Stein: Stop Whining And Blaming Oil Companies.

From Ben Stein’s CBS Morning Commentary: May 25, 2008

Worried About Gas Prices? Ben Stein Says Don’t Look To Government Or OPEC To Help – (CBS) Like many of the rest of us this weekend, Contributor Ben Stein has his eye on the gas pump:

Topic A on everyone’s mind these days is the amazing price rise of oil and gasoline by historical standards. Herewith, some good news and some bad news.

First, the bad news: Nothing – and I mean nothing – the U.S. government does can stop the rise in the price of oil in the short run. Stopping buys for the emergency stockpile will have no effect at all. These purchases are less than one-tenth of one percent of daily worldwide demand. Cancelling the purchases is precisely the same as not paying life insurance premiums when you’re worried about money. It is nonsense.

Laws taxing oil speculators will do nothing. Most of the speculation is going on outside of U.S. jurisdiction anyway. And if we stopped having a free market in oil, it would go back to being an OPEC-fixed price. Do you think they would be kind to us? If so, why?

Taxing the oil companies is the worst possible idea. We should be giving them tax incentives to pump more oil, not punishing them for pumping oil … and their profits have absolutely zero to do with setting the price of gasoline at the pump.

Zero.

Finally, the worst news: Oil has been going up a lot faster than gasoline. That means gasoline might possibly have far more upward movement in price. Be prepared.

Now for the good news: Oil is a commodity. Usually commodity prices go in cycles. That means they usually (not always) go down after they have gone up sharply. It could and probably will happen this time, too.

In other words, it sure looks like a bubble, although a bubble that might last a long time.

But here’s even better news: You can get a more fuel efficient car; car dealers are very much in a mood to deal, and they will make it easier than you can even imagine to get a fuel saving car or truck.

And, you can drive less. Once in a while take mass transit. You have it in your power to save money on oil.

If everyone in the U.S. does this, it will affect the world demand for oil meaningfully, and will eventually move price downwards.

Or, we can just whine and blame the oil companies, – which will get us exactly nowhere.
© MMVIII, CBS Interactive, Inc. All Rights Reserved.

And another…

Running Out of Fuel, but Not Out of Ideas -
From the New York Times Business Section – BEN STEIN, Published: May 25, 2008

There is Will Rogers, the great sage and comedian, who famously commented during the Great Depression that America would be the first nation to “go to the poorhouse in an automobile.” This doesn’t sound comprehensible now, because driving a car is so basic to American life. But in those days, it was still something of a luxury and a novelty to have a car, and to drive it to the poorhouse was a contradiction in terms.

There are also scenes from the great “Mad Max” movies. In one of them, Australia has been reduced to chaos amid a cruel shortage of oil and gasoline. Men will kill in an instant for a few drops of precious gasoline to power their motorcycles, and life as we know it has stopped because of a deficiency of that magnificent stuff.

Most of all, the images are of the glory of driving cars, cruising through our towns and suburbs, just burning up gas with no particular place to go, to paraphrase Chuck Berry. Or of racing up and down freeways, heading out to the surf on time, with the car’s chrome heart shining in the sun, to paraphrase Neil Young. (Of course, I think of driving my own mighty Cadillac STS-V, hurtling along I-10 toward Rancho Mirage at 130 m.p.h., with my wife urging: “Great. Go faster.”)

Gasoline is unimaginably important in our lives in the United States. Without gas in virtually limitless supply, and at prices we could afford, American life would change. We could no longer afford to live so far from one another and from our jobs. We could no longer afford to cruise in cars incomparably larger than those of our counterparts in Europe and Asia. In a way, we would stop being America as we know it.

Maybe this would be a good thing. After all, do we really need to have a 6,000-pound S.U.V. take a 100-pound high school student across town to buy a Diet Coke? Do we really need cars so big that they have flat-screen televisions for the children in the back? Do we really need to pour so much carbon dioxide into the atmosphere? And it’s certainly not great to belch out immense quanta of carbon monoxide, a deadly poison.

But we have become addicted to gasoline. (I, of course, include my own bad self.) Even if we all bought smaller cars, we would need gasoline and lots of it — although a great deal less than what we use now. And while I have previously said, and I believe, that we are in a temporary price bubble, the prognosis for gasoline is grim in the long run.

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