Chimeras and Snake Oil Salesmen

Senate Republicans do the sensible thing. Nice to know they're still showing up for work.

Milton Friedman is generally credited with having said, "the business of business is business." (He may not have been the first to say it.) Somebody explain to me how a "windfall tax" like the one that the Senate Snake Oil Salespeople (SOS's -- an apt acronym for Democrat) proposed would not be passed directly on to the consumer. Anyone?

I've been hearing a lot of blather about "oil speculators" being to blame for the cost at the pump. I'm no economics guru, but my impression is this is obfuscation. In any market, there are speculators who will sign contracts to buy at a fixed price for a finite time period into the future, betting that the market cost will rise. This happens with paper in publishing, steel in construction, and oil in a host of industries. As Rush Limbaugh eloquently and concisely explained yesterday, speculators are not the problem.

The problem is one big problem, surrounded by a host of sub-problems. The problem writ large is Supply and Demand. There's just less oil on the open market than there used to be to go around. China and India are guzzling down more and more oil all the time. Supply gets more scarce, price goes up. Even my ultraliberal hippie free-love economics 101 professor knew that much.

The subproblems:

1. The SOS's won't let Evil Big Oil drill in ANWR and explore off shore to increase raw supply
2. The SOS's won't let Evil Big Oil build new oil refineries to increase market supply
3. The SOS's are pursuing Ethanol, a less efficient source of fuel than petroleum, with fanatical glee. One or two more petroleum refineries would be of the devil. But Ethanol refineries? Sure, why not.
4. Taxes. In the city of Chicago where I work, taxes are close to $.80/gallon. Not like that's significant or anything. No, it's those darned speculators!

Couple this with a weak dollar, and now we're talking about a complete playground beating.

Oh and by the way, thanks to the ethanol kool-aid that the SOS's are swilling and spilling, groceries are more expensive than ever too. I eat corn. Animals that I like to eat, eat corn. I haven't really figured out a way to eat petroleum to offset all of the corn that is now being used to feed my car.