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.