The House Energy & Commerce Committee held a hearing today on the subject of "boutique" fuels. Republicans are positively obsessed with this matter, convinced beyond sanity or reason that gasoline prices are high in large part because EPA is tolerating a large number of different gasoline blends around the country.
Ed Murphy, group director for downstream and industry operations at the American Petroleum Institute, gamely tried to introduce a bit of economic rationality into this debate. While there are certainly reasons to decry the proliferation of gasoline blends around the country, the recent run-up of gasoline prices has nothing to do with them. His testimony, however, apparently failed to impress Republicans according to the trade pub Greenwire.
Now, if EPA were making gasoline more expensive, I'm sure API would be the first bunch to say so. The fact that they are not speaks volumes. That is, it speaks volumes only to those interested in listening. Beating up on Greens is more important to the GOP than beating up on high prices. Having even a scintilla of evidence to back up their charges is apparently irrelevent.
Did you know that last year, Paris was a much more popular girls’ name than Britney? Or that Madison was the 3rd most popular girls’ name, while Jefferson was only ranked 628th among boys’ names? Or that 179 baby boys were actually named Baby?
More importantly, do you care about any of this? I sure don’t, but the government does.
As Senator Tom Coburn points out, the Social Security Administration, wastes significant time and money compiling this report on popular baby names.
Senator Coburn astutely jests, “Increasing one’s web traffic doesn’t seem to be in the Constitutional charter of the Social Security program. Your tax dollars hard at work, indeed.”
In a referendum, California voters have a rejected a scheme (Proposition 82) supported by the state teachers' union to impose a special 1.7 percent tax on high-income individuals to fund a government preschool program. A dangerous precedent could have been set here---that a government-dependent special interest could rabble-rouse a majority into the economic persecution of a minority for narrow gain. California voters soundly rejected the plan 59-41 in early returns.
Well, should we? An increasing number of Congressmen seem to think so. Last year, Sen. Mike DeWine (R-OH) introduced the “No Oil Producing and Exporting Cartels Act” (S. 555), aka "NOPEC," which would make oil-producing and exporting cartels abroad illegal. Although the bill went nowhere, supporters have tried repeatedly to attach it to energy legislation moving through the House and Senate. The idea was last spotted when Sen. Arlen Specter (R-PA) embraced elements of the bill in his relatively unhinged "Oil and Gas Antitrust Act of 2006” (S. 2557), and the trade press is full of reports that the next GOP energy bill might well include NOPEC in its legislative basket of economic buffoonery.
You might think that imposing U.S. antitrust law on foreign, state-owned companies that (with the exception of CITGO) operate nowhere near U.S. borders is such a crackpot idea that only an American politician could entertain such a thing with a straight face. You would be wrong. The other day, Ariel Cohen and William Schirano at the Heritage Foundation gave NOPEC an enthusiastic thumbs-up. "If Congress is serious about alleviating the price-gouging that contributes to high gas prices," they wrote, "it ought to begin by allowing the federal government to sue OPEC."
The temptation is to simply ignore nonsense like this. But nonsense like this (particularly on the energy front) is increasingly the coin of the legislative realm. So let's do what its proponents have obviously not done and give the idea a few moments of thought.
First, the obvious question arises---exactly how would the U.S. government enforce such a law? After all, I rather doubt that Saudi Arabia, Kuwait, Iran, Venezuela, et al will quickly disband the cartel in a panic once Uncle Sam deems their club illegal under U.S. law. "You and who's army?!" is the natural response we might expect. Given that no army would be on the way to stamp out such illegal activity, which leaves trade sanctions or nothing. The former would be counterproductive while the latter would be embarrassing.
Next, exactly what gives the Congress the right to impose U.S. economic regulations on companies that aren't doing business in the United States? Do all national governments have this right, or only the United States? If the former, what's to prevent Saudi Arabia from declaring it illegal for U.S. banks to charge interest on loans (an activity ostensibly banned in many Islamic countries)? If the latter, then it's a naked statement that U.S. policy is premised upon the idea that the biggest guy on the playground makes the rules for everyone else whether they like it or not---might makes right. And if so, then wouldn't those forced against their will to live under U.S. law rightly argue that subjects of governmental power ought to have a right to vote about the laws they are compelled to live under? Or is that a right that only applies for some and not others?
Finally, there's an economic principle of real importance at stake. To wit, who should have the final say over how much of a product or service is delivered by a commercial enterprise; the owners or the customers? If the latter, then companies are merely slaves of the state, dictated to produce as much as the public wants regardless of business considerations. Does the Heritage Foundation really want to plant their flag on that proposition?
One might argue that the state can prohibit price fixing and collusion without prohibiting companies from having the final say over their own production schedules absent coordination between firms. But there are a large number of oil economists who maintain that OPEC is not really a cartel at all---it's simply a vehicle through which Saudi Arabia unilaterally exercises power over the market---and that collusion within OPEC is not particularly meaningful. If so, then NOPEC would have little effect even if by some miracle it could be enforced.
Even so, what if OPEC countries preferred to constrain production so that sufficient reserves would be available down the road when they would presumably be more valuable? In that case, production restraint might simply be another form of national savings. Should the U.S. Congress be in the business of declaring such trade-offs between present and future revenues "illegal"?
Sure, it would be wonderful if private companies owned oil reserves, not national governments. And it would be nice from the consumers' point of view if those companies produced as many barrels of crude as a normal profit would allow. And it would be wonderful if OPEC disappeared tomorrow. But Congress' ability to translate those wishes into reality as far as foreign petroleum operations are concerned is probably nonexistent.
The best we can do is to refuse to help the Cartel or its members in the course of their enterprise. Sending the Texas Rangers or some such after them would render us an international joke.
Congratulations to California voters for keeping their preschools from becoming, well, like the rest of their schools.
Despite being the brainchild of famous director Rob Reiner, and having the support of many other Hollywood types, yesterday roughly 60 percent of California voters turned down Proposition 82, which would have provided “universal” (read: “government”) preschool for all state 4-year-olds.
In the past, such a touchy-feely proposal probably would have flown through the polls. But California voters might be wising up to the fact that “warm and fuzzy” doesn’t necessarily mean “good.” From the San Jose Mercury News:
Many San Jose area voters took their skepticism about the measure to the polls.
“Prop. 82 sounded really good, but the more I looked at it, the more I realized it was subject to shenanigans,” said David Yomtov, a San Jose resident who said he voted against it.
To read all about the political shenanigans and wheeling-and-dealing behind Proposition 82, check out the work of Lisa Snell at the Reason Public Policy Institute, who started fighting the good fight against Reiner’s initiative almost the moment it was introduced.
For those of us who tire of witnessing British Petroleum apologize for being in the oil business, or roll our eyes over Chevron PR campaigns dedicated to telling us how we can and should buy less of their product, it may seem that it was always thus. But it was not. Check out this 1956 short film produced by the American Petroleum Institute. Now THAT'S what a self-confident, take-no-guff industry looks like. Someone should tell "Big Oil" to take it's thumb out of it's mouth and start defending their right to exist.
The New York Times reports on a new production of Samuel Beckett's "Waiting for Godot" which "implies that that the mysterious, perpetually awaited Godot, often thought of as God, is actually the Federal Emergency Management Agency."
Which makes sense, since too many people in the theater and allied worlds think that the federal government is God.