 |
|
|
||
|
Cheney and the Oil Cartel: Episode 2
That's just the way the "markets" are down there in Texas ... |
|||
|
Posted Monday, July 31, 2000 [From NBC's Meet the Press, Sunday, July 30.] RUSSERT: You were in favor of reducing the world's oil supply, which drove up gasoline prices for American drivers. As a CEO of a company, as vice president, would that still be your position? ...There are a number of things to be said about this exchange. First, it's an odd idea of capitalism that abhors "volatility" in prices, since the rise and fall of prices is the basic mechanism by which the marketplace sends information to economic actors. A system that would somehow replace this "volatility" with "stability" might be many things, but it would not be a system in which prices are "determined by the market," at least as most economists (and conservatives) understand the term. Second, there's no obvious reason the oil industry should be excepted from the normal bias in favor of letting prices do their work. Cheney argues that "when prices go up too high, it has an adverse effect on the economy and that reduces demand for oil." Sure does! And when demand for oil is reduced the price comes back down. That's sort of the idea. Similarly, if low oil prices discourage people from investing in oil exploration, as they undoubtedly do, they are sending the signal that society has less interest, at the moment, in looking for oil. The oil isn't going anywhere--it can always be discovered and tapped later. Third, a call for "stable" prices from an oil producer, or an oil services company, or more or less anyone from Texas, is usually best translated as a call for higher prices. Would Cheney really have been unhappy if the price of oil doubled on average but remained volatile? Fourth, oil prices are not now set by a free market. They are set by an international cartel, OPEC. Or at least OPEC attempts, through production cuts, to manipulate prices. When Cheney rooted for OPEC's success, he was rooting for this anti-competitive scheme, which has hardly benefited consumers. (Were you a happy consumer in the '70s, when OPEC was strong? How about in the '90s, when OPEC was weak?) Indeed, economists can prove with charts and graphs that OPEC-style monopoly pricing is a negative-sum game in which the benefit to producers doesn't come close to matching the loss to consumers. There's a dead-weight loss to the whole society. Which is one reason we have antitrust laws making OPEC-style collusion illegal for Americans. Maybe Cheney was just being an advocate for his company, Halliburton, when he egged OPEC on, and maybe he was just being evasive and slick on Meet the Press. The disturbing possibility, of course, is that he may have been honest--that OPEC's "reasonable" monopoly price is his idea of how the economy should run. He wouldn't be the first business leader to conclude that unfettered capitalism is just too disorderly and "volatile," that it inhibits statesmanlike planning. The same idea was behind Franklin D. Roosevelt's failed National Recovery Act, and a certain distinctive corporatist social movement that gained popularity in ... well, let's not go there. But you get the point: Cheney may know what the meaning of "is" is. But does he know what the meaning of "market" is? (For the original kausfiles item on Cheney's support of the OPEC cartel's attempt to provide "stability" by raising prices, click here.) New E-mail service: Sign up, using the ListBot gizmo below, and you will be notified by e-mail whenever there's a new item on kausfiles.com. [Note: this service is free. You'll be asked a couple of demographic questions; if you find them annoying just leave them unanswered.] | ||||
|
Recently archived: Cheney: Cheerleader for OPEC Let those Yankees in key Midwest battleground states freeze in the dark! Bush and Cheney: The Secret Transcripts Crock of Goldstein WaPo welfare reporter falls for Brookings spin, and worse. The Real Hillary Scandal Mr. and Mrs. Clinton forgot to get their stories straight. The Gift of Nader Gore could use a rival on his left. Rehnquist's Scandalous Shmatte Did he deduct that $30,000 robe? What's He Hiding? Notes toward a unified Bush theory. Special Re-Flogging Edition More on WaPo's hypocritical critic. CBS's Defective Defector 60 Minutes adopts Internet news standards. Looking for Mr. Good Death Mickey's Assignment Desk #8. Another Greenhouse Effect Resurgence of "labor resurgence" stories puzzles experts. Crosswired Politics Why the parties are trading places on some issues. The Toobin Crisis, Day 141 Ann Godoff vs. Charles Peters. The Purnick Platform The new NYT lets it all hang out. Run, Peggy, Run! The best anti-Hillary candidate. Kuttner's Poor Statistics Have child poverty rates 'scarcely moved'? Drew's Cluelessness Please don't let her anywhere near the First Amendment. Why Gore Won't Pick Richardson An impolite thought .... How Convenient! Now McCain tells us. Now She's Done It Maybe that nice centrist Mrs. Clinton really is against welfare reform. Pardon Our Reporting Clinton left the door wide open! Elian: An Overlooked Angle? Castro did Clinton a big favor last year. Boomers Against Death The shift against the death penalty isn't necessarily a shift to the left. The Perfect Campaign All e-mail, all the time! No Justice, No Paez The LAT and 'judicial activism.' Kausfiles Battles for the Vital Center! Why Bush has plenty of time to reposition himself. Clean Sheets The case for selling the Lincoln Bedroom. Don't Push It, Hillary Plus: kausfiles moves its cheese! Faster Politics Why 'momentum' ain't what it used to be. Jeffrey Toobin, Chicken! Fifth of a series. Hillary's Shocking Truth Plus: the Nissan Cojones Watch. Hit Poems A kausfiles contest. Gore's Press Problem Plus: How he blew his chance for a New Hampshire knockout. Bush Knows What "Regatta" Means Bradley's SATS; the media's moodswing; the neolibs' nightmare. Jeffrey Toobin, Hypocrite, Part III! How dare Isikoff write a book, says Toobin in his book. Not Gotcha Why Gore's gay flip was a genuine gaffe. Pay Up, Shrum! Litmus test flip-flop smoking gun. Jeffrey Toobin, Hypocrite 'Tawdry voyeurism,' anyone? Cuomo Family Values Did Mario raise his son to be Hillary's Boy? DeParle Gets Half the Story The NYT doesn't tell us what we need to know about Milwaukee's poor. Bill Clinton Wants You on Welfare! Is this the dole administration after all? The Pornographer Who Didn't Bark Why wouldn't Flynt bust Newt? Yes, There Are Easy Answers! The NYT and WaPo find a quick fix for affirmative action. Who Stole Nissan's Cojones? Jerry Hirshberg'a got a lot of ... chutzpah! Doesn't Anyone Want to Be Famous? The political opportunity of a lifetime. The Ending of the Black Underclass, Part XVIII African-American welfare receipt falls to new low. Just Buzz Me! Synergy City! Harvey Weinstein plans a TV show based on Talk. Is Daniel Patrick Moynihan the Devil? A review of the evidence to date. Harvey Scores Again! An exciting new Talk contest. Is It Over? Clinton's Pathetic Second Term Revealing the one Big Thing he still might accomplish. Maybe Bush Didn't Snort Coke -- Maybe He Dropped Acid! One solution to the Bush drug mystery. George Bush, Drug Pioneer? Bush's pharmacological time-line seems a little ... out of the mainstream. Will Tina Fire Lucinda? Talk and truth. Copyright 2000 Mickey Kaus. 
|
|||
