George W. Bush and John McCain claim that offshore drilling will reduce oil prices because of a psychological benefit. If we think oil will get cheaper, then it will get cheaper.
Even if this is true (which it probably isn’t, because commodities traders are not idiots), the problem with attempting to manage oil prices by instilling mass belief in something other than the stark reality of decreasing oil supply is that when people realize that the drilling isn’t going to help, the likely effect is overreaction in the opposite direction as the market panics to reassert itself.
Or, more simply, it is like this:
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Well, I can see something of an underlying point to their idea of a psychological benefit, in the sense that I think oil’s in a bit of a bubble right now (for the benefit of a hypothetical person who doesn’t know, that means that enthusiasm over potential profits has caused prices to rise above a reasonable expectation of returns.) So news of a new source of oil might pop said bubble and correct prices to sane levels.
But then again, so would electing a Democrat who isn’t a former oilman, and might be expected to actually do something about skyrocketing oil prices instead of letting “the magic of the free market” correct it all. And it would do it without needing to wreck the entire coastline with offshore drilling. (In regards to vital commodities with a small number of suppliers, the “magic of the free market” works a lot like the “magic” the Joker showed off near the beginning of ‘The Dark Knight’, with the Joker as oil producers and his victim as everyone who needs oil.)
So I think what I’m saying is that I think McCain/Bush are slightly less wrong than you do…but it’s a long distance over a deep drop from there to right, and like the coyote, you won’t be able to get across by running over it with your eyes shut.
Ah, but didn’t you always secretly hope he’d catch that roadrunner, just once?
Was “I’m not listening, la la la la Economics” taken?
So, like, if I clap my hands and exclaim how deeply I believe, I’ll be able to fill my tank tomorrow morning for ten bucks?
Nah. Dubya is stone stupid and McCain is well on his way to senility and dementia. I’d say I think they just read Peter Pan one too many times, but that assumes their literacy, and that’s a leap I just can’t quite make.
The placebo effect doesn’t work if you tell the patient it’s a placebo.
Oh, well. Can’t wait to tell my grandkids about how water used to be see-through.
Y’know, I don’t think I can ever look at a Roadrunner/Coyote cartoon the same way after reading Animal Man #5.
Chuck Jones for the win!
If we threw Bush and McCain offshore, How much of a psychological benefit would we get?
“because commodities traders are not idiots” – Ooooh…. and your argument was going so well up until then. These are the same berks who drive prices up because of “uncertainty” and “sentiment” neither of which are constituents of hydrocarbons. And I should know…. I make my living looking for them.