Posted on 05/23/2006 8:55:22 AM PDT by governsleastgovernsbest
by Mark Finkelstein
May 23, 2006
Sometimes you just want to throw up your hands. Interviewing another big oil exec this morning, Katie Couric's proposed solution to high gas prices was to repeal the laws of supply and demand . . . just a little bit.
Whereas Matt Lauer took a while in his interview of another oil exec to get around to his price-cutting point, Katie wasted no time. Interviewing Shell Oil President John Hofmeister, Katie's opening salvo was
"I am just wondering, you and many other oil companies are posting record high profits, of course. And while the average consumer is hurting. I am wondering, Mr. Hofmeister, would it help the long term reputation and value of your company and shareholders if you could feel the pain that consumers were feeling and decrease the wholesale value of gasoline? Is that something you would ever consider?"
In responding, Hofmeister made the obvious point that had somehow escaped Katie: "Lowering the wholesale price would really put a run on our gas and we would run out. The market sets the prices. We follow the markets."
What's particularly remarkable about Couric's inability to consider the market implications of her suggestion is that, no more than a minute before making it, Katie herself in introducing the segment had reported that:
"Oil supply is having a tough time keeping up with demand. The world produces 85 million barrels of oil a day but consume 84 million barrels a day."
Katie, don't you get it? Demand is 84 million barrels AT CURRENT PRICES. Demand is e-l-a-s-t-i-c. If you lower prices, you increase demand. If there's only a one million barrel supply cushion, any significant price decrease will inevitably result in shortages! Ar-g-g-g-h!!
Hofmeister later mentioned that "We have six million people a day who come through our stations" and claimed "we care about every one of them." Katie jumped at the opening:
"If you care about people, you know that consumers are really struggling with this. [Is] there is no middle ground to give them a rebate to help them out while enjoying profits to reinvest for future earnings?"
Again, Hofmeister had to bring Katie back to economic reality. "I wish there was. In a commodity marketplace where supply and demands prevail, even public policy could not help. The windfall profits tax in the 1980s was a failure and set up problems today. Public policy is important to the oil industry especially in terms of getting more supply. If we can bring more supply to the American people, that will go a long way to meeting the demand."
Katie: "How will you do that?"
Hofmeister: "We would like to see the Congress give us permission to explore on the outer continental shelf."
Couric: "Environmentalists have a big issue with that."
Hofmeister: "And we will do whatever public policy says. But if we can't access the 100 billion barrels out there, it will lead to a tougher supply situation."
Katie got in one last shot: "In closing, this Memorial Day weekend when people are filling up their gas tanks and cursing you out, what would you say to them?"
Hofmeister: "Drive slower. You will get more mileage."
That wasn't sufficiently remorseful for Katie: "You must have something else to say."
Hofmeister: "We don't like the high prices anymore than consumers do."
Katie, next time you do a segment on the latest diet fad [and last night on the supermarket checkout line I saw - no joke - a cover story in Woman's Weekly Magazine for . . . The Da Vinci Code Diet!], why not suggest to the diet guru that the laws of gravity be ever-so-slightly altered to give the obese a break? It would make as much sense as your demand for a suspension of the laws of supply and demand!
No 'or what' about it, but she's very cute.
Sure, she's stupid and economically illiterate but she reflects the economic ignorance of 80% of the American population. Go into any diner in America and eavesdrop on the conversations going on over coffee in the morning. If the topic is the price of gas the consensus will be that it is the fault of "big oil" (is there such a thing as "little oil"?) or Bush. Intellectual laziness has become the norm in our culture.
The liberal idea of "markets" is rationing and price controls.
"Intellectual laziness has become the norm in our culture."
I see it differently. The bottom line is the same, but we differ on mechanics.
That is: Most middle class people are good at their job, and very busy at home, (kids, home repair, events, etc.). This leaves them to be dependent on the MSM, (evening news, newspapers, news magazines), for their information. If you rely on Katie, and Katie is ill informed or even purposely misleading, then many people are misinformed.
Economics is dry stuff. Not everyone cares to study it. Particularly the model for the oil market. I know they should, but there are lots of "shoulds", excersize, diet, read, save, charity, church, etc. We all fall down on one or more of these.
I blame the MSM for the talk in the diners. And for the MSM, ignorance is inexcusable.
I usually chime in with: "Well, if you think $3.00 a gallon for gas is expensive, how do you justify spending $1.50 for eight ounces of coffee?
You wrote that headline? I thought it was the original one that went with the article. Unless you're the Mark Finkelstein listed as the author of this piece. Nothing personal to you if you're Mark -- the headline just tries too hard to alliterate.
FWIW, I've written some pretty blah headlines in my days as an editor....
Here you go.
http://msnbc.msn.com/id/12518683/page/4/
MR. RUSSERT: ...and do you believe the oil companies have been adding on a little bit extra profit?
MR. CRAMER: I, I think if they could drill they would drill. If they could refine more, they would. These are companies that are run for the shareholders, but they’re run to be able to produce as much oil as we can possibly use. They want to do that. Lee Raymond, he, he generated $67 billion in profits for his shareholders. I think that that’s a reasonable return, $144,000 a day. Katie Couric makes $85,000 a day. What value has she created vs. 67 billion by Lee Raymond?
MR. RUSSERT: Well, to the “Today” show and to the millions of viewers?
DR. YERGIN: Greenlighted to our morning...
MR. RUSSERT: You leave Katie alone. At least till the end of May.
MR. CRAMER: She plays for another team now, so...
Great point! Or $5.00 for a pack of cigarettes...
You are absolutely correct in your assessment. That's why it should be mandatory that everyone with access to a computer be required to spend at least 30 minutes a day on Free Republic...
How rude is that question? I wish he had replied with something like "I would first thank them for their business and ask them to please take time out this weekend to remember those who have made the ultimate sacrifice for America's freedom.
Her face would have turned inside out.
Durbin is a total tool, btw
Excellent suggestion. Hofmeister was playing it VERY safe, though, in his comments. For example, when Couric confronted him about greenhouse gases and global warming, Hofmeister abjectly agreed that it existed and needed to be addressed.
If you want something truly ironic to ponder consider how much she is paid to be that stupid.
Your example of $5 cigareetes won't work here. All government taxes and litigation at work there.
She is going to have to take scowl lessons from Elizabeth Vargas to get that permanent, furrowed-brow, black, brooding look when she reads the bad-news-of-the-day-it-is-Bush's-fault from the Rather (fake-but-accurate) News Network.
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In all fairness, Li'l Katie does do hard news on occasion... |
Why do these guys even bother going on these "talk" shows??
The coffee works great because of the comparison between:
1. Grow and pick coffee beans. 2. Dry and grind beans. 3. Mix with hot water and drink.
vs
1. Search for oil until you find it beneath the surface of the ocean. 2. Fabricate and haul a drill rig and platform out into the ocean and anchor it to the sea floor. 3. Drill for oil and pipe it into a tanker. 4. Drive the tanker to a refinery destination to off load the oil. Pump the oil through the pipeline and into tanks, then pump it to the equipment where it is used to manufacture gasoline. 5. Pump the gasoline into tanks and wait for trucks to come to take it to the local gas station. Well, you get the idea.
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