Wednesday, March 21, 2012

On gasoline speculators driving up prices

This is BRILLIANT.  Don Boudreaux at his best:

Here’s a letter to the Programming Director at Washington, DC’s, WTOP Radio:

During this morning’s 8 o’clock hour I heard one of the most ironic lines that I’ve heard in some time. That this irony was unintentional makes it all the more telling.

Asked by your “pump patrol” reporter about rising gasoline prices, a motorist at a gasoline station noted that “My tank is actually way more than half full now. I’m topping it off because I’m sure the price will be even higher this weekend.” When your reporter then asked her “What do you think explains these rising prices?” she replied “Speculators.” Your reporter followed up with “Do you think they should be stopped?” The motorist responded immediately: “Of course! They’re criminal.”
Speculating that the price of gasoline will rise, this motorist took action today – buying gasoline that she otherwise wouldn’t have bought today – that puts upward pressure on the price of gasoline today.

Had your reporter pointed out that this motorist herself is speculating in gasoline, I wonder if this motorist would have persisted in regarding speculation as being criminal. I wonder, too, how she would react if government – heeding her advice to stop speculation – were to forcibly prevent motorists from topping off their tanks.

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

And that is why I want to somehow make a lot of money and retire and go study economics at George Mason University with Don Boudreaux, Russ Roberts, Tyler Cowen and Walter Williams while they all still live and breathe and walk among us. 

The "Make The Speculators Pay" logo came from this unrelated article about the European Union trying to blame their troubles on people other than themselves.


Invisible Backhand said...

That’s not speculation, that’s cost averaging. Boudreaux knows it’s misleading, that’s why he said it.

Funny how he never mentions that his employers, the Koch brothers, are in the oil speculation business.

Don Boudreaux is just a Koch brothers shill.

The Whited Sepulchre said...


Thanks for your comment. When I first started this website, the Koch brothers were just a pair of wealthy industrialists who supported a wide range of Libertarian-ish causes. We ran one of them for president back in the 1980's. They funded Reason magazine, helped Radley Balko get several wrongly convicted black guys out of jail, opposed the Drug War, the bailouts, TARP, etc.
All of us - the Libertarians, the Koch brothers, etc. - pretty much labored in total obscurity.
Now, thanks to the Statists needing enemies that aren't politicians, we're all evil geniuses, funding academics and oil speculators from inside our hollowed-out volcano.

One other thing....speculation is buying something now, because you think it's gonna be worth more later. It doesn't matter if it's for yourself or to be sold later. The customer at the pump was a speculator.


Not The Koch Brothers

Invisible Backhand said...

Don't flatter yourself - a genius would pick a text color that stands out from the background.

On other thing: the dictionary doesn't agree with you. They just can't 'name it and claim it' like you.

Dr Ralph said...

Oh snap!

I think this is going to be fun.

Invisible Backhand - welcome to the Monkey House.

The Whited Sepulchre said...

Bitch-slapped by an invisible hand,

I agree with definition #2. She was buying now, in hopes of profiting due to market fluctuations. Just like the Evil Koch brothers do, or when you buy a little more at the grocery store when it's on sale. After all, you might not find a deal like that again.

If we're going to play Dueling Links, check out the first line of the 4th paragraph of this puppy.

Do yourself (and the rest of the nation) a favor.... Get off your ass, get a job, quit obsessing over the Kochs, don't worry about offensive color combinations on blog headers (Seriously...nobody gives a shit) and go try to get a passing grade in ECON 101. I wouldn't try GMU again, though.

Pogo said...

Quite a lot of sturm und drang over a very simple definition: "Speculation is the art of capitalizing on politically created distortions in the market."

Invisible Backhand said...

Since you're a genius, I shouldn't need to explain what CSS stands for, amirite?

And since you chose #2, you should know you can't profit from expenses for consumption. You're thinking of assets. The difference between expensing and capitalizing is important. Accounting 101.

Let me cut it into baby sized pieces for you. Putting gas in a car is expensed. Putting a new engine in a car is capitalized. Capiche?

Still not getting it?

Buying a million gallons of gas to put in your fleet of cars is an expense.

Buying a million gallons of gas to trade is an asset.

Do try to figure this out before you bankrupt your company, dumbass.

ΛΕΟΝΙΔΑΣ said...

How interesting! Looks like the "boomerang" has started a brand new blog for the major purpose of venting ad hominem arguments/excuses?. GMU must have been a living hell.

Invisible Backhand said...

P.S. Now do you get why I said "Boudreaux knows it’s misleading, that’s why he said it."?

Because knows he's lying. He's a useful LAIR.

You don't know he's lying. You are a useful IDIOT.

Dr Ralph said...

Dr. Boudreaux, the consummate Glibertarian, ever ready to confuse and distort the issue...

The obvious difference is the the woman filling her gas tank will use the gas, not siphon it out of her tank to resell. She is attempting to reduce risk. The speculator is not purchasing it to use - they are purchasing it specifically to resell at what will hopefully be a higher price.

By the way, I have photographic proof that Don Boudreaux is the Devil himself.

The Whited Sepulchre said...

Ron Boudreaux,

There are lots and lots of ways to use gasoline. But everyone involved in this beautiful parable is engaged in speculative behavior.
I get the emails all the time when fuel prices start going goofy. "Fill up your rigs NOW before diesel goes up .35 cents !!" Sometimes I fill up all the tractors (speculating) and sometimes I don't. Ditto for my own truck. Whether I do this in hopes of profiting from reselling the diesel later, or running at a lower cost now matters not a whit. I'm speculating that I can increase profits now by buying something now that I don't really need now.

Also, in regard to Don Beaudreaux's failed student.... Sir, I browsed through your website for a while. Was Econ 101 really that tough? There's a beautiful, wonderful world out there, and there are more important battles to fight than this one. Whenever I log into my statcounter to see how many people have visited recently, and see something like this where you're logging in every 30 minutes to see if I've responded yet, it concerns me. I hope you can find a way to move on. Reed College in Oregon might have an Econ Dept more to your liking.
Seriously. This below is crazy.

The Whited Sepulchre said...

Here's an eight hour period of your visits to this site that I saved yesterday:

Don Beaudreaux’s Bitch
Comcast Cable ( [Label IP Address] 0 returning visits
Salem, Oregon, United States

(No referring link)
23 Mar 09:49:10
(No referring link)
23 Mar 09:52:58
(No referring link)
23 Mar 09:54:12
23 Mar 10:04:44
(No referring link)
23 Mar 10:05:28
(No referring link)
23 Mar 10:11:59
23 Mar 10:13:17 (Exit Link)
(No referring link)
23 Mar 10:33:29
23 Mar 10:33:47 (Exit Link)
(No referring link)
23 Mar 10:38:36
(No referring link)
23 Mar 12:06:57
(No referring link)
23 Mar 13:19:01
(No referring link)
23 Mar 14:07:34
(No referring link)
23 Mar 14:44:24
(No referring link)
23 Mar 14:44:37

Dr Ralph said...

Esteemed debating partner: I fear I must disagree - it *does* matter whether you are purchasing to protect yourself against future price increases or just to profit off those price increases. Saying it doesn't matter doesn't make it so. Context is everything. To claim otherwise is disingenuous.

It's a little like claiming (for instance) that the difference in shooting someone in self-defense and shooting them just because you don't like the looks of them doesn't matter. Granted the dead person is still dead, but the context is going to matter a great deal to the person holding the gun.

Oh yeah, and while you bow before the wisdom of Don Boudreaux, he strikes me as a pompous, self-important windbag. Neither of us has first hand information to support our opinions. At least his former student has had the experience of putting up with him in person. So cut him some slack.

Say, why *does* Dr B continue to suckle at the teat of the taxpayers of the state of Virginia? This seems at odds with his Libertarian pronouncements.

CenTexTim said...

I hesitate to jump into this shark-filled pool, but I would like to make one comment in response to Dr. Ralph's statement that " *does* matter whether you are purchasing to protect yourself against future price increases or just to profit off those price increases..."

If I make a purchase to protect myself against future price increases, the underlying intent is to reduce my expenses. Reducing my expenses increases my profit. So the intent, and the end result, is the same. What is the difference?

Please, be gentle...

Dr Ralph said...

CenTexTim - I would never be anything but gentle with you.

Let me just say, while I do have plenty of expenses, when I fill up the tank, I'm not thinking of profits, since I'm not running a business - not now anyway. I'm also only buying 10 to 15 gallons at a time at the gas station, not gasoline futures, of which I'm never planning to take delivery.

Okay, I've said pretty much what I have to say. The rest of you settle this brouhaha without me. I doubt I'm going to change anyone's mind anyway.

Invisible Backhand said...

Whitetrash Speculator

Loved the climbdown to "specualtive behavior". Are you going to go the full tard and say 'weapons of mass speculation program related activities next? I bet in your fantasies you are and important and respeced person too.

"I put diesel in my truck, I'm a speculator hyuck hyuck hyuck!" I can tell you live next to Jed Clampett, a fictional character who was more of a speculator than you are.

You got a lot of visits because your wingnuttery was worthy of TWO blog posts:

So don't flatter yourself (again). A normal person would sub to the rss if it was that important (it isn't). What, blogsnot won't let you track those?

Counter queens are SOOOOO 2002. Why didn't you show the referrer, too many libertarians come straight from

Congratulations on learning iplookup. I notice simple web design is still out your league though. Do you really want a free humility lesson? I can provide.

Anonymous said...

So, do we have to die of old age waiting for you to think up a witty retort?

The Whited Sepulchre said...

Wow !!! I have now beheld the awesome power of The Invisible Backhand.
Fortunately for my health and general well-being, it doesn't make a statcounter budge. (It's invisible, you see.)

Here are the stupendous hits from The IB's Reddit post....

3 Hits​stupid​_it_burns

But dang it, all three of them are from me. I wanted to limit it to two, but it was difficult to find two Reddit hits amongst the other traffic sources. BTW, Reddit gave your effort one whopping upvote (yours?), and one downvote.

Regarding any proclivity of mine for and "Counter Queens", all I'm going to say is "Dr Ralph, this guy is on your side, not mine."

Regarding the general appearance of my site....See all the blogs that I like on the bottom of the right sidebar? I've been meaning to fix the appearance of that for about a year. I've been meaning to purge my blogroll of dead links for about two years. But I'm busy. And to most people, it....just....doesn't....matter. And I've generally found that discussions about web design are kryptonite.

What matters is content. Can you write? For God's sake, son, can you please, please learn to spell? Especially in your blog post headings? Do you want to be known as the dude who called Greg Ransom "Retrarded"? It doesn't matter if you think Boudreaux is a "USEFUL LAIR" if people are laughing at the spelling.

Hell, I don't get as much traffic as I used to, because I'm busier. I have a life. Maybe one day I'll fix the offensive header. Maybe not.

In the meantime, I hope you'll get past your Boudreaux obsession.

So tell us, which classes did you fail? Where are you enrolled now? Where do you work? You obviously can speak the Econ language. My last really good troll (Cedric Katesby, God love him) apparently lost his funding from the U.N.'s Climate Change Group, and we miss him terribly.

I try to do a Boudreaux/Roberts post every couple of weeks. Hope you'll come back.

p.s. - Blogspot shuts off comments on any post older than two weeks. If that happens, I'll go in and release any comment you submit that's relevant and doesn't go overboard on the Genius/Idiot/Dumbass business.