Oil Prices

[sheaf_stout]

Don't worry the government will save us

 

They want to control everything. They're doing real good on social security and public education. Let's give em health care and gas prices now.

 

http://www.realclearpolitics.com/articles/2007/05/what_do_they_mean_by_obscene_p.html'>http://www.realclearpolitics.com/printpage/?url=http://www.realclearpolitics.com/articles/2007/05/what_do_they_mean_by_obscene_p.html

 

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May 31, 2007

Demagoguery Beats Data on Gas Prices

By Thomas Sowell

 

With gasoline prices rising, political rhetoric is rising even faster. Liberals in Congress and in the media have launched a war of words, whose net result may well be a demand for some form of price control.

 

Price controls are not a new idea. There have been price controls in countries around the world. There were price controls during ancient times in Babylon and in the Roman Empire.

 

Whatever the hopes that may have inspired price controls, economists have studied their actual consequences, which have been remarkably similar from one place to another and from one time to another -- and almost invariably bad.

 

That history has even included higher prices in places with price controls. For example, New York and San Francisco have severe rent control laws -- and some of the highest average rents in the country.

 

But those pushing for price controls on gasoline are not likely to go into facts about the consequences of price controls, much less go into the economics that explains why such bad consequences have repeatedly followed price controls.

 

This issue, like so many others, is likely to be settled on the basis of rhetoric. And, on that basis, the left has always had the advantage.

 

As former House Majority Leader Dick Armey -- an economist by trade -- has put it: "Demagoguery beats data" in political battles.

 

The demagoguery in this case is that "price gouging" and "greed" explain rising gasoline prices -- and that price controls will put a stop to it.

 

It is an exercise in futility to try to refute words that are meaningless. If a word has no concrete meaning, then there is nothing that can be refuted. "Price gouging" is a classic example.

 

The phrase is used when prices are higher than most people are used to. But there is nothing special or magic about what we happen to be used to.

 

When the conditions that determined the old prices change, the new prices are likely to be very different. That is not rocket science.

 

How have conditions changed in recent years? The biggest change is that China and India -- with more than a billion people each -- have had rapidly growing economies ever since they began relaxing government controls and allowing markets to operate more freely.

 

When there are rising incomes in countries of this size, the demand for more petroleum for both industry and consumers is huge. Increasing the supply of oil to meet these escalating demands is not nearly as easy.

 

In the United States, liberals have made it virtually impossible, by banning drilling in all sorts of places and preventing any new refinery from being built anywhere in the country in the last 30 years.

 

Prices are like messengers carrying the news of supply and demand. Like other messengers carrying bad news, they face the danger that some people think the answer is to kill the messenger, rather than taking steps to change the news.

 

The strongest proponents of price controls are the strongest opponents of producing more oil. They say the magic words "alternative energy sources" and we are supposed to swoon -- and certainly not ask any rude questions like "At what cost?"

 

Then there are the famous "obscene" profits of oil companies. Again, there is no definition and no criterion by which you could tell obscene profits from PG-13 profits or profits rated G.

 

There is not the slightest interest in how large the investments are that produced those profits. Relative to the vast investments involved, oil company profits do not begin to approach the rate of return received by someone who bought a house in California ten years ago and sells it today.

 

Oil company executives make big bucks incomes, almost as much as liberal movie stars who are never criticized for "greed." And if Big Oil CEOs worked for nothing, it is unlikely to be enough to bring the price of a gallon of gas down by a nickel.

 

But facts are not nearly as exciting as rhetoric -- and the role of most political rhetoric is to be a substitute for facts.

 

Copyright 2007 Creators Syndicate Inc.

 

Page Printed from: http://www.realclearpolitics.com/articles/2007/05/what_do_they_mean_by_obscene_p.html at June 01, 2007 - 09:52:25 AM CDT

[Dechristo]

Glad to see a quote of Sowell.

[Seahawks]

Oil prices are high becuase big oil basically has a monopoly on the oil industry. It almost the same as the electric companies back when the government built the Grand Coulee Dam. Roosevelt was willing to say screw big business. While part of it was to put people back to work the other part was to bring down the high cost of electricity.

 

Governement need to break up this monoploy. Get some competition going.

[Dechristo]

stfu, clueless twit

[KaskadskyjKozak]

 

Price controls are one more (huge) step on the way to serfdom.

 

[Seahawks]

stfu, clueless twit

 

Study your history if you think I'm clueless you fucktard.

[Seahawks]

stfu, clueless twit

 

Here just to prove your a clueless twit yourself and really know nothing. This is part of Roosvelts Portland speach.

 

Let us go back to the beginning of this subject. What is a public utility? Let me take you back three hundred years to old King James of England. The reign of this king is remembered for many great events--two of them in particular. He gave us a great translation of the Bible, and, through his Lord Chancellor, a great statement of public policy. It was in the days when Shakespeare was writing Hamlet and when the English were settling Jamestown, that a public outcry rose in England from travelers who sought to cross the deeper streams and rivers by means of ferry-boats. Obviously these ferries, which were needed to connect the highway on one side with the highway on the other, were limited to specific points. They were, therefore, as you and I can understand, monopolistic in their nature. The ferry-boat operators, because of the privileged position which they held, had the chance to charge whatever the traffic would bear, and bad service and high rates had the effect of forcing much trade and travel into long detours or to the dangers of attempting to ford the streams.

 

The greed and avarice of some of these ferry-boat owners were made known by an outraged people to the King himself, and he invited his great judge, Lord Hale, to advise him.

 

The old law Lord replied that the ferrymen's business was quite different from other businesses, that the ferry business was, in fact, vested with a public character, that to charge excessive rates was to set up obstacles to public use, and that the rendering of good service was a necessary and public responsibility. "Every ferry," said Lord Hale, "ought to be under a public regulation, to-wit: that it give attendance at due time, keep a boat in due order, and take but reasonable toll."

 

In those simple words, my friends, Lord Hale laid down a standard which, in theory at least, has been the definition of common law with respect to the authority of Government over public utilities from that day down to this.

 

With the advance of civilization, many other necessities of a monopolistic character have been added to the list of public utilities, such as railroads, street railways, pipelines and, more lately, the distribution of gas and electricity.

 

The principle was accepted, firmly established, and became a basic part of our theory of Government long before the Declaration of Independence itself. The next problem was how to be sure that the services of this kind should be satisfactory and cheap enough while at the same time making possible the safe investment of private capital.

 

For more than two centuries, the protection of the public was vested in legislative action, but with the growth of the use of public utilities of all kinds in these later days, a more convenient, direct and scientific method had to be adopted--a method which you and I now know as control and regulation by public service or public utility commissions.

 

Let me make it clear that I have no objection to the method of control through a public service commission. It is, in fact, a proper way for the people themselves to protect their interests. In practice, however, it has in many instances departed from its proper sphere of action, and, I may add, has departed from its theory of responsibility. It is an undoubted and undeniable fact that in our modern American practice the public service commissions of many States have often failed to live up to the very high purpose for which they were created. In many instances their selection has been obtained by the public utility corporations themselves. These corporations, to the prejudice of the public, have often influenced the actions of public service commissions. Moreover, some of the commissions have, either through deliberate intent or through sheer inertia, adopted a theory, a conception of their duties wholly at variance with the original object for which they were created

[Dechristo]

 

Oil prices are high becuase big oil basically has a monopoly on the oil industry.

 

Governement need to break up this monoploy. Get some competition going.

 

What? Are you alluding to Johnny D. and S.O.? pfffft

The picture is just a little different, these days.

So, how do you propose to "get some competition going"?

 

 

Yeah, for your sake, I'd like to see someone get through your thick skull and break-up your mono-ploy. I'd prefer it not be the govern-nen-nen-nenna-ment.

[ashw_justin]

If there should be no government control over the oil market, then likewise no tax revenue should be spent to subsidize or otherwise offer support to it either. Correct me if I'm wrong but I'm under the impression that this has not been the case.

[Dechristo]

stfu, clueless twit

 

Here just to prove your a clueless twit yourself and really know nothing. This is part of Roosvelts Portland speach.

 

Let us go back to the beginning of this subject. What is a public utility? Let me take you back three hundred years to old King James of England. The reign of this king is remembered for many great events--two of them in particular. He gave us a great translation of the Bible, and, through his Lord Chancellor, a great statement of public policy. It was in the days when Shakespeare was writing Hamlet and when the English were settling Jamestown, that a public outcry rose in England from travelers who sought to cross the deeper streams and rivers by means of ferry-boats. Obviously these ferries, which were needed to connect the highway on one side with the highway on the other, were limited to specific points. They were, therefore, as you and I can understand, monopolistic in their nature. The ferry-boat operators, because of the privileged position which they held, had the chance to charge whatever the traffic would bear, and bad service and high rates had the effect of forcing much trade and travel into long detours or to the dangers of attempting to ford the streams.

 

The greed and avarice of some of these ferry-boat owners were made known by an outraged people to the King himself, and he invited his great judge, Lord Hale, to advise him.

 

The old law Lord replied that the ferrymen's business was quite different from other businesses, that the ferry business was, in fact, vested with a public character, that to charge excessive rates was to set up obstacles to public use, and that the rendering of good service was a necessary and public responsibility. "Every ferry," said Lord Hale, "ought to be under a public regulation, to-wit: that it give attendance at due time, keep a boat in due order, and take but reasonable toll."

 

In those simple words, my friends, Lord Hale laid down a standard which, in theory at least, has been the definition of common law with respect to the authority of Government over public utilities from that day down to this.

 

With the advance of civilization, many other necessities of a monopolistic character have been added to the list of public utilities, such as railroads, street railways, pipelines and, more lately, the distribution of gas and electricity.

 

The principle was accepted, firmly established, and became a basic part of our theory of Government long before the Declaration of Independence itself. The next problem was how to be sure that the services of this kind should be satisfactory and cheap enough while at the same time making possible the safe investment of private capital.

 

For more than two centuries, the protection of the public was vested in legislative action, but with the growth of the use of public utilities of all kinds in these later days, a more convenient, direct and scientific method had to be adopted--a method which you and I now know as control and regulation by public service or public utility commissions.

 

Let me make it clear that I have no objection to the method of control through a public service commission. It is, in fact, a proper way for the people themselves to protect their interests. In practice, however, it has in many instances departed from its proper sphere of action, and, I may add, has departed from its theory of responsibility. It is an undoubted and undeniable fact that in our modern American practice the public service commissions of many States have often failed to live up to the very high purpose for which they were created. In many instances their selection has been obtained by the public utility corporations themselves. These corporations, to the prejudice of the public, have often influenced the actions of public service commissions. Moreover, some of the commissions have, either through deliberate intent or through sheer inertia, adopted a theory, a conception of their duties wholly at variance with the original object for which they were created

 

I'm in awe...

 

 

 

...in the totality of your lack of comprehension (that's kinda like saying, "cluelessness") you baboon-faced, knuckle-dragging, own-quote-uncomprehending, nitwit.

[Seahawks]

in case you want to really learn something here is the whole thing.

 

http://newdeal.feri.org/speeches/1932a.htm

 

and there are some simularities to the oil companies.

Edited June 1, 2007 by Seahawks

[ashw_justin]

Price controls are one more (huge) step on the way to serfdom.

 

The analogy to feudalism (the system under which serfdom existed) I take it is the situation in which a government grants the monopoly over an isolated market to a single provider, perhaps a government-controlled one, instead of allowing organic mechanisms of competition to prevail. If you're drawing some other parallel to feudalism then please forgive me and explain.

 

But I don't see why such a provider necessarily needs to be an official entity of the government--any government-sanctioned monopoly would be sufficient to impose serfdom. In fact a private monopoly is further removed from non-monetary public scrutiny than a public one. So while I think we would agree that monopoly would be the cause of serfdom, I'd argue that under our current system, the greater and more present threat of monopoly is feudal privatization sold falsely as economic liberalism. That is, exclusive, politically-connected government support for particular providers of essential services over others.

 

I don't know enough about the oil industry to know if that kind of thing has happened. Then again, when I look who's in the White House, I wonder if that's not a coincidence.

[kevbone]

What about frogs? I like frogs.....what if your kite whines around a power line? Call the kite man.

[ivan]

fuck you sheaf - why should i read or comment on your crap if you're not going to stick around for it?

 

quit ruining a perfectly good beer w/ your fucktard performance

[G-spotter]

I think we should just combine sheaf stout with dave schuldt... get the leftie and the rightie link2blog posters to cancel each other out.