Monthly Archives: April 2006

Russert Perplexes Us All

Tim Russert discussing the price of gasoline with Energy Secretary Sam Bodman:

MR. RUSSERT: Mr. Secretary, if, if demand is up but supply is down, why are the profits so high?

MR. BODMAN: For that reason.

The response wasn’t good enough for Russert.

Expose the Left has the video.

More:

Here were stock guru Jim Cramer’s thoughts:

MR. RUSSERT: Jim Cramer, you are renowned capitalist. What do you think of all this?

MR. CRAMER: Valero was able to buy its largest competitor; the government looked the other way. Valero is running its refineries, though, 105 percent of the time. They’re ‘round the clock. We have 100–we have 140 refineries in this country; we had 350 refineries 20 years ago. We have a huge refinery problem, and you can’t build them. And it’s not a federal government issue. It’s a local government issue because no one wants a refinery next to them.

MR. RUSSERT: So what we have is lack of refining capability…

MR. CRAMER: Right.

MR. RUSSERT: …an increased worldwide demand, ethanol being added and blended in…

MR. CRAMER: Without preparation.

MR. RUSSERT: …and do you believe the oil companies have been adding on a little bit extra profit?

MR. CRAMER: I, I think if they could drill they would drill. If they could refine more, they would. These are companies that are run for the shareholders, but they’re run to be able to produce as much oil as we can possibly use. They want to do that. Lee Raymond, he, he generated $67 billion in profits for his shareholders. I think that that’s a reasonable return, $144,000 a day. Katie Couric makes $85,000 a day. What value has she created vs. 67 billion by Lee Raymond?

Yet more:

Meanwhile, in a completely unrelated post, Greg Mankiw gives an example of a fundamental attribution error:

Example:

Why did I raise my price? Because demand increased more than supply.

Why did the gasoline station raise its price? Because oil companies are greedy price gougers.

John Kenneth Galbraith (1908 – 2006)

Although he stood six-feet, eight inches John Kenneth Galbraith’s height had nothing to do with the fact that he was larger than life.

Although Galbraith was an economist, he was much more than that. Galbraith was an ambassador, a political advisor, and an author. He worked for Roosevelt and Truman and was a very close advisor and friend of President John F. Kennedy.

He was extremely intelligent and wrote with such ease. There are few books that are considered classics in the world of economic history, but Galbraith’s The Great Crash, 1929 was undoubtably one of them.

While right-wing economists have long argued with Galbraith’s policies, one cannot deny the influence that he had on economic policy.

On Galbraith’s legacy, Paul Samuelson stated:

Ken Galbraith . . . will be remembered, and read when most of us Nobel Laureates will be buried in footnotes down in dusty library stacks. [1]

J.K. Galbraith was 97.

1. Parker, Richard. John Kenneth Galbraith: His Life, His Politics, His Economics. Harper Collins, 2005. pp. 645

More here:

— Wall Street Journal
— New York Times
— Boston Globe
— NPR
— Washington Post

Blogosphere:

“I have long been a fan of Galbraith as a person, even though I disagree with almost all of his conclusions as an economist.” — Greg Mankiw
— Brad DeLong has posted his review of Galbraith’s most recent biography.

Oil Profit Margins vs. Other Industries

Via Texas Rainmaker. He also notes, “It’s beginning to look more and more like we only have one policital party in Washington… and it’s not one I really care for.”

Dr. Detroit

My latest article looks at the current reforms in Detroit:

The strain on Detroit’s budget has caused many in the city to rethink the role of government. If the city is successful in its reforms, however, it could become a model for reducing bloated budgets across the country.

Continued at TCS Daily . . .

Cartoon of the Day