A Liberal Economist Crashes on the Rocky Shoals of Reality
Everyone needs to read Paul Krugman once in a while, if for no other reason than to make you feel better about your own intellect.
Don’t be dismayed by Krugman’s shrill tone and vacuous logic, just laugh along and remember this lesson: man is the only creature who can lie to himself.
Krugman has a column called Natural Born Drilllers and yes, reading it will make you feel better about yourself. In fact, it makes one wonder: if a man like Krugman can win a Nobel Prize in Economics, how bad were that year’s non-winners? What a terrifying thought…
Today Krugman tells us “…U.S. energy policy has very little effect either on oil prices or on overall U.S. employment.”
Of course, the statement is self-evidently absurd. Don’t believe me? Well, shuffle the statement around, and make it read like this: Saudi Arabian energy policy has very little effect either on oil prices or on overall Saudi employment. Is it absurd yet?
Or maybe broaden it even more: nowhere on earth do energy policies have much effect on either oil prices or on overall employment.
Paul, consider my alternate hypothesis: our energy policy massively effects oil prices, and ergo, overall U.S. employment. How so, you ask?
Because all other things being equal, $2 a gallon gas is likely to leave a household (that drives 20,000 miles a year in a vehicle that averages 20 mpg) an extra $2000 in disposable income versus $4 a gallon gas. Most households are going to spend at least a bit of that $2000 and spending creates a need for workers. People working, Paul, effects unemployment.
Krugman is merely attempting to carry the water for the Administration on this topic. Charles Krauthammer, as an alternative, offers this:
“The American people aren’t stupid,” said Obama on February 23, mocking “Drill, baby, drill.” The “only solution,” he averred in yet another major energy speech last week, is that “we start using less, that lowers the demand, prices come down.” Yet five paragraphs later he claimed that regardless of “how much oil we produce at home . . . that’s not going to set the price of gas worldwide.”
So: Decreasing U.S. demand will lower oil prices, but increasing U.S. supply will not? This is ridiculous. Either both do or neither does. Does Obama read his own speeches?
I think the President reads them; I mean he reads them to us at least. The problem is with his reading comprehension.
While the President can’t control oil prices, he can influence them. And he has.