Online at https://theintercept.com/2022/03/11/oil-prices-russia-ban/, Accessed 07-07-2023)
“Typically the price spike would occur and rather than pay dividends as robustly as they are paying now, they would buy up other assets and maybe increase production,” he said. “What’s happening now is not typical. They’re not buying up other assets, and they’re not drilling. What does that mean for the future? It’s hard to say. It’s possible they’re just biding their time, building confidence amongst investors and will increase production next year, but this is definitely not the typical response to a price spike.”
Instead, they’re banking that money, using it to make up for profits lost in the pandemic and mostly to conduct massive stock buybacks that keep their shareholders happy and might just bring investors back to fossil fuel for one more round.
Which brings us to the elephant in the room: the United States’s supposed energy independence. As a net exporter of oil and gas, that’s what the country was promised by industry. But you can’t have independence if you are ruled entirely by global commodity markets. The other big oil-exporting countries are able to use their production capabilities to protect themselves from sudden price changes because their fossil fuel industries are nationalized. Because the U.S. energy sector is entirely private, we have no such luck. For all the industry’s squawking about federal leases, only 10 percent of U.S. drilling happens on public land, the rest is on private land that the government has zero control over. And, again, there is no government entity overseeing production; it’s left entirely up to companies to produce as much or as little oil as they think will be profitable. The closest we have to a regulatory body on production is the Texas Railroad Commission, but even when oil prices went negative during the pandemic, the commission opted not to impose production limits.
Although Biden floated the idea of reinstating the export ban when he campaigned for president, his Energy Secretary Jennifer Granholm took that off the table almost immediately. It hasn’t reemerged in the Russia-Ukraine debates, and U.S. exports helped Europe absorb the sudden cutoff of Russian fuel supplies. But an export ban is not a terrible long-term plan. And since the industry is accusing the government of meddling with production anyway, why not call its bluff and start a real conversation about nationalizing the industry and marching it toward a transition to renewable energy? What we’re seeing now is an entirely unmanaged transition, unfolding in real time. It’s painful, and the future is completely unclear, but none of that has to be true.
Nationalizing

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