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Death by Committee

April 22, 2011

I was talking to a colleague the other day, and he commented on his participation in three different groups that were essentially trying to do the same task.  I said back that this likely meant that the organization had not intent to actually solve the problem, since it had no desire to frame the discussion in a way that one team could solve it.  Too bad I didn’t cite the government as an example. From the AP:

President Barack Obama said Thursday that the Justice Department will try to “root out” cases of fraud or manipulation in oil markets, even as Attorney General Eric Holder suggested a variety of legal reasons may be behind gasoline’s surge to $4 a gallon.

Gas is almost $4 a gallon because people are still buying it.

The task force will focus some of its investigation on “the role of traders and speculators” in the oil-price surge Obama said. The group will include several Cabinet department officials, federal regulators and the National Association of Attorneys General.

Ah, here we go.  Let’s go find an evil speculator to blame.  Look at what I just said.  Gas is almost $4 a gallon because people are buying it.  That also includes the speculation markets.  The people buying oil at the current rate are assuming it’s going to go higher.  If they thought it was going to go lower, they wouldn’t buy it.  Or if they did, they wouldn’t be employed as oil buyers for long.

Here’s a couple gems:

There’s not much Obama can do to affect the price of gasoline in short term, something he acknowledged in his remarks. Gas prices have risen steadily as a result of tensions in the Middle East and northern Africa and rising demand from China and other emerging economies.

Given that no evidence has yet surfaced of actual fraud or price manipulation in oil markets, Obama’s remarks appeared, at least in part, as more of an attempt to assuage public anger over rising gas prices.

Oh, sorry, people are buying oil, so the price is going to go up, mostly since there’s no significant increase in supply.  Oh, and there’s nothing wrong with that, so this is truly just a witch hunt.

My point is, a taskforce to hunt for evil people that don’t exist isn’t going to do much other than waste time, and it certainly won’t actually solve a problem.  Ed Morrissey notes that many people have already said that:

Sounds like the White House thinks the problem centers on waste, fraud, and abuse.  Perhaps President Obama should heed the words of a Beltway insider who warned Americans that this kind of talk was usually hooey, just a dodge to avoid facing the tough choices in front of us.  In fact, here’s a quote:

“… [P]oliticians are often eager to feed the impression that solving the problem is just a matter of eliminating waste and abuse – you’ll hear that phrase a lot. “We just need to eliminate waste and abuse!””

Who said that?  Why, none other than … Barack Obama.  Nine days ago.

Ah, so in the timeline of political bullpuckey, we’ve got a local record…

So forming another taskforce to pick on this problem is just an admission that you don’t want to solve the problem.  Thanks to the administration for making that clear.

Want to see how committes work, by the way?

7 Comments leave one →
  1. April 25, 2011 8:03 am

    Country Thinker is correct. The increase is a lot higher this time in comparison to barrel price, and that’s mostly due to inventories. Some of that is lack of processing here, but some of that seems to be that we ceased to actually build the inventories in the supply. So when it was lower, we didn’t save for a rainy day… probably because we were too busy spending it somewhere else.

  2. April 24, 2011 7:08 pm

    Three thoughts:

    1) Gasoline inventories are low, which explains why gasoline has reached $4.00/gallon with crude at $100/barrel, instead of $147/barrel like 2008. I do not know why inventories are low.

    2) Speculators push prices down as well as up. I read a piece in The Economist that reviewed at least three major studies on the effect of speculation on commodoties markets, and they all concluded that speculation contributed slightly to volatility, but di not create an upward pressure in prices. It is a red herring perpetuated to justify government “oversight” of speculative behavior.

    3) When Obama sees economic activity, he assumes wrongdoing.

  3. April 22, 2011 11:40 am

    To restate your comment:

    When leftists see capital flow
    They’d control every place it would go
    For though wealth is created
    Still the left seems to hate it
    And to private exchange they say “No!”

    ===|==============/ Level Head

  4. April 22, 2011 10:12 am

    I was listening to the local Communist/Progressive radio station, and they made the same sort of misstatements that Obama is making. They don’t realize that the futures market is NOT like the stock market.

    The futures market consists of exactly 50% hoping the price will rise, and 50% hoping it will fall. Every contract is made from those two sides — and no contract can be formed unless two people agree on a price, with each hoping for an opposite direction. Prices move because the market indicates that it must go up or down before two people can reach opposite conclusions about the exact same price. There is never an imbalance here.

    If you eliminate the futures market, you destroy the ability for producers and buyers to hedge future prices. Producers (farmers, for example) are concerned prices will go down, consumers (like food makers) are concerned it will go up. So both use the market to hedge, and speculators go along for the ride and create a very efficient, liquid market.

    Obama — and communists and progressives in general — seem not to understand it, and at the same time envy the flows of money through this system and want to control it.

    ===|==============/ Level Head

    • April 22, 2011 10:37 am

      I know this is a generic comment, and probalby has some exceptions… but when money changes hands and the government is not involved: Conservaties applaud, and Liberals complain.

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