Thursday, November 01, 2007

Riding an Oil Slick 362 Points Down

The seductive lure of a command economy is the illusion that something useful is accomplished by administrative tinkering with price. I’m sure the central government in China went to sleep tonight believing they successfully addressed a problem troubling the country.

China, Others in Asia Raise Gasoline Prices: China has increased gasoline and diesel prices for the first time in more than a year, as shortages disrupt transportation in the south of the country. … In southern China, long lines have formed at gas stations because of gasoline and diesel shortages. Some stations have had to shut down after certain oil refiners suspended operations due to rising crude oil costs.

The reality is that supply and demand establishes actual prices and government interference only distorts the market in occasionally unbeneficial ways. This is not so say that everything is that everything is warm and snugly with the energy economy. Exxon Mobil helps trigger a massive sell off in the stock market with a profit miss.

Exxon Mobil's quarterly net falls 10%: Exxon Mobil Corp.'s third-quarter profit fell 10%, its biggest year-over-year decline in three years, as the rising cost of crude-oil needed to supply its vast refining business outpaced the price the petroleum giant could fetch for its finished products.

The socialists in the Democratic Party can believe “Big Oil” makes profit on demand but it ain’t true. There is a big difference between accumulating money via free exchange transactions and raising money by legal demand. The decision to move American toward either a healthier trade economy or an increasingly take and distribute economy is at the heart of all the politics this coming year. The Republicans at Red State are advocating a platform of positions they hope will capture the majority of voters in the elections a year from now. The energy “plank”, however, is simply retarded.

Reagan 21: Be a Part of It: Energy: America must become Energy Independent to secure our nation and our economic future. Our policy initiatives include tax incentives for conservation and innovation in alternative fuel technology, environmentally responsible increase in domestic oil production, reducing cumbersome regulations, eliminating boutique fuels and building more refineries.

What bloody rot. “Energy Independence” is the Democratic goal. They want this precisely because it insures a perpetual shortage which they can exploit for increasing government control over society. They want America in a position where a summer drought creates biofuel shortages so they can step in and save the day by setting price by fiat. What America needs is an energy policy that declares all the resources of the planet should be available for those willing to purchase them. The idea that America needs to be independent of the big bad scary world just strikes me as absurd.