I understand there may be some folks who are interested in viewing the video, but for technical or time constraint reasons be unable to do so.
Briefly, Dr. Murphy explains the logic behind futures speculation in the crude oil market & its impact on an economy. The argument is modeled after
supply & demand, and as such a basic understanding of the supply & demand model is helpful while listening to Dr. Murphy's argument.
Agree or disagree? The twist occurs when Dr. Murphy owns that, yes, oil speculators drive up the price of crude oil, but then he goes on to describe
such a process as potentially useful. That is not an easy remark to reconcile against increasing fuel cost at the individual level. Maybe something
Maybe, maybe not. Overall my impression is that it's probably not a bad idea for the Justice Department to monitor for fraud in the oil and gas
market. That is, monitor & prosecute fraud and not attempt to regulate fraud. By that I mean--the analogy I have in mind is the regulation of
airflow by use of a valve. There are so many units of air flowing out or there is none flowing out. The units of air flowing out according to the
pressure gauge are approximate, and by way of comparison we could say the same of fraud in terms of severity or its impact on an economy. And so, for
instance, at the justice.gov link provided above there's an awfully smart blurb which reads "to safeguard against unlawful consumer harm" at the end
of the first paragraph. The context pertains to the oil and gas industry, but the implication--insofar as I interpret--is silent acknowledgement that
lawful consumer harm occurs. My insistence would be that the Justice Department monitor and prosecute fraud and not attempt to tweak, dampen,
attenuate, regulate, or whatever the degrees of fraud. I am maybe trying to split hairs with this distinction, but that piece of rhetoric when
balanced with the rest of the document is, in my mind, ambiguous.
Where I think Dr. Murphy's argument takes on its strongest form occurs on/about 09:54. What I appreciate most is that he pushes the idea that free
economic interactions solve and correct economic problems. It's an idea whose base is controversial (e.g. someone who pursues their economic
self-interest benefits others). In the area of increasing fuel price & potential armed conflict with Iran I think he's made a rational case that few
in his profession would disagree with. The question is whether he is right, wrong, or somewhere in the middle?
edit on 2-4-2012 by Kovenov because: (no reason given)
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