It seems there’s an extra dose of right-wing perspectives and conservative punditry on the New York Times op-ed page these days.
Yesterday it was a Heritage Foundation fellow lecturing the Democrats on proper and improper ways to mix religion and politics; today it was conservative legal scholar Charles Fried going to bat for Samuel Alito. But the capper, also today, was a strange essay by a pair of Cato Institute fellows arguing that the U.S. strategic petroleum reserve should be liquidated.
Now, this is something that Big Oil has always dreamed of. From a strict free-market economics perspective, there’s even something to be said for it. The reserve certainly holds the potential for distorting the oil market, and if you live in a dream-world in which that market exists outside of the international political system, with all its unpredictable non-economic dynamics, then you will find this a laudable goal. Certainly, in an ideal world — one in which, say, we had a government that understood how important it was to move us away from an oil economy — who’d want the public sector to waste its resources stockpiling oil?
But the piece, by Cato’s Jerry Taylor and Peter Van Doren, is full of fallacies. It seems that, on the one hand, the reserve is so insignificant in size that it can’t really help the nation in a pinch; yet, on the other hand, the reserve is so vast that it distorts the fundamental economics of the oil industry.
If we just do away with the government reserve, they tell us, private industry will do the job for us. “Economists agree that every barrel of oil we put in the public reserve displaces oil that might otherwise have gone into private inventories,” they tell us, then add: “How much displacement occurs is unclear, but there is little doubt that it’s significant.” But wait, they just said that unnamed “economists” agree that every barrel of oil in the public reserve displaces private inventory. That’s not “unclear” at all. Are they even reading their own words?
What the Cato guys completely miss is the first word in the reserve’s name: strategic. The reserve was created in 1975, and anyone who was of news-consuming age then (as I was, and as I must assume these “senior fellows” were as well) will know why. The reserve was created to help the U.S. avoid being blackmailed by foreign oil suppliers. It should have been accompanied by long-term conservation programs and other measures. But its primary rationale was national security, not good economics.
In the wake of 9/11 you’d think such concerns would be at the forefront of conservative thinkers’ arguments. But corporate free-marketry trumps national defense every time when the likes of Cato and Olin are paying your rent. So Taylor and Van Doren tell us (a) oil embargoes can’t hurt us any more because the market’s so globalized; (b) a real catastrophe, like al-Qaida taking over Saudi Arabia, might be “worrisome,” but the reserve wouldn’t be big enough to help us in such a case (this is really an argument for a bigger reserve, but never mind!); (c) we really shouldn’t worry because even anti-American regimes wouldn’t be stupid enough to bankrupt themselves by refusing to sell their oil.
These writers evidently believe that they have explained all possible futures, and yet every one of their scenarios imagines rational economic actors in every role. Before 9/11, you could write that off as amusing folly; today it constitutes tragic stupidity.
There must be an argument going through someone’s head at the Times that goes like this: Their newspaper is under assault from the right, most recently because of its exposure of the Bush administration’s illegal-wiretap power grab; so it must achieve the impression of “balance” by presenting these op-ed voices from the right. But really, to balance the Cato people you’d have to find some wild-eyed leftist arguing that, say, all oil companies should be nationalized tomorrow.
The greatest achievement of the right over the past decade — oh, setting aside the seizure of “all three branches of government” in the wake of a disputed election, the plundering of the Treasury, and the derailing of the war on al-Qaida — is this: By a wide swath of American opinion-makers, “balance” is understood to mean that the usual welter of mainstream American voices needs to be weighed down by a gang of beady-eyed ideologues on right-wing think-tank payrolls who can barely construct a sensible argument.
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