Friday’s Mini-Report

June 27, 2008

Today’s edition of quick hits.

* It was largely symbolic, but I guess they won’t be able to send engineers back in after inspectors are gone: “In a gesture demonstrating its commitment to halt its nuclear weapons program, North Korea blew up the most prominent symbol of its plutonium production Friday.”

* The flooding crisis in the Midwest is far from over: “Defiant residents of this eastern Missouri community lost one struggle against the relentless Mississippi River Friday, but quickly prepared for another.”

* Conditions in Afghanistan continue to worsen: “A roadside bomb killed three service members and a local-national interpreter in a coalition convoy in eastern Afghanistan, the U.S.-led coalition said. With the deaths, the number of foreign forces in Afghanistan killed in June has reached 39, the highest monthly toll of the war, according to a CNN count of official figures.”

* On a related note: “The Taliban has regrouped after its initial fall from power in Afghanistan and the pace of its attacks is likely to increase this year, according to a Pentagon report that offers a dim view of progress in the nearly seven-year-old war.”

* I don’t know the details of the deal yet, but there’s movement in the Senate: “Dozens of President Bush’s nominees cleared the Senate Friday after a breakthrough in negotiations between Senate Majority Leader Harry Reid (D-Nev.) and the White House. The Senate also moved to prevent Bush from using his constitutional authority to avert the Senate-confirmation process and make appointments to the Executive and Judicial branches during extended congressional recesses.”

* Nelson Mandela can finally travel to the United States again. It’s about damn time.

* I will never really understand the far-right worldview: “President Bush’s efforts to broaden a widely respected, bipartisan program to fight the spread of AIDS in Africa have faced roadblocks by seven Republican senators. Bush had hoped that Congress would pass legislation to spend $50 billion to fight AIDS, malaria and tuberculosis primarily in Africa in time for the Group of Eight summit in Japan next month. However, the seven socially conservative senators, led by Sen. Tom Coburn, R-Okla., refuse to support the legislation unless spending focuses more heavily on treatment than on prevention.” One of the seven concerned about investing too heavily in preventing a sexually transmitted disease is Sen. David Vitter (R-La.), best known for his role in a prostitution scandal.

* You’ve all heard about the dispute between Glenn Greenwald and Keith Olbermann, right? It’s a doozy.

* Arnold Schwarzenegger apparently isn’t impressed with McCain’s energy policy: “Politicians have been throwing around all kinds of ideas in response to the skyrocketing energy prices, from the rethinking of nuclear power to pushing biofuels and more renewables and ending the ban on offshore drilling, it goes on and on the list,” Schwarzenegger said. But, anyone who tells you this will lower our gas prices anytime soon is blowing smoke.”

* Lieberman doesn’t care for “Lieberman Must Go.” What a surprise.

* It’s true, on top of being wrong, and having rationalized possible war crimes, David Addington is also a remarkably unpleasant individual.

* As a long-time reader of The American Prospect, I’m delighted that Mark Schmitt will soon take over as the magazine’s editor. Schmitt is as clever and insightful a political observer as anyone in the country.

* You know, Democrats really did warn Nevada voters that Jim Gibbons would be a humiliating governor. All the evidence was there. I hate to say, “I told you so,” but….

* Too funny: “The Division of Motor Vehicles in North Carolina issued 10,000 license plates that began with WTF before someone spoiled the fun by complaining.”

* I’m genuinely surprised how many far-right Republicans continue to repeat the lie about China drilling for oil in Cuban waters, well after the bogus claim has been debunked.

* Bob Barr may have been instrumental in impeaching Bill Clinton, but he now concedes that George W. Bush is much worse.

* I’ve seen people on both sides of the aisle blame speculators for oil prices. Paul Krugman sets the record straight.

* And finally, I thought this story was hysterical. Barack Obama went to a gym in DC this morning for a quick workout. Takehia Wheeler was manning the front desk, scanning members’ ID cards, when Obama (and presumably his Secret Service detail) came in. “He came in and walked past me,” Wheeler said. “I was like, ‘Sir, you need to come back.’ ” Wheeler said Obama looked familiar, but she didn’t recognize him. So she asked for his ID card. “I said, ‘What’s your last name?’ He said ‘Obama,’ ” Wheeler explained. “I said, ‘So what’s your first name?” Eventually, she realized who he was.

Anything to add? Consider this an end-of-the-day open thread.

GOP reps. advised to avoid party brand

“Candidates have to have a positive alternative vis-à-vis their Democratic opponents.”

Note how the Republicans don’t use the “Democrat” epithet in their internal memos.

http://www.politico.com/news/stories/0608/11402.html

  • I’m genuinely surprised how many far-right Republicans continue to repeat the lie about China drilling for oil in Cuban waters, well after the bogus claim has been debunked.

    Actually, the reason for the confusion is pretty straightforward:

    – Everything Dick Cheney says is a lie.
    – Dick Cheney said China is not drilling for oil in Cuban waters.

    Therefore . . .

  • McCain has an RSS feed that is as inane as his campaign. It’s called A BlogYou Can Believe in and features such fierce attacks as:

    The Democrats’ New Patriotism

    The Atlanta Journal-Constitution reports:

    As part of the effort to make the 2008 national convention the greenest ever, the Democrats’ catering guidelines include one that strikes at the heart of Southern cuisine: No fried food.

    No fried chicken. No fried catfish. No fried green tomatoes. No fried okra. No fried anything.

    The Democratic guidelines say every meal should be nutritious and include “at least three of the following colors: red, green, yellow, purple/blue and white.”

    “It’s the new patriotism,” says Denver Mayor John Hickenlooper, the driving force behind the greening of the Democratic convention.

    Just don’t question their patriotism!
    http://tinyurl.com/66t9y9

  • Re: Addington… if an average person acted like that in court, the judge would have slapped him with contempt of court. Why do these guys get away with EVERYTHING?!?!

  • President Bush’s efforts to broaden a widely respected, bipartisan program to fight the spread of AIDS in Africa have faced roadblocks by seven Republican senators.

    I dislike Bush as much as the next guy, but even I have to give him credit for continuing to fight to put real money behind efforts to combat AIDs in Africa and SE Asia. Now if he could just get the rest of his idiot party on board.

  • @Rowdy Why do these guys get away with EVERYTHING?!?!

    Because Peliosi and Ried took impeachment off the table. Congress is just a toothless tiger at this point.

  • I say we celebrate the SCOTUS ruling that we can all have a gun by lining Addington and Woo up against the nearest wall and taking turns shooting them in their tiny genitals. That’s not torture, is it Davey? Huh, Johnny? Speak up – it’s hard to hear you when you’re writhing on the floor in pain. Wimps.

  • Olbermann has my admiration on many fronts — he’s smart, courageous, passionate, hates liars and can turn a phrase — but Greenwald is all that and also right on facts. Given that Olbermann spends a lot of time nailing people who don’t do their homework, it was almost hilarious to read in his DailyKos defense that he had not even read GG’s entire post. His attacks were absurdly snide and personal, and the idea that Obama has a “secret plan” to somehow get the telecoms is not only silly but sidesteps the vital issue of the Fourth Amendment. It is hard to be famous and so rich, and still remain one of the good guys, but I believe Keith’s heart is good and he can do this: Take a deep breath, read the whole thing, rethink, review the videos of Dean and Markos, think again and produce one of his magnificent mea culpas and get past this. Nobody as far as I’ve seen wins against the indefatigable, invaluable GG: he’s got the goods. Really, these guys ought to be colleagues, not competitors.

  • Paul Krugman: ….,iron ore isn’t traded on a global exchange; its price is set in direct deals between producers and consumers. So there’s no easy way to speculate on ore prices. Yet the price of iron ore, like that of oil, has surged over the past year. In particular, the price Chinese steel makers pay to Australian mines has just jumped 96 percent. This suggests that growing demand from emerging economies, not speculation, is the real story behind rising prices of raw materials, oil included.

    Krugman admits that he doesn’t know the impact that speculation has on the price of oil, but he dismisses the significance of it in his editorial entirely based on his “iron ore” theory above. I fail to see the logic in Krugman’s argument here. The price of one commodity has gone up dramatically because of demand, so the price of another commodity must have gone up for the same reason?

    Those arguing that speculation is causing the rapid rise in oil prices of late have much stronger arguments to support their theories than the counter-argument that Krugman present’s here (sorry CB). Either way, we need to add transparency to the process so we don’t have to “speculate”. Ha.

  • I do have to say, though, that just being Barack Obama doesn’t necessarily give you the right to waltz into any gym in the country. While it’s amusing that the clerk didn’t recognize him, it still seems that he should have stopped and presented his credentials demonstrating he was entitled to work out there.

  • Chris (10)The price of one commodity has gone up dramatically because of demand, so the price of another commodity must have gone up for the same reason?

    Thank you. I was afraid it was because he doesn’t like Obama that I have started to like Krugman far less lately, but as I read his piece this morning, I was wondering how does a commodities market not drive prices when the supply is managed and the demand is quite predictable? I do, however, think the dollar fluctuation has every bit if not more to do with the gas prices as the commodity market. OPEC may be using the dollar as their measure, but they don’t feel compelled to suffer from its weakness.

  • The semi-weekly comic strip Bad Reporter by Don Asmussen in the San Francisco Chronicle is pretty funny today. One of the panels features a dig at one of the GOP’s anti-Obama memes: “Leaked pic of Obama exposes arrogant ‘World’s Greatest Dad’ coffee mug”

  • Danp,

    Krugman does seem to have it out for Obama.

    In fact, I think we’re all correct. The rising price of oil has to do with the increase in worldwide demand, the falling dollar and speculation. However, I watched several industry analysts and CEOs of companies affected by oil prices (airlines, trucking, home heating oil) testify unanimously to the House Energy and Commerce committee that they believe the largest factor is, by far, speculation. In fact, one analyst put a number on it: 85 to 90 percent speculation, 10 to 15 percent the fall of the dollar. The all agreed that, based on supply and demand, a barrel of oil should be at about $65.

  • CB: Nelson Mandela can finally travel to the United States again. It’s about damn time.

    Yep. One of the more embarrassing examples of recent American history. Mandela was united with Castro to end apartheid. How dare he? That’s was a serious no-no. First Castro gave the ANC aid in the form of doctors. Then he helped train their forces. We had to fuck Nelson big time for that. Esp. given that Reagan and Bushit #1 were supporting South Africa’s evil regime. As usual, the conservatives were on the wrong side of history. Worshiping money more than human freedom…

    The following passages are from Cuba and the United States (A chronological history) by Jane Franklin:

    May 24-28, 1976:

    Havana hosts the International Seminar on the Eradication of Apartheid and in Support of the Struggle for Liberation in South Africa, sponsored by the UN Special Committee against Apartheid.

    June 28 1990:

    Tens of thousands attend an antiapartheid rally for ANC leader Nelson Mandela in Miami, but local officials retaliate for his praise of Cuba by refusing to give him the key to the city, leading to a Black-led tourism boycott of Dade County. Some anti-Mandela demonstrators carry placards with a picture of Jonas Savimbi, head of UNITA, as their choice in Africa.

    July 26, 1991:

    ANC Leader Nelson Mandela gives a speech at Cuba’s annual celebration of the Moncada attack. He says the world should maintain economic sanctions against South Africa. President Bush removed most U.S. sanctions July 10. Again praising Cubans for the victory at Cuito Cuanavale in Angola in 1988, Mandela says that historic victory game Angola the possibility of peace; enabled Namibia to achieve independence; destroyed the myth of the invincibility of South Africa’s apartheid regime; and created the conditions that led to his own release from prison.

    May 10, 1994:

    At the presidential inauguration in South Africa of Nelson Mandela, President Castro is the only foreign dignitary to receive a tumultuous welcome from the crowd. The two countries’ foreign ministers, Robert Robaina and Alfred Nzo, use the occasion to formally establish diplomatic relations.

  • “And finally, I thought this story was hysterical. Barack Obama went to a gym in DC this morning for a quick workout. Takehia Wheeler was manning the front desk, scanning members’ ID cards, when Obama (and presumably his Secret Service detail) came in. “He came in and walked past me,” Wheeler said. “I was like, ‘Sir, you need to come back.’ ” Wheeler said Obama looked familiar, but she didn’t recognize him. So she asked for his ID card. “I said, ‘What’s your last name?’ He said ‘Obama,’ ” Wheeler explained. “I said, ‘So what’s your first name?” Eventually, she realized who he was.”

    Why is this funny? Are you laughing at the desk person or at Obama for not checking in? Seems a bit arrogant to think that you don’t have to sign in like everyone else, but I wouldn’t call that funny. Seems a bit arrogant to laugh at a poor desk person trying to do her job.

  • Regarding the FISA thing, as I see it the REAL problem is the Patriot Act because it broke down the wall between warrants for intelligence purposes and the civil courts. Reinstating FISA is one step in restoring our 4th Ammendment rights. The second step will be taking OUT provisions of the Patriot Act that allow FISA warrants to be used in civil court.

    Besides, there is nothing in the compromise FISA bill that prevents CRIMINAL charges being filed.

  • Yes Mary,

    Steve was suggesting it was funny because he enjoys reveling in the abject humiliation and ridicule of the working class just like we all do. It couldn’t have been that it was funny because the situation was unlikely and mildly embarrassing for both of them. Will you at least try to get a grip on yourself for goodness sake?

  • Chris & Danp

    Krugman raises the rapid increase in the price of iron ore not as evidence that that there is no speculation in the oil market, but as evidence against the claim that a rapid rise in a commodity price is evidence for speculation.

    Krugman, after noting that the classic signs of speculation are missing in the oil markets-if you’ve been reading his blog you’d know, for example, that oil futures are below the spot market price-he notes a second line of reasoning which leads to the conclusion that speculation is driving oil prices.

    What about those who argue that speculative excess is the only way to explain the speed with which oil prices have risen? Well, I have two words for them: iron ore.

    You can’t speculate on iron ore, hence speculation can’t drive its price. Therefore the rapid rise in the price of iron ore is counter example to the claim that a rapid rise in the price of a commodity implies speculation in that commodity market.

    His argument against speculation as an explanation of the surge in oil prices is simply that there is no compelling evidence of it.

  • Krugman’s reasoning is fallacious.

    Hypothetical statement: If there is speculation in oil then prices rise.

    Observe that prices rise. You cannot conclude that the reason is speculation because the rise can occur for other reasons (as the iron example shows). That is the fallacy of affirming the consequent.

    Observe that there is no speculation. You can neither conclude that prices do not rise nor that prices do rise. That is the fallacy of denying the antecedent.

    The example of iron is uninformative, logically speaking.

  • To test the hypothetical, you need to disconfirm the consequent. You need to show that speculation exists but oil prices do not go up. In that case, the statement would be false. Since that is not the situation, the iron example is meaningless with respect to the truth value of whether speculation is affecting oil prices. You can leave the word “oil” out of the example above and it changes nothing about the logic.

  • Chris (#10): I suggest you go over and read “How the World Works” at Salon.

    Right now in China, there are more middle class Chinese – wanting the middle class 1st world lifestyle they have seen – than there are Americans in total – rich, middle, poor. Add in India, and the “speculators” you are worryingabout are a bunch if Indians and Chinese who outnumber us 2:1 and that’s just their middle class.

    Americans need to get over the idea we are the center of the universe.

    It’s not the speculators – it’s you with your oversized ugly SUV and your oversized ugly McMansion.

  • Re funding to fight AIDS, STDs, malaria, etc in Africa, isn’t that DOCTOR Senator Tom Coburn who is opposed to funding prevention??????

    What a disgrace to the nation.

  • Chris said: However, I watched several industry analysts and CEOs of companies affected by oil prices (airlines, trucking, home heating oil) testify unanimously to the House Energy and Commerce committee that they believe the largest factor is, by far, speculation. In fact, one analyst put a number on it: 85 to 90 percent speculation, 10 to 15 percent the fall of the dollar. The all agreed that, based on supply and demand, a barrel of oil should be at about $65.

    Ah yes, let’s believe the CEOs who have crashed the airlines, wrecked the trucks, burned the oil, and generally proven that MBA means More Bonehaded Assholes.

    These are the guys who made the problems!

  • Better MaryDingbat please. Your lack of frontal lobes and opposable thumbs is too obvious. This must be another Insane Fake Marytroll, even more pathetically stupid than the original.

  • I think it’s likely that North Korea’s blowing up its facilities was not symbolic at all — it was so that no one could go in and determine their technological sophistication and the extent of progress they had made before dismantling their program.

    I’m not sure why people are attributing this to diplomacy and are happy about it. The US gave North Korea everything it has wanted for decades — removal of sanctions — and in return they dismantled a program that was making little progress, based on their recent tests, and eliminated the possibility of inspections. Typical Bush negotiations — refuse to talk until things get intolerable, then cave and give them everything they ask for, and call it progress. No skill there.

  • Tom, just admit you don’t know what I was talking about. No one expects someone like you to have learned anything about propositional logic in high school.

  • There is little doubt that speculation and the declining dollar have an affect on oil prices (and I’d argue the declining dollar has the larger affect). The quesiton is how much.

    I agree to an extent with Krugman, the effect of both of those is not the 35-50 percent that many seem to be arguing (ie oil should be $65-70 a barrel). I’d place the affect at closer to 10-15 percent (still too high).

    Production of oil has peaked or is declining in several oil producing countries (Mexio for one), demand is rising sharply around the world and new production has not kept pace (and indeed can not, but that’s another discussion). And the fact is ALL commodities have been experiencing a sharp increase over the past 2-3 years (anybody want to talk copper). Krugman picked iron as an example because its not directly affected by speculation the way other commodities are and yet its prices have risen in the same manner as the others.

    If anything, oil has been late to the party on the commodities boom.

    That being said, better regulation of the futures market and shoring up our finacial house to get the dollar back will help. Not as much as people want (the days of below $100 a barrel oil may be behind us) but it will help a little.

    But the best mid to long term solution remains finding a way to weem us off oil. And that’s going to require some sacrafice from ALL of us.

  • “In a gesture demonstrating its commitment to halt its nuclear weapons program, North Korea blew up the most prominent symbol of its plutonium production Friday.” — CB

    Probably, the program wasn’t as far advanced as they’d have us believe; better destroy it, than lose face. And, if you can get “brownie points” for demonstrating goodwill, that’s extra.

    Seems a bit arrogant to think that you don’t have to sign in like everyone else, but I wouldn’t call that funny. — Mary, @19

    But it *is* funny, in the “how are the mighty fallen”, in the “taken down a peg” way. It’s funny in the same way as someone who thinks he’s a big fish yells “do you know who I am?” and gets “no” in response (happened to me; the man puffing himself up was the Minister of Education in Poland, I was an intern-teacher for a semester, in a highschool. How was I supposed to know who he was? Why should I have cared?)

    Out of curiosity… Do you find *anything* funny? If you do, what? Slip-up on a banana peel or a piece of pie in the face? In your postings, you sound like an undercooked piece of sour dough — mostly indigestible and very heavy on the stomach.

    At 25&26… Are you trying to explain that, while every A might equal B, not every B is, necessarily, equal to A (every dog is a mammal but not every mammal is a dog)? If so, I must say I’m glad you weren’t my teacher of logic; I don’t think I’d have *ever* understood it. Even at 58, my eyes began to glaze over the use of fancy (and linguistically awkward) phrases like “to disconfirm the consequent”; at 16, I think I’d have passed out.

  • I’m explaining this once more, not for Mary, but for anyone who may have been confused by her empty pedantic posts.

    Claim: The rapid rise in the price of a commodity implies speculation in that commodity.

    To disprove this claim it is sufficient to exhibit an example of a commodity which has rapidly risen in price but in which there can be no speculation, i.e. a counterexample. Iron ore provides the counterexample.

    Still confused?
    Consider the contrapositive of the claim: No speculation in a commodity implies no rapid rise in the price of the commodity.

    If you assume this equivalent statement of the original claim is true, then fact that there is no speculation in iron ore leads one to the conclusion that there is no rapid rise in the price of iron ore. This is contradicts the fact that there is a rapid rise in the price of iron ore. Hence the claim must be false.

  • Keith Olbermann: Then and now
    In January, the MSNBC star denounced telecom immunity as “textbook fascism” designed to “immunize corporate criminals.” Wednesday night, he heaped praise on Obama for supporting it.
    Glenn Greenwald [2008-06-26]

    http://www.salon.com/opinion/greenwald/2008/06/26/olbermann/index.html

    Two sides of the same coin, two management teams biding for control. The truth is out there in front of you, but they lay out this buffet of lies. Well I’m sick of it, and I’m not gonna take a bite out of it. DO YA GOT ME?

    RESISTANCE IS NOT FUTILE. WE’RE GONNA WIN THIS THING. HUMANKIND IS TOO GOOD. WE’RE NOT A BUNCH OF UNDERACHIEVERS.

  • Funny how thorin blames Democratic leaders for not impeaching when they don’t have the votes to do it and from an article pointing out how the Republicans are even stopping any bipartisan bills.

    If we can’t pass things [i]with[/i] the president’s assistance, how are we supposed to do it [i]without[/i]?

  • Rege, thorin-1, Chris – Explain to me where I am wrong here. I buy a barrel of oil on the NY Merc Exch for $140 to be delivered at a future date. On that date, I allow it to be sold at the market price, thereby giving me either a profit or loss. Meanwhile, my original $140 went to an oil producer somewhere. Theoretically, the oil producer doesn’t care if the market price is only $125 when my contract comes due, except that if he receives a substantial amount of his income through futures, he wants to ensure an upward trend. If this producer is part of OPEC, he wants to ensure that prices go up, and that supply is carefully managed. If he is not a member of OPEC, he still shares the same goals, and lets OPEC lead the way. As more profits are made through speculation, more money invested in futures, and the cycle escalates.

    Then my follow-up question would be this. If I sell my barrel for $160, from whom did I get the $20? Did I not inherently make my profit off the end user? What service did I provide him? And where in the free market could he have gone to avoid me?

  • “Anything to add?”

    Yep, have you noticed that McCan’t is saying he’s the underdog but that he’s going to win this 48 hours before the vote in November?

    Others writing here have suggested that the Republican’ts will cheat (again) to win this election. Normally, I wouldn’t think John Sidney McCan’t would involve himself in election fraud. But the fact is, he hates and despises Barack Obama (unlike his feelings toward Hillary Clinton) so much that he has probably allowed himself to be seduced by some Diabold operative who has wormed his way into McCan’ts confidence and told him that if he can just convince America (meaning, a compliant MSM) that he will close the gap near election day that his miracle win will seem real and not the product of hacked code.

    In short, he has sold his soul to Satan the Diabold(ic).

    Obama has to create a blowout. I know he’d have more of a mandate if he hews closer to issues on the campaign trail, and I’m sorry that he can’t do that. Nope, he has to win so convincingly that there is no way to steal this election.

  • Rege starts with a different hypothetical claim than I did. His point is the same as mine — you have to disconfirm it, not confirm any part of it.

    Libra — you are confusing categorical syllogisms (some, all) with conditionals (if, then). If you want to learn something, you know how to do it. It isn’t my job to explain anything to you. If you’re going to abuse me, no matter what I post about, don’t expect me to tell jokes while you do it.

  • Danp, do you now understand that Krugman’s logic is not flawed?

    I buy a barrel of oil on the NY Merc Exch for $140 to be delivered at a future date.
    In oil futures, you don’t necessarily buy the oil. You place a bet that the price of oil at that date will be greater than $140. Someone else, who doesn’t own the oil, takes the bet. This has no impact on supply. To effect the spot price someone needs to hoard the stuff. There is no evidence of this.

    You can read all of Krugman’s published thinking on this here

  • Rege, if the actual price that oil were bought and sold for were independent of the wagers you describe, then your argument would make sense. Since the price of oil is the same as the speculative price of oil in your wagering system, your argument doesn’t work.

    If you go back to the price of oil before the trading system was established, you will see that it was lower. Yes, there are other things that have happened concurrently that could account for the rise, but inserting a middleman into the process cannot do anything to lower the price.

    Those of us buying oil at the pump see the price of oil go up in your wagering system and see a consequent rise in the price we pay. Since the wagering system fluctuates based on rumor and non-production related world events (such as Al Qaeda releasing a new tape or the President making a speech), these changes have nothing to do with supply and demand — only perhaps the threat of changes to supply and demand. They nevertheless affect what we pay. Independent of Krugman’s logic, I don’t buy your argument.

  • Mary, I have a suggestion – the next several times you feel a need to instantly comment on something about Obama, don’t do it. Keep commenting about other stuff as you have here. Eventually our memories of your contrariness on that one subject will at least partly fade away, and then whatever you have to say won’t automatically be discounted or derided.

    I know you have a right to spout whatever, but if you are thinking about the effectiveness of what you want to say on non-Obama subjects, you will exercise that right more judiciously…

  • rege (41): First thanks for the work to find Krugman’s articles. That was very kind.

    I have to say, I am not convinced his logic is unflawed.

    Krugman keeps wanting to make this a simple supply and demand question. But there haven’t been any oil shortages. And there haven’t been any gas shortages in spite of how much we hear the same arguement about refineries. In fact, even though the demand goes up, supply has kept up.

    But if speculators buy, say, 80% of January’s production, they own the supply and therefore dictate the price. I suppose OPEC and other producers could thwart speculators by increasing production at lower prices to the point where speculators would be forced to sell at lower prices, but why would they do this?

    It seems to me that the flaw in your argument (and Krugman seems to take both sides of this issue) is that someone is out there betting on the lowering of prices (Krugman calls her Harriet Who in “speculative-nonsense-once-again”). But he also seems to concede in the same article that it is the oil producer that actually sells the futures contracts. In any case he says, “someone who actually has oil to sell decides to sell a futures contract to Joe Shmoe”. I don’t know who this someone could be other than a producer, unless someone is hoarding the oil, and we all agree that isn’t happening, right?

    And that brings us back full circle. Even though the spot price is usually higher than the future price, the investor and the seller of the futures contract both continue to make more money. In other words, if I bought oil in Oct ’07 for $90 and then sold it in Feb ’08 for $100, then reinvested at $98, I’ll likely make money again later because of the overall trend. The producer meanwhile sells for a bit less, but has his money early, and lets the new owners control the price.

  • Stephen1947 — when people automatically deride, they are making themselves look stupid, not me. I have always commented about other stuff here (in fact, I was here before Obama ran, but not as “Mary”).

    My comments about Obama these days occur primarily when I am irritated by Steve Benen’s obvious bias (e.g., noting that Obama contributed to Hillary without also noting that Hillary contributed to Obama’s campaign; suggesting that all McCain attacks on Obama can be answered with “I’m rubber, you’re glue”). I also think that progressives, and Democrats who care about the party, need to be reminded of the diversity of viewpoints existing on the left. This site is not an Obama lovefest. It is a place to seriously discuss politics. Divergent views should be welcome, but I’ll settle for tolerated. I don’t expect people to like or approve of me. When you’re over 35 you don’t tend to need that kind of validation any more.

  • not that he needs my help, but a word (ok, several) in defense of Benen.

    Mary, you accuse Steve of being biased toward Obama. Of course, others here – as recently as the 4 days between her primary-season ending speech and her actual concession – have accused Steve of being too sympathetic toward Clinton. If the most zealous on both sides accuse him of bias, its a pretty safe bet he is appropriately in the middle. I have followed this site for years and have rarely seen Benen tip his hand toward any particular D (except, oddly, Lautenberg). Indeed, had you asked me in January who I really thought Steve supported in the nomination race, I’d have bet on Edwards. But he worked in the Clinton WH; I seriously doubt he is some rabid Clinton hater like you seem to think.

    My outside-looking-in view is that this site and its owner/operator do have a bias: turning red things blue, whether that is the Presidency, a particular House or Senate seat, a state, or the public perception of a given issue (or, in the case of the media idiots, turning then from red to appropriately purple). This means he virtually never takes sides in primaries, and in the end supports the Democrat with the knowledge that in the battle to turn Red to Blue, sometimes you go to war with the candidate you’ve got. In this case, that is Obama, and whether or not he was Steve’s first choice is really irrelevant. The goal is for him to do as well as possible. To turn a red WH into a blue WH. Last point: for a blogger that does more than merely aggregate, Steve is amazingly prolific and consistently solid. Out of that many posts and words, will he occasionally have something that not everyone agrees with or agrees is worthy of a post or that is worded in a way that can be read as slanted? Sure. Why, he might even – although I certainly wont vouch for any – make a *gasp!* mistake. But that is understandable and hardly reason to play gotcha when most of us enjoy his site and dont make half the effort ourselves.

    which makes this a great opportunity to again thank Steve for all of his hard work. I would be less sane without this site.

  • I think Paul Krugman has dug himself a hole. He wrote a column some time ago denying speculation as the root cause for the skyrocketing cost of crude, and doesn’t want to back off now.

    He’s right about the long term. Oil will get more expensive as it costs more and more to produce it, but he’s ignoring the short term factors of a falling dollar, speculation and market manipulation. He’s being stubborn, in my opinion, because he went out on a limb and blamed the usual supply and demand nonsense we always hear when oil/gas prices jump up.

    • Comments are closed.