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February 13, 2012
Binyamin Rose: Back to the Bunker: How a life-risking act by a Christian family during the Holocaust saved a family and built a thriving community a world away
Menachem Wecker: Business Schools Teach Real Estate Despite Troubled Housing Market
February 10, 2012
Lisa M. Krieger: Man with defibrillator demands access to his own heart's information
David G. Savage: Why activists may not be in a hurry to have High Court rule on alternative marriage
February 9, 2012
Laura McMullen: 10 Least Expensive Public Schools for Out-of-State Students
Kimberly Palmer: How to actually enjoy -- relaxing, financially -- your vacation
February 8, 2012
Warren Richey: Why momentous Prop. 8 ruling might not satisfy gay-rights groups
Menachem Wecker: Though Controversial, LL.M.'s Can Lead to Specialized Legal Jobs
The Kosher Gourmet byDana Velden: Going to the bother of making soup? You know it better be good. This CREAM OF TOMATO SOUP certainly is! And it's a cinch to make, too (Includes techinques and serving secrets)
February 7, 2012
Frank J. Gaffney, Jr.: Caught off-guard? President's Super Bowl interview with Matt Lauer gives those who need a reason not to vote for him, a darn good one
Suzanne Bohan: Leaping lizards! Tiny reptiles advancing robot design
February 6, 2012
Jonathan Tobin: Iran Threatens Israel With Destruction, But the New York Times Doesn't Hear It
Jeffrey Fleishman: In newly democratic Egypt, tens of democracy activists jailed, to stand trial; their groups are 'threatening the stability of the homeland'
Julie Deardorff : Researchers say antioxidants may not be that effective and could do more harm than good
Mark Clayton: How did Anonymous hackers eavesdrop on FBI and Scotland Yard?
February 3, 2012
Edmund Sanders : Israeli official says Iran is creating missile that could reach East Coast of US
Victoria Kim: Immigrant-smuggling ring used black drivers to avoid racial profiling
February 2, 2012
Jim Carney: Wrong number call may have saved her life
Reza Kahlili : Ex-CIA spy in Iran's Revolutionary Guard: What Obama doesn't grasp about striking deals with Tehran
Tina Susman: For woodchuck rescuer, every day is Groundhog Day
February 1, 2012
Brian Bennett: US officials see increasing threat of domestic attack from Iran
Emily Brandon: How to Take Advantage of New 401(k) Fee Disclosures
January 31, 2012
January 30, 2012
Paul Richter and Ramin Mostaghim: Misreading Teheran's limits -- deadly and economically devastating as they may be -- is a risk administration, Europe seem willing to take
Suzanne Bohan: Warning: Nap-deprived tots missing more than sleep, study finds
Meg Handley: Banks Revamping Rewards Programs to Woo Customers
January 27, 2012
Caroline B. Glick: Obama: Of course I intend to prevent a nuclear holocaust . . . in a few months
Yochonon Donn: In liberal New York City, fervently-Orthodox Jews may soon be getting a district to call their own
Jeannine Stein: An inflated ego and thinking you're 'all that' doesn't just make others sick of you, it can make you ill
Katy Hopkins: New budget rules may affect how much money you get for college
January 26, 2012
Ed Koch: To the New York Times, calling for the murder of Jews by those capable of having their incitement taken seriously isn't news
Jeannine Stein: Mental illness struck one in five U.S. adults in 2010: Report
January 25, 2012
Richard Simon: House passes two bills endorsing the use of religious symbols at military memorials
Fred Weir: Putin: Multiethnic Russia cannot survive as a US-style 'melting pot'; must find its own way
Susan Johnston: 5 Sneaky Coupon Strategies Consumers Should Watch Out For
January 24, 2012
Carol Clark: The price of your soul: How your brain decides whether to 'sell out'
Caroline B. Glick: America lost most in 'Arab Spring'. Sadly, many voters still don't grasp the extent
Warren Richey: Drug criminal scores win in GPS ruling from conservative-leaning high court
Erika Bolstad: Black conservatives gather to talk about gaining strength
January 23, 2012
Melissa Dribben: Jewish voters to play a key role in Florida's Republican primary
Jordan Rau: In quest to grow, Catholic hospital system will announce this morning its break from church
Ali Safi: U.S. envoy gives Taliban terms for peace talks
January 19, 2012
January 18, 2012
January 17, 2012
Frank J. Gaffney Jr.: No-kidding red lines: U.S. response to an Iranian nuke may be bluster, but Israel's won't be
David G. Savage: They sued their principals after slandering them online --- now the cases are headed to the Supreme Court
David Francis: Where to Invest in 2012: With stocks expected to rebound, opportunity abounds for investors
January 13, 2012
Ben Lynfield: Israeli lawmakers move to annex Jewish Judea, one museum at a time
Alexia Elejalde-Ruiz: Thriving through touch: Gentle massage helps older people with low mobility improve in mind and body
January 12, 2012
Warren Richey: Landmark Supreme Court ruling a 'resounding win' for religious groups
Warren Richey: Supreme Court says no to new rule on eyewitness testimony
John Fauber : Statins found to raise diabetes risk in postmenopausal women
Katy Hopkins : Consider This Before You Pay for an Online Degree
The Kosher Gourmet by Joseph Erdos: This mushroom and barley soup has an intense -- almost nutty -- flavor that mixes robust with Middle East. It has creaminess without cream
January 11, 2012
Shari Roan: Millions of atrial fibrillation sufferers at risk for devastating, but preventable, stroke
Tom Hussain: Pakistan -- recipient of more than $21 billion in civilian and military aid -- speeds pursuit of Iranian pipeline, defying US
David G. Savage: High court signals it won't be loosening TV's 'indecency' rules
Stephen Ceasar: Oklahoma's Islamic law amendment can't go into effect, court rules
January 10, 2012
Reza Kahlili: From an ex-CIA spy: US must exploit new split in Iran's Revolutionary Guard
Karen Kaplan: Study: Nicotine replacement products ineffective when used in real-life situations
January 9, 2012
Michael Doyle: Put through legal hell over dream home, couple fought back hard --- all the way to Supreme Court
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Jewish World Review
Sept. 18, 2007
/ 6 Tishrei 5768
Economics vs. politics
By
Paul Greenberg
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http://www.JewishWorldReview.com |
With gasoline prices now only medium outrageous, Gentle Reader may have forgotten how eager politicians were last year to find someone to blame when the pain at the pumps was off the charts.
The usual congressional investigation was hastily called, the usual outrage expressed, and the usual suspicions voiced with the usual lack of any economic effect. Then the political ritual was concluded, prices fell in the normal course of economic events, and few now ask whether there was anything to all that talk. It's a question worth asking as a lesson in politics and economics.
Mark Pryor, the junior senator from Arkansas, was one of those making roundhouse accusations back then. In search of the nearest scapegoat for high oil prices, he settled for the same old one: dastardly Big Oil. The senator was out to protect us, so he said, from "the greed and profiteering in the oil marketplace" not to mention economic literacy.
So what happened? Even though Sen. Pryor joined a number of his colleagues in trying to bully the Federal Trade Commission into cooking up some evidence to back up his conspiracy theory, all the FTC could do was reach the same conclusion it usually does: There was no substance to his charges.
Once again the bogeyman turns out to be nothing more sinister than the law of supply and demand. Sure enough, when supply dwindles and demand goes up, so do prices. Big surprise.
But every time gas prices go up, a certain kind of politician is shocked, shocked! Or at least pretends to be. And demands an investigation. Which is a lot easier than taking Economics 101 all over again.
Naturally the politician blames some vague, amorphous monster out there like Big Oil rather than the real-life owner-operator of your neighborhood filling station. After all, the little guy votes.
And it's too much trouble to think this thing through as Henry Hazlitt did in his dandy little primer, "Economics in One Lesson."
To quote Mr. Hazlitt, "we cannot hold the price of any commodity below its market level without in time bringing about two consequences. The first is to increase the demand for that commodity. Because the commodity is cheaper, people are both tempted to buy, and can afford to buy, more of it. The second consequence is to reduce the supply of that commodity. Because people buy more, the accumulated supply is more quickly taken from the shelves of merchants. But in addition to this, production of that commodity is discouraged…."
Gosh, just like gasoline last year.
If there's an avaricious cartel setting oil-and-gas prices, it's called OPEC. But oil sheikhs and Venezuelan caudillos are scarcely subject to a congressional investigating committee.
If there's a conspiracy at work here, it's the dismal science itself economics. It's been refuting demagogues ever since they've been taking advantage of our anger, suspicion and ignorance. Hey, somebody's got to be blamed when we're unhappy. Especially somebody rich and powerful. What better scapegoat than Big Oil?
The art and science of economics may never be as simple or dramatic as Mark Pryor's populist rhetoric. But the study of economics may have the great advantage of clarifying things rather than hopelessly muddling them. Attached as we all may be to our own favorite conspiracy theory, along comes an actual investigation, and it goes poof. Which is just what's happened, again, to Mark Pryor's.
To quote the latest report from the FTC's investigators, whose prose isn't exactly scintillating: "The 2006 price increases were caused by a confluence of factors reflecting the normal operation of the market."
Aw shucks. And just when we were getting the tar and feathers ready for those oil executives.
And what were the factors that drove gas prices higher last summer? Among them, greater demand for fuel by vacationers (another big surprise), the still lingering effects of hurricanes (Katrina and Rita) that shut down refineries along the Gulf Coast, reduced oil refining capacity as producers switched to ethanol, and, as you might have expected, greater demand for both crude oil and ethanol. What, no conspiracy? How boring.
Once again the FTC found no evidence that gas prices were being manipulated by some sinister cabal in this country's boardrooms. Despite Senator Pryor's demand for more government regulation of gas prices (shades of Jimmy Carter's long lines back in the '70s), the FTC couldn't come up with any facts to support him.
This isn't the first time a sleek conspiracy theory has run aground on the rocky shore of fact. To quote Joseph Simons, a former director of the FTC's Bureau of Competition: "The FTC has looked at the same phenomenon, which occurs almost every year, year after year, and they get the same result. Why people think it's going to come out any different the next time is unclear. It's a waste of taxpayers' money."
But it's not a waste of ambitious politicians' efforts. They get to posture before the cameras and demand ACTION! even if it's precisely the wrong kind.
The pols may be wrong again and again, year after year, but think of the advantages. They're able to strike while public anger is at its zenith, appease their louder and less thoughtful constituents, and they never have to say they're sorry by the time gas prices fall and the public's interest in the subject has waned. (Somehow they never get around to demanding a probe when gas prices go down.)
That's the way it is with wild accusations; the facts may never catch up. Or if they do, the story is relegated to the business section. Ho hum.
The price of gasoline may rise and fall and rise again, like that of any other commodity, but the market for demagoguery remains remarkably stable.
Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
JWR contributor Paul Greenberg, editorial page editor of the Arkansas Democrat-Gazette, has won the Pulitzer Prize for editorial writing. Send your comments by clicking here.
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© 2006 Tribune Media Services, Inc.
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