OPEC, Keynes, unions and the reserve army

[Paul Davidson <PB108928%UTKVM1.BITNET@xxxxxxxxxxxxxxxxx>]

FROM:  Paul Davidson
"      Economics Department
"      523 Stokely Management Center  (615) 974-4221
Whay Abbas alassawi fails to note is that from 1951 to 1971 the realcost of
exploration and developing oil in the Middle East was continualy dropping
till it reached less than 10 cents a barrel in 1971. In the meanswhile
the oil companies kept the nominal price of oil constant since 195os when, ac-
cording to the Church Committee hearings, the US IRS permitted the oil nations
to institute a per barrel tax that was fully credited against US income
taxes (despite the usual ruling that foreign taxes are only credited against
US income tax liabilities if they are levied on DOMESTIC as well as foreign
nationals ) thereby substantially raisin the OPEC nations share of the economic
controlled by the oil companies. The oil companies were then kept from maximizi
ng monopoly rents by a combination of Congressional threats of anti-trust plus
pthe oil import quotas that were in place until dismantled by Nixon on the
urging of George Schultz. Once oil quotas were removed the monopoly rents for c
heaper OPEC oil skyrocketed.

Have a good day!____Paul Davidson
))))_ fax # (615) 974-1686