What Fresh Hell Is This?

October 31, 2005

Colin McNickle Spanks Melissa Hart!

Metaphorically, of course.

She should be watching her right flank if he indeed speaks for a large number of conservative Pennsylvanians. In a recent column at The Trib he's more than patronizing to (or is it condescending to? I could never keep those straight) Representative Hart. Here the lesson is in full:
U.S. Rep. Melissa Hart, R-Pa., generally isn't considered to be a liberal. But she sure does a convincing impression of a pandering progressive when the topic turns to economics, particularly the economics of natural gas prices.

Tuesday last, Ms. Hart urged the House Agriculture Committee "to investigate what actions the Congress may take to ensure that Americans are not subjected to unwarranted volatility and price gouging in the natural gas market."

Particular attention must be paid to "excessive speculation" and the role futures trading plays to "artificially raise prices" and cause "unwarranted changes," she said, adding that "unpredictable (price) swings hit hardest on those that can least afford it, such as farmers, seniors and American businesses."

Indeed, this winter's heating bills will be no bargain for most Americans. Some could pay upwards of 70 percent more than last year.

But Hart is allowing her altruistic side to cloud her commonsense instincts. And if that's not the case, well then it's just fundamental ignorance.

As my buddy Don Boudreaux, chairman of the Nobel Prize-holding economics department at George Mason University in Fairfax, Va., put it, "Ms. Hart is way off base."

Courtesy of Mr. Boudreaux, a tutorial for Missy:

  • "Prices reflect underlying conditions of supply and demand."

  • "The reason the prices of gasoline and natural gas have risen so dramatically lately are not mysterious: hurricanes and more than usual uncertainty in the Middle East."

  • "That these prices are variable is also no mystery. Uncertainty waxes and wanes with more frequency than does, say, actual supply capacity."

  • "(W)hen uncertainty becomes a larger part of the price of a commodity, the price of that commodity fluctuates more than it does when conditions of relative certainty and security prevail."

  • "The fact that prices fluctuate means that they go up and down -- the latter movement being powerful evidence against suspicions that energy companies are monopolistic."

  • "As for speculation, it actually smooths out prices over time. Speculators who anticipate the price of, say, oil to rise will buy oil today (raising today's price higher than it would be) and sell oil tomorrow (lowering tomorrow's price lower than it would be). Vice-versa for speculators who expect the price of oil to fall."

  • "Without such speculation, prices through time would be more, not less, variable."

  • Congresswoman Hart needs to study the matter a little better before her next press release. Better yet, she needs to sit down with Professor Boudreaux. And I'd be glad to make the connection.
    Far be it from me to get between a conservative member of Congress and a conservative blowhard at The Trib, but it IS fun to watch, isn't it?

    By the way, Mr McNickle does another bit of rhetorical distortion when he writes elsewhere in the piece:
    Collectivism is so ingrained into liberalism's psyche that apologists probably don't even realize how easily and automatically they invoke it. Take, for example, the recent editorial in The New York Times that calls on the federal government to "capitalize on the end of the era of perpetually cheap gas."

    Never mind that gas prices right now are, adjusted for inflation, still about what they were 25 years ago.
    Now I'm not going to venture into the Little Red Book of the wingnut slogans such as "Collectivism is so ingrained into liberalism's psyche..." but I do want to point out something about the last sentence. Mr McNickle grumbles about how pas prices are "still about what they were 25 years ago" when adjusted for inflation.

    This is almost true. Take a look at this chart. 25 years ago was 1980. According to the chart (which takes its data from the Government) the record high (again, adjusted for inflation) was in 1981. A minor point, but when a smug columnist is condescendingly lecturing a member of Congress on the economics of rising gas prices, he should have all his facts straight - even the minor ones. Making such a stupid mistake makes him look, well, stupid.

    Back to the gas prices. After the record high of 1981, prices dropped more or less continually for the next five years or so. If I am reading the chart correctly, they remained basically steady for the next decade and a half. There was a spike upward during the Bush-41 recession and a downward trend during the second Clinton administration, but all-in-all things were relatively steady.

    However, after a "downward spike" during the second Bush-43 recession (hey, anyone else think it interesting that the past three recessions occurred during Republican administrations??), gas prices have risen to their current 20 year high. Take a look at McNickle's statement again:
    Never mind that gas prices right now are, adjusted for inflation, still about what they were 25 years ago.
    Gee, d'ya think some members of McNickle's audience read that gas prices have been steady for the last 25 years? The prose is murky enough to assume so.

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    1 comment:

    Tony said...

    Excellent piece, Dayvoe. Maybe bloggers really are the new columnists.