American Elephants


NEWSFLASH: Obama Doesn’t Understand the Laws of Supply and Demand. by The Elephant's Child
April 28, 2011, 7:41 pm
Filed under: Capitalism, Economy, Energy, Junk Science | Tags: , , ,

If President Barack Obama were to schedule a major speech tomorrow, and tell the assorted networks  that America was returning to oil production— he was lifting the federal bans on drilling—the price of oil would start dropping the next day.

  • In 2008, Senator Ken Salazar (D-CO) refused to vote for any new offshore drilling.  In a conversation with minority leader Mitch McConnell (R-KY), Salazar objected to allowing any drilling on America’s outer continental shelf—even if gas prices reached $10 a gallon.  Obama named him Secretary of the Interior.
  • In 2008, Steven Chu, head of the Lawrence Livermore Laboratories at U. of California Berkeley, told the Wall Street Journal that “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” he also said “We have lots of fossil fuel; that’s really both good and bad news.  We won’t run out of energy, but there’s enough carbon in the ground to really cook us.” Obama named him Secretary of Energy.
  • During the 2008 campaign, candidate Obama said “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.” And “So if somebody wants to build a coal-powered plant, they can.  It’s just that it will bankrupt them.” He was elected president.

I don’t know if Obama ever took a class in economics, but he seems to be totally unfamiliar with the basic laws of supply and demand.  When supply is restricted, the cost goes up. When the cost of gasoline goes up, so does the cost of everything else.

Goods are transported by truck, and when delivery costs more, the price of your groceries cost more. When the government is busily printing money, the value of the dollar goes down. Oddly enough, the price of gas and the cost of food are not included in the government’s statistics on inflation. You have to keep track of that yourself.

President Obama speaks enthusiastically about his clean, green economy of tomorrow; but he doesn’t seem to understand that windmills and solar arrays produce only small amounts of electricity, which has little to do with transportation, and does not replace gasoline.  Our transportation sector is powered by petroleum, and will continue to be powered by petroleum far into the foreseeable future.  There is no alternative.

Why do I say that an Obama speech turning the energy sector free would start to bring down oil prices right away?  Ronald Reagan did it, and George W. Bush did it.  There is evidence. And the evidence that Obama’s clean, green government subsidized energy will prove to be an effective alternative — ever?  Nonexistent.




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