Rare-earth minerals are critical inputs in the manufacture of high-tech products ranging from computers/iPhones, hybrid cars and on to missles. More than 95 percent of the world's rare-earths are produced in China. China in turn has instituted rigid export quotas, extensive taxes and export fees that have contributed to significant price surges of rare-earths in recent years.
Acting in tandem with the European Union and Japan the president announced last week in Washington, "If China would simply let the market work on its own, we'd have no objections. But their policies currently are preventing that from happening..."
Ironically the president's concerns about the workings of the market came almost in lockstep with a moment of vacuous hypocrisy, when the world's top oil producers, preparing to meet in Kuwait, voiced concern that high oil prices could jeopardize a global economic recovery, as though Kuwait, seat of one of the leading OPEC practioners, and its fellow cabal adherents, could not have done much, much more to prevent oil prices from reaching their current extortionist levels. To make the markets more nervous yet, after extensive assurances that they stood ready to fill any gap caused by the Iranian oil embargo, the Saudis took the occasion to begin backtracking on their solidarity with oil embargo policies toward Iran, when Saudi officialdom announced their reluctance to stay the course:
"We don't want to replace Iranian oil and we never said we wanted to. We will step in and fill any gap if needed." He probably should have added, "If prices remain high enough."
So on it goes. OPEC continues to practice its restraint of trade scot-free, with nary a word of condemnation given the influence of oil interests, the commodity exchanges, and our incredibly oblivious courts extending 'sovereign immunity' to OPEC's national oil companies permitting them to collude shamelessly, ratcheting up oil prices to the enormous benefit of the oil companies who are reporting record-breaking profits, at the staggering cost to the public at large in the price of gasoline, diesel and heating oil while placing the health of the economy in danger.
Given President Obama's sudden concern for letting the "market work on its own" perhaps it's time that one revisits the efforts made during the Bush administration to pass NOPEC legislation which would have permitted the Justice Department and the Federal Trade Commission to sue OPEC under U.S. anti-trust laws. In 2007 the Senate (70-23) and the House (345-72) voted overwhelmingly for the NOPEC law permitting legal action against the national oil companies of the oil cartel. Not generally understood is OPEC's ability to operate outside the law hiding behind our sovereign immunity shield in a way that the oil companies and oil interests have benefitted in the billions if not trillions over the years. (please see "Oil: a Defining Moment for Our Political Class and the Press").
Were one to judge the merits of the bill by its detractors one needed only to have looked as far as the American Petroleum Institute, the trade association of the oil industry, and such Washington beltway think tanks as the Energy Policy Research Foundation whose director at the time, was quoted as saying, "Our friends in the Middle East understand we are just venting steam." Most significantly was then President George W. Bush's clear threat, given his ties to the oil industry and Saudi interests, to veto the legislation should it have landed on his desk.
But that was then and now is now. In the near four years of President Obama's administration virtually nothing has been done to slow or reverse the steep escalation of oil, and in turn gasoline prices. Almost from the inception of his administration the price of oil ballooned from $33/barrel in February 2009 to over $105/bbl today. Certainly refocusing government's attention on a NOPEC law might have helped enormously to restrain prices. Given the government's silence on this issue, its general lack of initiative on matters directly impacting oil prices, be it OPEC or commodity speculation, one begins to wonder if on the issues of oil and its price, whether President Obama has become an acolyte of President George W. Bush.
If restraint of trade in matters relating to China's control and manipulation of the rare-earths market is of current and pressing concern, then focus on the OPEC oil cartel and its impact on the price of oil and gasoline, on our economy and national security is long past due, certainly and at the very least by the number of years that this administration has been in office. It is well past time that our government acts on behalf of the national interest rather the moneyed influence of the oil companies and their allies.