Tuesday, July 08, 2008


'Bout oil

As is my usual nightly wont, I perused several of Yahoo.com's finance message boards ce soir. Someone named "MackT" was opining on why oil prices are so high, and he posted the following passage - without attribution - to buttress his claim that simple supply-and-demand forces are at work:

"U.S. Treasury Secretary Henry Paulson, billionaire investor Warren Buffett and the oil-rich kingdom of Saudi Arabia all insist that free-market forces are at work [vis-à-vis oil prices]. They cite the Economics 101 concept of supply and demand as the main reason a barrel of oil has surged above $140, up nearly 50% in 2008.

"Phil Flynn, senior market analyst at Alaron Trading, sums up his thesis best: 'You can argue that the economic fundamentals for oil are as strong as they have ever been in mankind's history.' He cites robust demand from emerging economies around the world, a growing belief that future oil supplies will be tight, and the ability of foreigners to buy oil cheaply because of the steep drop in the value of the U.S. dollar."

I've now learned that MackT's referenced passage came from a recent USA Today article. Tain't nothing in that passage with which I disagree. Indeed, I've been saying basically the same time for the past, oh, 13 months.

Politicians - Democrats, mostly - can piss and moan about "big oil," "speculators," and President George W. Bush all they want, but they cannot change the fact -- the simple Economics 101 fact -- that the only way to bring down the price of oil is to increase supply. Period.

There are a few ways to increase the supply of oil on the world market: convince the OPEC cartel to increase production (ain't gonna happen); try to pretty-please China and India to throw cold water on their blistering economies (ain't gonna happen); or increase domestic production of oil.

There's only one presidential candidate who's advocating policies to increase the domestic production of oil ... and his name ain't B. Hussein Obama. If John McCain is smart, he will press, push, and shove the increase-supply-now up B. Hussein Obama's ass - from now until November. With all of the issues that are of concern to discerning voters these days, none hits closer to home than the high price of gas. If McCain plays his cards right, his "I have a plan," as opposed to B. Hussein's "I have a pipe dream" plan, could guarantee him at least a 48-month stay at 1600 Pennsylvania Avenue.

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