Friday, July 25, 2008

McCain’s Contradiction

As of now, neither of the candidates has distinguished themselves economically. Obama, with his meaningless economic drivel and slogans that should have died in the 1970’s; And McCain, with the blatant inconsistencies typical of Conservatives.

Take this for example: McCain at one point mentioned that high gas prices where solely the fault of spectators, and that an investigation should proceed; another time he mentioned that he credited Bush for the drop in prices. As Boudreaux at Café Hayek mentioned:

Sen. McCain can't have it both ways. Oil prices either chiefly reflect the underlying reality of supply and demand or they don't. If baseless speculation caused oil's price to rise to heights unjustified by supply and demand - if speculators are financial sorcerers who detach prices at will from underlying economic realities - how does a presidential announcement signaling higher future supplies cause lower prices? On the other hand, if a more promising prospect of greater off-shore drilling really is responsible for pushing oil prices downward (which I think more likely), why would Sen. McCain ever have blamed high oil prices on evil speculators rather than on the underlying conditions of supply and demand?

True, in the end the spectators are basing their purchases and sales on what they believe will be the future price of gas; in the end, the futures market is very beneficial to the price of oil. Though Boudreaux fully admits that spectators can drive up prices:

Note that I'm not saying here that speculators cannot drive prices to heights (or depress prices to depths) that are, on some reasonable calculation, inconsistent with the underlying conditions of supply and demand. I concede the reality of bubbles, both positive and negative.

Exactly, the change in prices by spectators can go both ways. The point is; McCain is merely trying to gain supporters, by attacking popular enemies; rather then sound economic reasoning:

….McCain is playing politics (duh!) to scream "evil speculators" when oil prices are rising and then announce "supply and demand" when oil prices are falling.

This is not good news, a person so willing to sacrifice good thinking for the sake of politics can’t be good economically for the country; he will likely to bring about the same mixed economics which has caused so many problems in the past. Earlier this year, McCain mentioned offhand that Russia should be barred from G8; All I can hope is that he wasn’t serous, as this would cause an enormous amount of problems.

Of course, the President’s control over the economy is not as great as people think; they have much more control over foreign affairs. This can bring anybody some peace, as their options- McCain and Obama- seem just different shades of economic grayness.

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