Friday, May 20, 2011

Do Senators Understand Markets?

Maria Cantwell, D-OR, one of the Senatorial Interrogators during Big Oil's recent appearance on the Hill, demanded to know what the price of the next marginal produced barrel of oil "should be". Exxon's CEO Rex Tillerson replied between $60-$70. Ms. Cantwell deduced that given the price of oil is around $100 per barrel, this disparity demonstrated the immoral gouging by "speculators". We presume that the good senator can determine who is a "legitmate" bidder for that barrel of oil and who is not.

Perhaps one day Ms. Cantwell can ask Steve Jobs what price the next marginal produced 16 GB IPad "should be". It could be as low as $260, but it actually retails at $499. This is nearly a 100% markup.

Mark Perry has made a similar arguement, summarized at his excellent blog Carpe Diem.

Monday, May 16, 2011

Socialism with a Democrat Face.

Here's a snippet of the Kudlow interview with Nancy Pelosi on CNBC today. They're discussing the Dem's desire to revoke Big Oil's tax deductions:

Kudlow: They’re deductions are the same as all the manufacturing companies.

Rep. Pelosi: So why do they need — yeah, they shouldn’t be. They shouldn’t be.

Kudlow: Why not?

Rep. Pelosi: Because manufacturing, you’re making something in America. They are — this was, shall we say, a special case for the oil companies to say we are actually not manufacturing companies, we wanted to be treated like that and that’s one to have things we want to reverse.

We are not big fans of corporate tax breaks that skew business decisions. But clearly Pelosi believes the tax code should be used as a shock collar on American industries. Expect the Dems to release their Five Year Plan soon.

Sunday, May 15, 2011

Krugman: The New Deal and Great Society Worth Blowing It All Up.

In a panel discussion on ABC's "This Week", Paul Krugman suggested that the Left go to the wall to defend the Welfare State by risking default on Government debt. Retiring FDIC chair Shelia Bair was alarmed at this proposal. Silly Shelia, he's a Nobel Prize Winning Economist! Krugman knows best!