Wednesday, May 14, 2008

No Monopoly on Stupid

Once upon a time there was a debate between certain Republicans and Democrats about a handful of barrels of oil. One side puffed its populist chest out and claimed how much it would help the honest workin' man by lowering the price at the pump. The other side took a careful look at the proposal and keenly pointed out that it would make almost no impact on the world price of oil. Both side seemed to have ulterior political motives at heart. Heard this story before? It took place in 2000 and the debate was over the opening of ANWR in Alaska to drilling for oil. George W. Bush on the one side claimed that releasing the reserve to drilling would push the price of oil down and help good ole workin folks; Al Gore on the other side claimed that it would have little or no effect on oil. Bush was receiving money and political support from the oil lobby who stood to gain from the deregulation of drilling and the subsidized pipeline; Gore was receiving money and political support from environmental lobbies who opposed all forms of environmental damage.

Now the roles are reversed as the debate rages over the strategic oil reserves. Bush is out there claiming that the price would go unaffected; democrats are making wild claims about how much halting the stockpiling of oil will save blue-collar Americans. The release of the oil (or the stopping of its stockpiling) would be mildly detrimental to the oil lobby by slightly reducing the demand for their output; passing the moratorium would give the appearance that the democrats have done "something."

Bottom line: Like I've always said, "no political party has a monopoly on stupid economic ideas." Its corollary is probably that when they stumble on a good one it's either unintentional or for the wrong reasons. When will folks realize that if oil is as scarce as some claim then higher prices are the appropriate outcome?

No comments:

Post a Comment