Posted by
Andrews on Monday, June 09, 2008 5:05:20 PM
Earlier this month I asked
why we trust lawyers so much with our future. Well, while
reading an article today I came upon this gem:
"I used to teach a little economics in college," Sen. Byron L. Dorgan,
North Dakota Democrat, speaks up. "I taught the supply and demand
intersection and what happens to price. I understand all that. If we
take a look at supply and demand, there is nothing that justifies what
is happening in the futures market with respect to oil prices."
So what's happening then?
"I will tell you what I think is happening," he says. "On the
oil commodity markets, we have a dramatic orgy of speculation and
carnival of greed."
So, the answer is "We trust lawyers because when we elect economists, they turn even more stupid than the lawyers."
I hate to disagree with Mr. Dorgan, but first, does he really think there is such a thing as a supply curve or demand curve? They exist, but they fluctuate with the millisecond, there is no single curve. And since there is no REAL curve, then how does he know there is no justification for the prices we are seeing?
Also, even if he is right and there is "an orgy of greed", wouldn't some of them be cashing out now? Assuming all of this is for speculative purposes, wouldn't those who bought in in the past be selling their futures, driving the price back down as they cash out? Or does he fail to understand how speculation works as well?
Sorry, but all the explanation for the "oil crisis" reveals nothing but a fondness for populist gibberish among our vote-greedy politicians.
And isn't it a bit disgusting to hear those who take over 1/3 of our income and use to buy votes and pad their own nests to talk about "orgies of greed"? The government makes nearly 10 times as much on oil as the oil company does, yet they lecture the oil companies on greed?
Respectfully, Mr. Dorgan, close your mouth before you make a fool of yourself.
ADDENDUM
I just noticed that Senator Dorgan specifically mentions the "
FUTURES market". And he is surprised to find speculation
IN THE FUTURES MARKET!
Those former students really should ask for their money back. A man who thinks he can tell if a price is "justified" and who is surprised that speculation takes place in the futures market really should be prevented from ever teaching economics again, much less holding public office.