Sunday, February 26, 2012

They should sell it to me for less because we live close to each other !!!

Don Boudreaux teaches economics at George Mason University, the place where I'm going to get a Doctorate in Economics if I ever win the lottery and can afford the tuition.  Boudreaux has written a beautiful letter to Bill O'Reilly of Fox News. 

This letter should be studied by schoolchildren everywhere. 
Boudreaux and Russ Roberts are the proprietors of the Cafe Hayek blog. 
Here goes: 

Mr. Bill O’Reilly
The O’Reilly Factor
Fox News
New York, NY

Dear Mr. O’Reilly:

You’re all lathered up because U.S. oil companies are exporting much of their refined gasoline and heating oil to other countries and thereby putting upward pressure on fuel prices here in America. You conclude that these companies have a moral obligation not to export so much.

Your economics is wrong and your ethics convenient.

First some economics. Selling in the global market encourages firms to build larger factories and refineries that, in turn, enable outputs to be produced at lower costs per unit. So while in the short-run rising exports of oil products can cause fuel prices here to spike, the long-run effect might well be lower prices because of larger, more-efficient scales of operation. Also, more exports of fuel products means more imports of other goods and services. The result is lower prices in America for consumer goods such as clothing and furniture, as well as lower prices of inputs such as steel and industrial machinery used by American factories.

I was amused, by the way, that in your Feb. 17th discussion with Lou Dobbs, Mr. Dobbs shared your anger at rising U.S. oil exports. This is the same Mr. Dobbs who repeatedly complains that the problem with America’s involvement in the global economy is that foreigners stubbornly refuse to buy sufficient amounts of American exports. Go figure.

Now about your ethics. You’re paid so handsomely because there’s a large nation-wide demand for your commentary and bombast. In your career you’ve worked for broadcasters in Boston, Dallas, Denver, Hartford, and elsewhere. And before moving to Fox you were a correspondent for ABC News. You apparently never hesitated to sell your product to the highest bidder; you never hesitated to export yourself from one market to another in search of higher pay; you never resisted the bidding for your services by buyers (i.e., employers) far and wide which put upward pressure on the amounts of money that you are paid, both to appear on television and to deliver lunch and dinnertime speeches.

Get ready!!   Here comes the Don Boudreaux Karate Kid Crane kick !!!!!!!

So I ask: are you guilty of an offense against those many Americans who – as a result of your responding to market signals regarding the value of your services – must now pay higher prices for the privilege of hearing your commentary? Should you return to your long-ago job at a local Scranton television station, at your long-ago lower salary, and apologize to the good people of Lackawanna County for your greedy and evil habit of exporting yourself to wherever and whoever offers to pay you more money?

Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

Don Boudreaux.  Often imitated, never duplicated. 

The coffee mug shown above was a gift from Dr. Ralph.  His son goes to GMU. 
The picture of Don Boudreaux morphed with Dr. Ralph came from Dr.Ralph.  It's one of the most bizarre things I've ever seen, despite serious competition from some incidents in my Mississippi childhood. 
At 2:00 this afternoon at The Corporate Image 5418 Brentwood Stair in East Fort Worth, I'll be playing guitar and singing with Dr. Ralph. 


Z said...

I almost agree with the sentiments of his letter with a minor exceptions. The government (that is your money and mine) is supporting the oil industry with tax breaks and other methods while they are making record profits in the middle of a world wide recession. If they can do that without using my money.. meh. The fact that they do get some of my tax money to make record profits while I pay higher gas prices (and in fact higher prices for everything) is the problem. You can state and restate the facts all you want but as long as my taxes are helping oil companies create huge wealth for themselves while I suffer higher living costs then I'm against them, or at least their current business model. I'm not a socialist but that doesn't mean I like being bent over the barrel by big oil companies and my government. The French Monarchy found out what a free market is like when disparity happens on grand scales.

I fully support nuclear power and electric vehicles. As soon as there is a viable option I will not be using petroleum fuel. I will attempt to not use petroleum products when I can - knowing full well how difficult that will be. I do this not simply because I do not like what the oil industry has done but because peak oil is a reality, or will be at some near future date. That is the reality facing big oil. I'm not alone in thinking this way either.

The letter argues against a particular complaint and I agree that the particular complaint is silly but the situation that precedes it is not silly. Give me back my taxes that were given to big oil.

Oh, yes, lets get our tax money back from Wall street too. It's not just big oil that has been breast fed on my tax money.

The Whited Sepulchre said...

....and the tax breaks given to ethanol. And the protective quotas that protect Big Sugar. And the tax breaks given to Big Green. And the protective quotas protecting some corn products. And on and on and on.