Friday, June 27, 2008

CT-5 candidates on oil prices

The Bethel Beacon ran an interesting article on the positions of the two major party candidates for the CT-5 (Chris Murphy - D & Dave Cappiello - R). The article is focused on the idea of increasing domestic oil production and says both candidates support the idea... though they do have differences.

As I've said before, I'd rather deal with environmental problems here in the US... than deal with the problems in the middle east.

Regardless, what I found most interesting about the article was buried deep... right at the end:

On a separate part of the issue, The New York Times has reported that some congressmen believe that "pension funds, Wall Street banks and other large investors that have no intention on taking delivery of fuel have increasingly pumped money into contracts for oil and other commodities as a hedge against inflation when the dollar falls." (by Scott Beacon)

Therein lies one of the biggest problems facing America today... our inflationary monetary policy.

But rather than address the root cause of inflation (poor monetary policy ruled by The Fed and the Treasury Dept), both candidates seem headed toward more regulation:

"I think there is reason to believe that rampant investor speculation is driving up the price by 20 to 30 percent," Mr. Murphy said. He said that U.S. House Democrats are considering legislation that would require higher margin requirements and stricter position limits.*

Adam Bauer, Mr. Cap­piello's communications director, said that the GOP candidate also wants Congress to review the investment speculation on oil "to see if it is being abused."

Sounds great and I don't fault either of them for this... heck, they may both have well-formulated philosophies on monetary policy and be able to clobber me in a debate with their views on the benefits of central banking. But I come from the "cause & effect" school of thought.

And if inflation causes speculation in the trading of oil futures... then what causes inflation? Isn't that the question that needs to be addressed by Congress?

The answer lies in Ron Paul's new book The Revolution - A Manifesto:

Ludwig von Mises used to say that governments will always try to get people to focus on prices when thinking about inflation. But rising prices are a result of inflation, not inflation itself. Inflation is the increase in the money supply. If we understood inflation that way, we would instantly know how to cure it: simply demand that the Federal Reserve cease increasing the money supply. By focusing our attention on prices instead, we are liable to misdiagnose the problem, and we are more apt to accept bogus government "solutions" like wage and price controls, as in the 1970s. (p. 144)

Whether or not your philosophy on monetary policy is similar to mine... I do subscribe to this part of Ron Paul's philosophy on monetary policy. And if the NYTimes is right about inflation being partly to blame for the runup in gas prices... I can only conclude that our #1 priority should be inflation... not speculators (even if they are a bunch of greedy jerks).

Let's return to a gold standard, end inflation and begin to address these ever-rising gas prices.

Tim White

p.s. I'm not sure where Green Party Harold Burbank stands on domestic oil production or US monetary policy.

* This comment is, IMO, profound. Since I'm not extremely well-versed in this arena... I don't necessarily disagree with the idea of "higher margin calls," but the comment about "stricter position limits" is troubling to me. It just sounds too much like "rationing" or, as Ron Paul reminds us... the wage and price controls of the 1970s.


Anonymous said...

Just enter your zip code in the site below, and it tells you which gas stations have the cheapest prices (and the highest) on gasoline in your zip code area. It's updated every evening.

Be a good neighbor and pass this along

Submitted by: Mike Rocci

Anonymous said...

Tim, let's move on from Ron Paul agenda. We are going to abolish the Fed about the same time as we invent perpetual motion.

Maybe a more immediate issue is why our Senator from Countrywide wants to allow the Fed Board to be full of vacancies

Anonymous said...

Chris Murphy's whacko Washington DC allies blamed Nancy Johnson for high gas prices in April 2006

At that point gas was $3 a gallon. My last fillup was at the cheapest station I could find in Southington at $4.28/gallon

Moveon gonna complain about Murphy's failure on this front?...oh sorry, he did do something...he voted for the state gross receipts tax hike that the legislature just repealed

Anonymous said...

Tim, I apologize right now for slightly changing the subject matter but I'm a bit pissed.

I just received my property tax bill in the mail today, now I'm not surprised at the amount, I made that calculation as soon as the Dems raised the mil rate months ago.

What makes me angered is several items on the reverse side of the bill. Cultural Services and Leisure Services are lovely to have....when we can afford it! The way I see it: that's $3,206,232.00 that could have been deferred until the economy picks back up.

Now, for the cream on the cake. For the first time as a resident of Cheshire there's a large note from our Town Manager informing us that HE and the Democrats lowered the mil rate by .79 by using nearly $2,000,000.00 from the Town's Fund Equity Reserve Account.

Now, when I heard that Mr. Milone was going to have this printed on the bill I thought that someone one the Right would object to this notice. It is not subject to any state or federal law that mandated it should be there.

Now, either the Republican Town Council members are much smarter than I, which is probably the fact here, I hope, or the TM passed one over your heads.

This FUND EQUITY RESERVE ACCOUNT belongs to the tax payers of Cheshire. So the TM took our money and offset the mil rate. If some people don't realize this it looks like we have a wonderful TM and Democratic lead Town Council.

I'm hoping that you all let this be approved so that the residents of Cheshire with some knowledge knew this fact and would be outraged like I am that the TM is using our tax money to make himself and the Dems look good to the residents of Cheshire.

This is a crock of you know what. M&M could have deferred the two General Government line items listed above for another tax year and actually would have came close to NO mil rate increase at all. I guess his ego is running how things are done in this town. I take that back, I meant to say I know it does!

You can talk to me in person to let me know that the Republicans on the Council approved this printed notice to "out" the TM and his scheme to try to pull one over on us tax payers.

I wrote Mr. Milone a short note about the above fallacy and will include it with my payment before the July 31st drop dead line.


Mike Rocci
Tax Payer

Anonymous said...

I don't mind paying my taxes. It's the right thing to do and a tasty way to do it.