Monday, June 09, 2008
Saturday morning, on Fox News, one talking head described the current run-up in the price of oil as "capitalism run amok." As an ardent capitalist, I took the remark very personally and was deeply hurt.
It took about 24 hours to sink in that, as is the case more often than not, the babbler had struck close enough to hurt but missed the target.
In a true capitalist (i.e., Adam Smith) market, producers would increase supply to meet demand, until a market equilibrium was reached. So far as oil is concerned, it is not a capitalist market. Nearly 90 percent of the world's oil production is in the hands of state-owned monopolies, read, "Saudi Arabia, Russia, Iran, Venezuela, Mexico," etc. (This is why Barackish attacks on "big oil" are so heinously untruthful. Exxon, et al., control only a small fraction of the world's production, produce only a portion of the requirements of their refineries -- and are thus subject to the price run-up as they purchase to meet their needs -- and earn only a small piece of the so-called "windfall profits." But, I digress.) These state-owned monopolies have little or no incentive to increase production, as their price decisions are reflections of political agendas. Moreover, in the part of the world where oil production is not in the hands of the state, meaning, principally, the United States, oil producers are prevented from increasing production by whacko tree-hugging enviro-weenies living in Palisades, New Jersey (and similar places) who have never seen an Arctic tern (even in an aviary) but need assurance that no caribou will ever bump its antlers on a pipeline in order that they might sleep better at night.
Former Speaker Newt Gingrich is peddling bumper stickers that read, "Drill Here; Drill Now; Pay Less." To which I add, "Buy It; Put It On; Vote That Way in November." (See www.americansolutions.com.)
It took about 24 hours to sink in that, as is the case more often than not, the babbler had struck close enough to hurt but missed the target.
In a true capitalist (i.e., Adam Smith) market, producers would increase supply to meet demand, until a market equilibrium was reached. So far as oil is concerned, it is not a capitalist market. Nearly 90 percent of the world's oil production is in the hands of state-owned monopolies, read, "Saudi Arabia, Russia, Iran, Venezuela, Mexico," etc. (This is why Barackish attacks on "big oil" are so heinously untruthful. Exxon, et al., control only a small fraction of the world's production, produce only a portion of the requirements of their refineries -- and are thus subject to the price run-up as they purchase to meet their needs -- and earn only a small piece of the so-called "windfall profits." But, I digress.) These state-owned monopolies have little or no incentive to increase production, as their price decisions are reflections of political agendas. Moreover, in the part of the world where oil production is not in the hands of the state, meaning, principally, the United States, oil producers are prevented from increasing production by whacko tree-hugging enviro-weenies living in Palisades, New Jersey (and similar places) who have never seen an Arctic tern (even in an aviary) but need assurance that no caribou will ever bump its antlers on a pipeline in order that they might sleep better at night.
Former Speaker Newt Gingrich is peddling bumper stickers that read, "Drill Here; Drill Now; Pay Less." To which I add, "Buy It; Put It On; Vote That Way in November." (See www.americansolutions.com.)
# posted by JGB @ 9:37 AM 
