Judged by His Own Criteria

by Don Boudreaux on April 27, 2011

in Energy, Hubris and humility, Politics, Prices

Here’s a letter to the Washington Post:

Stephen Stromberg is correct that the recent run-up in gasoline prices isn’t the fault of President Obama (“President Obama says that gas prices reflect supply and demand,” April 27).  But Mr. Stromberg is wrong to pity Mr. Obama for nevertheless being blamed by the public for their pain at the pumps.

Mr. Obama, like so many elected officials, won office by deluding voters with a grand image of a government that, in the right hands, can fix nearly every problem that troubles the good people of this republic – a government that can fix all that is broken, can cure all social ills (and many physical ones, too), and can transform this vale of trade-offs, scarcities, chance, and imperfections into a paradise in which the only suffering is that of Evil Villains finally brought to justice for the depredations that they’ve for so long inflicted upon the pure, noble, all-deserving We the People.

Because Mr. Obama assured us that with him at the helm Uncle Sam’s powers to “change” society would be vast and amazing, he deserves no pity for being held accountable for his inability to perform the marvels that he promised to perform.

Donald J. Boudreaux

BTW, while I disapprove of existing government restrictions on drilling, and while I recognize that Obama has in place – and threatens to put into place – a plethora of policies that result in gasoline prices higher than these prices would otherwise be, I sincerely do not believe that much, if any, of the recent run-up in gasoline prices is his fault.

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Daniel Kuehn April 27, 2011 at 11:36 am

Fix all problems? Cure all social ills?

I was never promised that in the primary or the general election.

I certainly wasn’t promised a paradise, nor would I have believed any of these things if I was.

Who promised this exactly, Don?

Sam Grove April 27, 2011 at 11:46 am

Ever heard of hyperbole?

John V April 27, 2011 at 11:58 am

If PK had done the same thing, DK would be defending him on grounds that people don’t understand what he meant….even if he meant what he said.

IOW, DK is perfectly capable of understanding of Don is saying and how to measure it all out accurately. He simply chooses not to do so.

Bruce April 27, 2011 at 11:48 am

“I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal.” – Barack Obama

Sounds like a promise to me

Daniel Kuehn April 27, 2011 at 12:04 pm

Oh – well I think he did promise that he’s going to help providing care for the sick and good jobs. I don’t think he said he’d have no effect!

“began to” is a dumb way of putting it, of course.

John V April 27, 2011 at 12:02 pm


Like was said in the Krugman/Wilkinson thread, DK:

You make great effort to understand and defend PK in the best possible light…even when it often isn’t warranted. Yet, like was said, you do a 180 when it comes to Don and others.

The point is simple:

While pols are nowhere near as able as they pretend to be on the campaign trail, there’s a certain justice in watching them get bashed for things beyond their control…if only because they pretended otherwise.

JohnK April 27, 2011 at 12:05 pm

You defend principles, Danny defends principals.

Justin P April 27, 2011 at 12:52 pm

DK does it all the time. It’s just his partisanship.

Don Boudreaux April 27, 2011 at 12:07 pm

That’s not what you heard, Daniel, but it’s close to the impression that I’m sure is conveyed to many people who think less critically about government than you do. Who was the talking head who admitted during the 2008 campaign that Obama gives him goose-bumps? (I can’t now recall his name.) Think also of the mid-January 2009 cover of the New Yorker showing a glowing “O” rising luminously above a peaceful landscape – as if some savior with super-human powers and resolve were, finally, coming to rescue America from her misery.

If voters understood reality as realistically as you do, Obama would simply say “Look, underlying economic realities are causing gasoline prices to rise. I can’t do anything about this current price spike.” Instead, he demonizes speculators and appoints a commission to study the problem.

HE might know damn good and well (as Stephen Stromberg does) that there’s nothing that either he or the government can do to reduce the current high price of gasoline. But he cannot appear to be powerless. So he blames a bogeyman and launches an effort to slay this bogeyman; he thereby appears to be playing the role of the Oh-So-Powerful-and-Caring pooh-bah that he wants voters to think him to be.

Of course, Obama is hardly unique in this theater of the absurd; lots of politicians from both parties play this ridiculous role. Obama’s just especially talented at making people believe that he possesses special powers and caring.

Peter April 27, 2011 at 12:31 pm

Chris Mathews had goosebumps …

Methinks1776 April 27, 2011 at 3:34 pm

Heck yeah. Chris Mathews almost forgot that Obama’s black. There he was, free of any hint of Negro dialect (except when it suited him), talking to a giant room filled with white folks as if he might be just as good as them.

Why, I’m having a skin reaction just thinking about Chris Mathews’ amazement.

yet another Dave April 27, 2011 at 7:48 pm


Whatever you do, don’t think about whatever Chris Mathews had running down his leg…

Daniel Kuehn April 27, 2011 at 12:51 pm

Hey – January felt like a sunrise to a lot of us.

I’m not sure what’s superhuman about that. To be honest, any of the Democrats and half the Republicans running would have felt something like a sunrise that January. There’s no hero-worship here.

“Theater of the absurd” is exactly right – and I’ve called it “political theater” on here in the past too.

Don Boudreaux April 27, 2011 at 12:53 pm

No hero-worship of Obama back then? Are you serious?

Daniel Kuehn April 27, 2011 at 1:10 pm

No I have no hero worship.

I think there was considerably less hero worship than a lot of people suggest there was. For example, I think there is more hero worship among Ron Paul supporters than there is hero worship among Obama supporters. There’s always going to be some hero worship, of course.

I know people are going to think that’s absurd… but of course that’s to be expected if you’re positively disposed towards the guy.

Sandre April 27, 2011 at 1:30 pm

This is what I call Bull Shit Mr. Kuehn. I’m sure if I look hard enough, I’ll find sportsmen, or evangelists with more passionate hero worship than Obama had at the time of the election.

There is no national hysteria surrounding Ron Paul. Sure, he has a small following of passionate supporters, which is ridiculously small in size compared to the worship that Obama received, not just in the U.S but from around the world, including a Nobel “Peace” prize awarded for no good reason. There are many libertarians and conservatives who passionately hate Ron Paul, and you can come close to describing any subgroup inside the left end of the political spectrum as being so ill disposed to Obama. Besides, Ron Paul, whether you agree with him or not, has a track record of speaking his mind plainly and openly even on topics that is not found to win no hearts and minds of voters.

I’m sure you can and will write a wordy drivel in reply justifying your position. Because you are incapable of admitting ever that you were wrong

Sandre April 27, 2011 at 1:32 pm

And one more thing, I noticed your attempt to divert attention from Don’s main point with the following statement – “No, I have no hero worship”. No one accused you of it, you are not that important to be singled out for a special remark like that, despite what you may think of yourself.

Daniel Kuehn April 27, 2011 at 1:40 pm

Don’t confuse your denominators, sandre. I said “among Ron Paul supporters” and “among Obama supporters”.

As for diverting attention – I wasn’t – I was clarifying. Don asked if I thought there was no hero worship of Obama which he rightly found incredulous. I wanted to clarify that that was not what I meant – certainly there was some hero worship.

JohnK April 27, 2011 at 1:44 pm

“I’m sure you can and will write a wordy drivel in reply justifying your position.”

I’m sure it will be dark after the sun goes down, and light again when it comes up.

Sam Grove April 27, 2011 at 2:19 pm

Considering Ron Paul’s record and willingness to propound positions that draw derision from the mainstream, I suggest that he is much more deserving of the term “heroic” than Obama.

Witness: http://www.youtube.com/watch?v=mDND5tcUFoI

Ron Paul stuck to his guns despite the applause Giuliani got from the audience. Such courage in a politician is rare to behold.

SaulOhio April 27, 2011 at 6:32 pm

About the time of the elections, I heard a woman at Wal-Mart talking about how great Obama was, how he was going to solve all of our problems. I commented something like “Obama is not the second coming. He is not God. He does not have the power to do all this.” Her answer was “I don’t talk to crazy people”.

Ken April 27, 2011 at 1:37 pm


“There’s no hero-worship here.”

How do you explain the tingle up Chris Matthews leg? The hero worship was so obvious even SNL did a skit on it. SNL! The show that couldn’t do enough to tear Palin down.

How many reporters went to Wasilla, AK to deep dive Palin, the republican vice presidential (not even presidential) candidate vs. the number of reporters that went to Chicago? Why is Obama releasing his birth certificate now, after two years in office? Would a republican president have gotten away with two years of stonewalling? Why has he stonewalled and sealed dozens of documents related to his past? Why don’t mainstream reporters hammer away at Obama for this?

Whenever people questioned Bush’s reserve time, he released the documents. What do you think would have happened had HE stonewalled?

Obama’s presidency is turning out to be Bush’s third term. Obama has reversed himself on every major criticism he made of Bush, yet mum from his mainstream hero worshipers. He’s still the hope and change president, despite the fact that he’s doing exactly what Bush did, with the exception of Obamacare.

Obama is so clearly the result of hero worship that it baffles the mind that you could even suggest otherwise. Not only WAS there hero worship, but there still IS hero worship.


indianajim April 27, 2011 at 1:51 pm

“Obama’s presidency is turning out to be Bush’s third term…”

Is a lot of similar trends, but the slope of the spending trend is significantly different. That is, I see Obama as about 3 times as immoral as Bush.

Ken April 27, 2011 at 2:08 pm


Fair enough.


Randy April 27, 2011 at 12:58 pm

I remember writing during the campaign that Obama strikes me as the perfect politician. I did not mean it as a compliment.

yet another Dave April 27, 2011 at 1:45 pm

No doubt – he is an exceptional politician (that’s not a compliment from me either). To reach such high office with his combination of incredibly stupid ideas, major baggage and total lack of qualifications is simply amazing.

Don Boudreaux April 27, 2011 at 1:50 pm

Frankly, because most people AS VOTERS are rationally irrational (see Bryan Caplan’s 2007 book), it would be even more incredible for someone to reach the presidency with good ideas and sound qualifications to implement them.

yet another Dave April 27, 2011 at 1:57 pm

Good point, Don. But now I’m even more depressed! :-)

Dan April 29, 2011 at 2:47 am

What is so incredible about a soothsayer lawyer trained in the art of creative phraseology with a sycophant media praising every utterance as genius while demagoguing any and all opposition. Giving credit where it is due, he did make good political moves by often declaring present so as to leave few records on voting and hence his likely views on issues.

yet another Dave April 29, 2011 at 6:19 pm

None of those things are why I think he’s an exceptional politician.

Most successful politicians have mastered the “art” of talking without saying anything; many of them manage to make people think they said what they wanted to hear, but he takes it to a higher level. When he speaks, lots of people are deeply inspired by him – that’s what IMO drives all the obama worship creepiness. Most politicians just can’t come even close to the level of inspiration he pulls off.

Dan April 30, 2011 at 8:47 pm

Interesting on the number of lawyers that make up the elected members of the democrat party? After sitting as a juror for 3 months on a capital case, I am not surprised by the percentage of lawyers in Congress, especially that of the democratic party. More rules, regulation, and legislation is good for business.
Lawyers have practiced the art of parsing words and phraes. Their jobs are to free criminals, incarcerate innocents, and squeeze money out of businesses.

Chris O'Leary April 27, 2011 at 1:23 pm

I forget if it’s Hannity or who, but he has a couple of clips of people who got the impression that with Obama in office they wouldn’t have to worry about paying their mortgage any more.

People clearly got the impression that he was going to solve a whole host of problems.

Ken April 27, 2011 at 12:19 pm


What campaign were you watching? He said he was the one and he claimed he could stop the rise of the oceans, final provide care for the sick and provide jobs for the jobless, ended a war, etc. I’ve helpfully provided links to Obama’s arrogance and hubris since your memory has clearly been compromised.




Sandre April 27, 2011 at 1:35 pm

Yes, I work in Silicon Valley. You should have come to any of the break rooms inside our office buildings that week of November 2008.

Here everyone “knows” that if you are not of the democratic sheep, you are too stupid. People of different opinions know how to lay low, and not to blurt out their disagreement with “clear truth” of progressive ideology.

crossofcrimson April 27, 2011 at 3:11 pm

With all due respect, it’s a shame that someone of your intellectual caliber refuses to read the commentary of those with whom you disagree with the same gracious and flexible interpretation with which you seem to allow those you’re often defending.

You critique your detractors in light of the most discrete and literal interpretation of their words against the backdrop of the most liberal and forgiving understanding of those they take to task.

There’s plenty of room to disagree and critique, but often your nit-picking seems not only pedantic but obstructive in context of the discussion at hand.

Daniel Kuehn April 27, 2011 at 3:59 pm

I understand it’s hyperbole and I think the hyperbole is still providing a misleading picture. Did you not pick up that my response was also somewhat hyperbolic?

I don’t appreciate your insinuation about the way I treat different sorts of people.

crossofcrimson April 27, 2011 at 5:12 pm

“I understand it’s hyperbole and I think the hyperbole is still providing a misleading picture. Did you not pick up that my response was also somewhat hyperbolic?”

I can’t speak for others here, but for me it has little to do with hyperbole per se. It has more to do with the generosity of your translations. Put simply, you scrutinize the views and words of some very tightly while giving a wide, lateral spectrum of feasible interpretations to the words of people you seem to find more appreciable. I’m not even saying you do it on purpose – I’m just saying that you do it. And I’ve followed you enough on this and several other blogs to know it’s nearly ubiquitous, and I’m not the only person who recognizes it.

“I don’t appreciate your insinuation about the way I treat different sorts of people.”

I’m sorry if you don’t appreciate my “insinuations,” but it’s hard to follow you from blog to blog and not notice patterns and personal traits. For what it’s worth, and as critical as the allegations seem, I didn’t mean it merely as ad hominem. Sometimes you bring very brilliant insights and alternative views to the table. I’d have a hard time completely disparaging you in light of that. Nonetheless, sometimes you remove context from the conversation or treat suppositions of good faith with undue cynicism – to the point of blatant obstruction.

Again, I’m not saying that as some angry nerd. I enjoy much of what you have to say. But I have to call them like I see them. I don’t expect anyone to be perfect as I’m certainly not.
And I’m not going to pretend to be nearly as intelligent as half of the people here. But I’d hope that people would be willing to call me out if they thought I was being too selective in my interpretations.

Daniel Kuehn April 27, 2011 at 5:31 pm

My guess is you:

1. Mistake the fact that I consider Krugman more convincing with the idea that I cut him a break. I criticize Krugman on here more than some of you guys criticize Don. I don’t think you would say that that’s because you give Don a break. It’s because you scrutinize him and agree with him. Don’t confuse the two.

2. Don’t notice my critiques of non-libertarians or my agreement with libertarians as much because that seems more natural to you, and that you disproportionately notice my disagreements because I happen to be disagreeing, and

3. Are looking at a truncated sample of my thoughts. I find agreeing boring – or put it this way – when someone agrees with someone else, there’s not all that much to be said. Some people here can write several paragraphs restating essentially the same point that Don makes and agree with him. I can’t do that. I don’t leave extend agreements on DeLong’s blog, for example. There’s not all that much to be said – I leave a sentence or two noting my agreement. When I agree with Don or Russ I usually keep it short and sweet. What is there to say other than “great point”?

John V April 27, 2011 at 6:02 pm


I think all that misses the point. Perhaps you genuinely believe it all. Not sure. But all those rationalizations/explanations still skirt around the central criticism of how pedantic and fastidious you can be with libertarians while being extremely generous…to the point of being just as pedantic and fastidious…in your defenses and rationalizations of PK.

yet another Dave April 27, 2011 at 7:41 pm

Yours was the most gracious and kind presentation ever of the same issue several of us have repeatedly brought to dk’s attention. One would expect that surely that would elicit some introspection on his part.

But, noooo – you got “My guess is you [emphasis added] right out of the chute.


crossofcrimson April 27, 2011 at 10:03 pm

1. Not very likely. There are plenty of econ-geeks (some who are Keynesian/neo-Keynesian) who comment here and there on various sites I peruse – whom I disagree with most vociferously. Most of them (at least the more intelligent ones) don’t have this trait of just being obstructive. Or, if we want to step outside of economics, look at Gene Callahan. He strings libertarians up left and right. And while he certainly has his own problems (I think), he makes very responsible arguments (generally)…and I never get the feeling that he’s just trying to be contrarian. Have you noticed that several of us have jumped on you for this trait while we generally haven’t accused others we disagree with of it? It’s a card that generally doesn’t even get played on “mao-dung” or “muirgeo” – and I’m sure people here disagree with their views far more than yours. Do you think that’s simply a coincidence?

2. Again, not likely. Even when I disagree with someone, there’s a line between verbal ripostes and pedantry. You make a lot of comments that I think are brilliant. In fact the ones I enjoy the most are the ones where you challenge the Austro-libertarian perspective (particularly on Murphy’s site) even though, more often than not, I still don’t agree with you. Again, Callahan is a great example – I disagree with many of his critiques but rarely do I think he’s just trying to obfuscate.

I will give you that I may harbor contentious thoughts upon reading something I disagree with (by you or anyone else), and surely bias gets the best of me sometimes. But, again, it doesn’t follow in most cases that I think they’re doing anything other than disagreeing with me.

3. This seems more plausible than the previous two thoughts. In fact, I’m generally the same way. I rarely just give nods to people (it’s boring, yes). I generally just reply to comments I disagree with. I’m sure that’s not particularly unusual among the blogs. What is unusual, and it remains to be the issue, is when someone is consistently giving greater generalized latitude to some interpretations while narrowly confining others. It’s rare to see someone so adept at drawing the vague from the explicit in one argument, and just the opposite with another. It’s fine to find one argument more convincing than another. If that’s all that was happening we wouldn’t be having this conversation.

brotio April 29, 2011 at 2:31 am


Thanks for trying. Virtually all of us here have offered Daniel the same advice (though not nearly as eloquently and thoroughly as you did), and got pretty much the same response you did: “YOU just don’t understand me!”

I think that the only one here who didn’t offer Daniel the same insight was Vidyohs. Vidyohs accurately called him Disingenuous Kuehn and left it at that.

Turns out we could have followed Vid’s cue, and saved ourselves some unnecessary typing.

Brent April 27, 2011 at 11:51 am

One reason gas prices are climbing is because of a falling dollar. Isn’t that reason enough to blame the current administration?

John V April 27, 2011 at 12:02 pm


Gil April 27, 2011 at 12:18 pm

If gas prices were rising solely in tune with inflation then no one would particularly care.

Justin P April 27, 2011 at 12:53 pm

Lot’s would care, since paychecks don’t fall in line with inflation.

Gil April 27, 2011 at 9:36 pm

Most do either keep up or are ahead of inflation however such prices rises were merely inflation then the real price of oil is rising just peoples’ perception of it.

Gil April 28, 2011 at 1:31 am

should read “isn’t rising”.

Jay Baldwin April 27, 2011 at 11:58 am

“Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” – Mencken

Shawn Slayton April 27, 2011 at 12:06 pm

Obama promised higher wages for the uneducated and the poorly skilled, irrespective of flat-lined blue-collar worker productivity. Obama promised improvements in education, irrespective of entrenched union opposition. Obama promised comprehensive immigration reform, irrespective of the rule of law. Obama promised the amelioration of home foreclosures, irrespective of economic fundamentals. Obama promised Keynesian stimulus would create jobs, independent of, well, common sense. Obama promised an end to foreign wars, independent of history and existing foreign policy. Obama promised…Dude, this is too easy. I’m out…

Here are like 500 other promises, some met, others not…


Mao_Dung April 27, 2011 at 12:32 pm

Mr. Troll,

Any progressive “promise” is countered by reactionary libertarians who want divided, stalled government; by pro-rich, rich Rethuglicans in the Senate who can merely threaten a filibuster to squash any legislation that isn’t pro-rich enough; by racist Koch billionaire financed Teaparty lunatics who want the clock turned back until there are only the super rich and peasants like themselves. Please take your Rethuglican trolling somewhere else. We progressives hated Bush who was an total incompetent fraud that 5 thugs on the Supreme Ct. installed into the presidency. You and your kind destroyed this country. You want to complete the job with the next nincompoop your foul party puts on the ballot.



Mao_Dung April 27, 2011 at 12:41 pm

By the way, I oppose (hick) hunters like you with every fiber of my being. You all have no respect for life. I hate you. If it were up to me I’d take all your guns away.

Justin P April 27, 2011 at 12:54 pm

Come on admit it, taking their guns away isn’t all you’d do. Like any good Statist, you’d make them pay. Your tone says as much even if you won’t say the words.

Mao_Dung April 27, 2011 at 1:02 pm

I’d take their guns away from them because they are fundamentally dangerous. Think massacre in Arizona with bullets flying through people’s heads. First, I’d outlaw hunting. When that measure failed to work, I’d take their guns away from them. Tell me who the real wild animals, and beasts are?

Justin P April 27, 2011 at 1:27 pm

“real wild animals, and beasts are?”

People that think they know what’s best for everyone else.

crossofcrimson April 27, 2011 at 3:18 pm

“Think massacre in Arizona with bullets flying through people’s heads.”

Yeah, and then think of all those people who die in car accidents. I’m “gunning” for cars next.

I can see a perfect world in which we’re safe and secure….in straight-jackets in white heavily-padded cells. Ah….so grand a hope. But until then, evil Republicans bleh bleh bleh…evil Koch brothers blah blah blah….

crossofcrimson April 27, 2011 at 3:19 pm

“Tell me who the real wild animals, and beasts are?”

People (like you) who want to aggress against peaceful individuals.

Next question.

brotio April 29, 2011 at 2:33 am

Mao is a satirist.

Ken April 27, 2011 at 1:08 pm


So you don’t oppose non-hick hunters, right?


Mao_Dung April 27, 2011 at 1:21 pm

I became incensed and radicalized against hunters and hunting when I took a look at utterly grotesque videos on Youtube of senseless, brutal killing for killing sake. There was no rhyme or reason other than pure savagery and lust for blood. I was so thoroughly disgusted by what I saw that I vowed to smear blood in the face of any hunter that I came across. And that includes you.

Ken April 27, 2011 at 1:43 pm


So you did the logical thing and concluded that ALL hunters are senseless, brutal killers. That makes total sense. You’re the most juvenile commenter on this site, so it doesn’t surprise me one bit that you generalize like that.

By the way, the particular logical fallacy that you’re committing is called the fallacy of composition. It’s even in wikipedia, so even you shouldn’t have a hard time understanding it.

Oh and if you’re going to smear my face with blood, make sure it’s fresh. Stale blood is just gross!


Sam Grove April 27, 2011 at 2:23 pm

Careful, Dung likely wouldn’t have a problem using your blood.

Ken April 27, 2011 at 3:10 pm


I’m pretty sure Dung is the one who would need to be careful.


kyle8 April 28, 2011 at 6:54 am

of course you would, becaue you are 1) a would be tyrant, 2) and idiot, 3) stupid, and 4) evil.

All things you have in common with all marxists.

Slappy McFee April 27, 2011 at 1:30 pm

Mao called someone a troll, that made my dad. Thank you very much.

Slappy McFee April 27, 2011 at 1:32 pm

made my day dammit

Eric B April 27, 2011 at 2:47 pm

What I liked most was that he responded to one of his own posts – in effect stating that he was a hick hunter and hates himself.

crossofcrimson April 27, 2011 at 3:15 pm

“by racist Koch billionaire”

Well, that didn’t take long.

If you’re argument’s bad enough that it revolves around demonization and conspiracy, I’d say it’s a good sign that you’re not really thinking too hard. As Tyler Cowen said…

Every time you tell yourself a story, just imagine that your IQ dropped 15 points.

That seems about right.

Rugby1 April 27, 2011 at 4:49 pm

“Any progressive “promise” is countered by reactionary libertarians who want divided, stalled government; by pro-rich, rich Rethuglicans in the Senate who can merely threaten a filibuster to squash any legislation that isn’t pro-rich enough”

Hmmmm…. You did know that “progressives” had complete control over the house, senate and executive branch from 2008 to 2010. When they had control over 2 of the branches why were they not able to ram through so many of the “promises” made by Obama and his ilk? And unsurprisingly the promises Obama did “keep” have turned out to have consequences that were foreseeable to anyone who could think beyond stage 1.

Shawn Slayton April 27, 2011 at 5:35 pm

I’m still confused whether I’m The Troll or not? I THINK I am, but then it got weird.

The government shouldn’t allow escaped mental patients on the Internet. I AM for this form of government control.

Ed C April 27, 2011 at 12:13 pm

I think attacking Libya probably affected gas prices.

ColoComment April 27, 2011 at 12:35 pm

It may be, as well, that the increasingly restrictive oil & gas exploration and development permitting and leasing policies of this Obama administration have had some effect in raising gas prices. The prices may partially reflect a likely long-term increase in reliance on tenuous foreign supplies, as the result of the constriction of domestic sourcing. Further, for all the hoo-hah about renewable energy and electric autos, it will be a long time, if ever, before mass transportation, the trucking industry, trains and aircraft will convert to something besides fossil fuels — that domestic demand for fossil fuels will remain, or even grow with a recovering economy, putting increasing pressure on pricing.

W.E. Heasley April 27, 2011 at 12:58 pm

‘Because Mr. Obama assured us that with him at the helm Uncle Sam’s powers to “change” society would be vast and amazing, he deserves no pity for being held accountable for his inability to perform the marvels that he promised to perform.’

Ah, the evil of it all!

“If markets fail, governments fail too. Government is the only enterprise on earth that when it fails, it merely does the same thing over again, but bigger” – Don Luskin, TrendMacro

Darf Ferrara April 27, 2011 at 1:16 pm

In 1980 the US had 88% of the world oil wells, but only 14% of the worlds oil. The number of wells creates a commons problem, where the well pressure is decreased and far less oil is produced than could be. Is limiting drilling that bad?


W.E. Heasley April 27, 2011 at 1:49 pm

If drilling should be limited due the parameters you set forth, then market forces would be knowledgeable of the parameters as well and would scale back drilling. Hence the number of wells is market based driven.

What your proposal implicitly indicates that a third party, generally less knowledgeable of the conditions and will less current information, makes the decision rather than freely thinking people making free market decisions based on the most current mundane knowledge of conditions.

Darf Ferrara April 27, 2011 at 3:12 pm

Good definitions of property rights sometimes require third parties (governments) to make judgements that can maximize the overall size of the pie. David Friedman’s book Law’s Order discusses this in depth.

W.E. Heasley April 27, 2011 at 10:10 pm

From number of wells drilled to property rights? Exact what party’s property rights are you eluding to.

Chris April 27, 2011 at 1:40 pm

From the timing, it appears that ED C is right — prices started taking off shortly after the Libyan situation started. Had Ghadaffi been allowed to go after the rebels with no interference from the West, the entire situation might have been over quickly, and gas prices might still be under $3.00 a gallon.

Note that I’m not asserting that the Libya action was a mistake — it may be that it was the right thing to do, despite the apparent effects on gas prices.

Douglass Holmes April 27, 2011 at 1:40 pm

Whether or not President Obama is at fault for the current price of gasoline, I still blame him for his attempts to blame the oil companies. He had two years of total, control of the Congress, nearly two years of which was filibuster-proof. If the supposedly $4B in oil company subsidies was an issue, why didn’t he address it then?

W.E. Heasley April 27, 2011 at 1:51 pm

Good question. Simple answer: he doesn’t have a plan.

optimus primed April 27, 2011 at 1:55 pm

No “hero worship”? Are we living on the same planet? The absolute and stunning levels of ineptness in EVERYTHING this President and his administration attempt to execute, all with little accountability, proves the entire thing is irrational hero worship.

If he doesn’t have a larger margin for error than any other successful leader then why has he not been completely marginalized by everyone? And, if he does have a larger margin for error, then why is that so? Because he is a Dem? Because he is an “intellectual” (with no actual evidence of intellectual thought too btw)? Because he is a minority? Or because he is adulated like a celebrity by partisan hacks like DK?

Ryan Vann April 28, 2011 at 2:03 pm

Have to agree with this sentiment. He has even failed his own base on the issues he won their support for (war, civil liberties, etc) and basically just continued the Bush regime, but with more fanaticism and magnitude. It’s a joke that people walk on tip toes around his failures.

Captain Profit April 27, 2011 at 4:18 pm

At the press conference this afternoon, The Bernank said the price of gas isn’t his fault either. Supply and demand, he says. (I’m trying to find the 33% increase in consumption/decrease in production since last year as we speak…)

Bob Landry April 27, 2011 at 6:15 pm

I do beleive Obama does deserve blame for higher gasoline prices (and other commodities in general) due to his weak dollar policy. If the Administration took a 180 degree turn in the opposite direction and credibly pursued a strong dollar (I realize a bold assumption for this crowd in D.C.), I would bet gasoline prices (and other commodities) would begin to fall rather quickly.

Gil April 27, 2011 at 9:41 pm

Based on what, deflation? The real price of oil is the same but nominal prices are going down so it makes for better news?

kyle8 April 27, 2011 at 6:30 pm

I beg to differ. In as much as his policies, and that of the Fed are devaluing the dollar, the direct result is a rise in commodity prices, so he has some input into high oil prices. (not to mention the moratorium on offshore drilling which caused speculators to raise the price of oil futures.)

WhiskeyJim April 27, 2011 at 7:29 pm

Don, I can not agree with your post, for part of the efficacy of markets is that they are particularly adept at incorporating signals into pricing.

On July 11, 2008 crude oil hit a record high of $145 a barrel. On July 14, 2008 George W. Bush signed an executive order lifting a Federal restriction on offshore drilling off the coastline of the United States.

“The Bush plan is a hoax,” Ms. Pelosi said in a statement. “It will neither reduce gas prices nor increase energy independence.”

Four days later, on July 18, 2008 crude oil had dropped to $129 a barrel. By October 3rd it fell below $100 a barrel and by the end of 2008 oil was $45 a barrel.

On February 8, 2011 Barack Obama reversed Bush’s executive order and reinstated the Federal ban on offshore drilling. Crude oil was $86 a barrel. By March 4th it was back over $100 a barrel.

Obama has also contemptuously defied a Federal court order to lift his ban on drilling in the Gulf of Mexico, and the current policy of his administration is highly restrictive. In fact the EPA has recently shut down Shell Oil off the coast of Alaska where they have a $6 billion investment.

Obama is more than a little part of the problem when it comes to the price of oil. Signals matter, especially from highly powerful bureaucracies.

jorod April 27, 2011 at 9:26 pm

High prices are a way of transferring wealth from the US to OPEC. This is a very calculated policy decision. When the time is right- after trillions have been transferred to OPEC – the administration will decide to restore the dollar’s value and thereby enriching OPEC even more.

john thurow April 28, 2011 at 8:19 am

Oil prices are inversely proportional to the value of the dollar. Yes supply demand can affect prices but in this case it is directly related to the value of the dollar which Obama and the Fed are directly responsible for. Obama and congress for signing and voting respectively into place 1.2 trillion dollars of off budget Keysian fiasco and the Fed for funding the aftermath via QE2. OPEC, the war in Libya are not the cause – Congress, The President and the Fed are! The dollar is getting weaker by the minute and so gas prices rise.

john thurow April 28, 2011 at 8:29 am

Follow up:

Yes, oil would be more expensive with a falling US dollar.

The USD is used to trade oil futures as it probably the most dominant currency in use today. Most countries hold a great deal of their foreign exchange funds in US dollars as it seen as being stable in a relative sense compared to other currencies around the world

Plot the rise in gasoline prices vs the Fed QE and you will see the trend.

WhiskeyJim April 28, 2011 at 5:40 pm

The dollar as world currency means a falling dollar = inflation in general, beginning with commodities.

Jake S. April 29, 2011 at 10:25 am

“I think there was considerably less hero worship than a lot of people suggest there was.”
You’re right… The Onion was just Making Shit Up:

(my apologies, DK; it looks like the “REPLY” link has disappeared for me)

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