AUGUST
28, 2005 --
Last
week, LPR heard a radio news report blaming the latest rise
in crude oil prices on anxiety about a hurricane. How often
are crude oil prices blamed on anxieties and worries about
one event or another -- that has yet to occur.
(In addition, of course, blaming occasional refinery fires for price spikes.)
This writer doesn't think he has heard a report declaring, of the latest oil
price hike: "there they go again, out to squeeze the driving public."
Now, if anxiety and worry are truly the reason oil prices are now higher than
oil rigs, let's prescribe anti-anxiety medication for all oil traders.
From here, oil prices seems a current example of the observation attributed
in Federalist 57 to James Madison that there are people seeking the "ambitious
sacrifice of the many to the aggrandizement of the few."
Perhaps
it is time Mr. Madison was awarded the Nobel Prize in Economics
for his insightful observation which points to a law of economics:
When a relatively few individuals use their position in the
economic cycle to increase, by a significant percentage, their
prices - with no commensurate monetary gain to the
people -- general purchasing power declines, along with the economy, thus harming
the general welfare and the national interest the Constitution drafted by Madison
sought to protect.
LPR calls this Madison's First Law of Economics.
Thus far, the Washington community, which, alas, is a bit too far removed from
the people these days, has shown no interest in helping us resist the aggrandizement
of the oil traders.
"
Aggrandizement" not "anxiety" is, for LPR,
the word that better describes the
motivation of the traders.
An observation by William F. Weld, in his novel, Stillwater, about the flooding
of five towns in western Massachusetts to create a reservoir, also seems to
describe the oil-trading mindset: "America is grand and full, but people
can be hard." (Simon & Schuster, p. 17.)
When the hardness of aggrandizers injures economic stability, that hardness
has risen to a matter of the national interest. Thus far, the Washington community,
which seems to have more in common with each other than with the rest of us,
apparently sees no national interest issue in oil prices.
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