Timmy Elsewhere

At El Reg.

Why is Gordon Brown being so silly as to try and reduce oil prices?

12 thoughts on “Timmy Elsewhere”

  1. That’s a bit of a dog’s dinner of an article, Tim.

    What in heaven’s name does this mean?

    “even in the US gas prices are now above their optimal level in respect of climate change”

    The optimal level is the market price plus an amount to cover externalities, isn’t it?

  2. It’s actually a pig’s breakfast and Tim’s articles at the Reg are one of my favorite things in this world. He should write there daily.

  3. You say that speculation isn’t the reason for the high oil prices, as there are no great inventories being built up; but, as
    Anatole Kaletsky
    points out today, speculation isn’t necessarily in the physical oil itself, but in derivatives thereof…

  4. To summarise:

    Brown is foolish to suggest there are supply problems because the Magic Pricing System ensures that supply and demand are perfectly aligned. Duh. This, in spite of the fact that the supply Brown was referring to is set by… a cartel named OPEC, not the Magic Pricing System. In fact, there can clearly never be supply problems in the presence of a price fixing cartel, because demand will match the price they set. Isn’t economics great??

    But, er, we could battle OPEC (even though they have nothing to do with anything) by additional taxes, except people apparently won’t pay more tax on fuel. So, er, we can have no policy. Never mind.

    Another possible source of price rises would be speculators, who would be doing us an enormous favour, because they would be anticipating future price rises (again, ignoring OPEC’s role and assuming Magic Pricing). They’re not doing this, but it would be wonderful if they did, because they are part of the Market, and the Market is GOOD. We should thank them just for being there.

    And, er, if we again ignore the effect of OPEC, then we can conclude that “markets alone, so far entirely unaided by the plans of mice or men” (so poetic!) have sorted everything out vis a vis global warming (even though the previous Worstall plan was unfettered growth in order to be jolly rich in the future). Hurrah. But, er, if the price goes down we should put up taxes to a point above where people are prepared to pay them.

    Um… the market is God and, er, yoghurt knitters knit yoghurt. They eat lentils! [Add additional 1970s stereotypes to taste] Hur hur!.

    Tim adds: Amazing! finally, you understand!

  5. Eva:
    “[Mr Brown is] a drowning man clutching at anvils.”

    Brilliant! That perfectly captures the combination of panic and comical incompetence that is Mr Brown’s premiership.

  6. Amazing! finally, you understand!

    Oh, absolutely. It is a shining model of unmuddled thinking:

    The market solves everything, even where a market isn’t the determining factor, and even where the problem we think we have isn’t a problem. We should in any case solve this non-problem by non-market means which are not acceptable to the public.

  7. It’s worth remembering that Tim believes the Market is entirely wrong on the correct price of oil (it has massively overpriced it) and so I suspect the piece is meant to be tongue-in-cheek.

  8. Is it not the case that there are limits set on the supply of petrol and diesel by refinery capacity? I believe we currently have a refinery shortage (due to the fact that everyone complains if you try and build one anywhere near them, ’cause they’re ugly and smelly). Therefore, there is a maximum petrol supply which is independent of oil supplies.

    Odd to see you writing what looks very much like a defense of cartels, Tim. You’re right that it’s a hell of a lot more difficult to stop nation-states price-fixing than supermarkets, but that’s no reason to complain when the Prime Minister criticises it. I mean, what isn’t to criticise about OPEC? And Stuart’s surely right: how can you claim the pricing mechanism is working normally on a good whose price is fixed by a cartel then taxed more heavily than almost anything else?

    And Kaletsky’s right about derivatives, certainly. You don’t need a stockpile for speculation.

    Tim adds: Cartels…yes, OK. But we’ve got huge efforts going on to increase the price of fossil fules via cap and trade, carbon taxes and so on. Literally trillions upon trillions of dollars over the years. And the cartel is already doing what we want, making oil more expensive. I do point out that if the price starts to fall, we should increase taxation so that retail prices do not. If I were to write the again I’d change the emphases…to point out more strongly that Brown is railing against a situation which he is striving mightily to acheive by other means: raising the costs of fossil fuels.

  9. Yeah, well, Brown’s complaining is making the point quite well that modern environmentalism has just turned into a front for Socialism. He doesn’t want oil prices to be higher; he wants them to be higher via taxation. For the environmental movement, who see Capitalism as evil, no price-rising mechanism other than taxation is morally valid.

    But we knew that.

  10. An increase in the price of oil via taxation is not a net loss of income to the country, however, unlikely an increase in the price of oil.

    By the way this of course wouldn’t be true if we were still a net exporter – I don’t think we are, but surely we are only a small importer still?

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