it's just common sense

The musings of an over qualified white male on matters of media, music, science, politics, etc, that are patently obvious.

Monday, September 20, 2004

7th Grade Quiz: The Law of Supply and Demand

Sunday, September 19, 2004

Lessons From Grammar School: The Law of Supply and Demand and US Energy Policy

As I learned the law of supply and demand sometime before exiting the 8th grade, it seemed so utterly simple and self evident. It was intuitive to me in the most obvious of ways. For those who remember the term, but may be in need of a review, let me engage in a short summary. The words alone will illustrate its completeness and utility. As the supply of goods decreases, the prices of those of goods will rise. The inverse of course is also true. When the supply of goods rises, exceeding demand, the prices for those goods will fall. Stated another way, when supplies are finite, prices will eventually rise unless demand is suppressed. Again the inverse obtains. Goods in infinite supply will not command higher prices.

The law has been used in countless ways over the course of time and study, explaining everything from inflation, and government price controls to many a Madison Avenue advertising campaign. How is it then that something so useful and unassailable in its logic remains ignored with respect to US energy policy?

Petroleum is a finite resource, and therefore as most any 7th grader can tell us, unless methods of curbing our thirst for this resource can be found, then prices for petroleum products will rise as time goes on. The 1973-74 Arab Oil Embargo was a very large illustration of the law of supply and demand for most Americans. These events caused an unusual introspection where the words reduce, reuse, and recycle actually became part of our national lexicon. They were accepted terms for a time that even carried patriotic overtones. The can do attitude associated with our national character included these ideas, and our political and legislative climate reflected this.

These trends culminated during the presidencies of Gerald Ford and Jimmy Carter. By the late 1970's there were even regulations that guarded against the excessive heating and cooling of public buildings as a way to save precious, finite petroleum. (Those regulations are long gone, thanks to the Reagan Revolution's notions of an invasive government, but to this day, I personally cannot walk into a cold movie theater in July, donning my sweater, and long for more sensible days when such waste of resources was recognized).

Those years were also a time, when our national introspection led us to believe that perhaps it was not really prudent to be driving such large fuel drinking automobiles. With equal importance our national will told us that we could actually do somehting about it. The outcome of this thinking was embodied in the Corporate Average Fuel Economy Requirements, or CAFE regulations. ( In brief, each manufacturer of automobiles sold in the US, including foreign makers, would be required to achieve increasing miles per gallon targets in each new model year. This was based on the average mpg of all new cars sold. Failure to reach the legislative targets of mpg triggered a system of monetary fines against individual manufacturers. What a blessed idea, a government which actually utilizes foresight and planning for the future instead of short term political gain! A government with the fortitude to reach out and save a population from its own bad habits in the process. Those were noble and heady times indeed to see a government willing to apply what it had learned by the 7th grade for our national and global well being. It was a time of profound common sense.

It is interesting to note however, the ways in which progressive and seemingly sensible ideas are reversed during times of Republican or conservative control of the White House or congress. One can notice the correlation of record federal deficits, relaxed environmental laws, the doubling of commercial minutes allowed on children's television, and any number of similar trends during times of Republican ascendancy. ( Our society becomes polluted in many ways that are below the public radar, and buried under the rhetoric of free markets, and smaller government. But that is a discussion beyond our scope here.

In 1980 the tone of our country changed in this manner as the Reaganomicists and their ideological colleagues in congress implemented their own notions of a smaller less "invasive" government. Who can forget such lines as, "It's time to get government off the backs of business!", (meaning General Motors et. al.), "We must preserve the entrepreneurial spirit in America", (meaning IBM or GE).

The translation of this rhetoric into the world of CAFE meant that by 1985, the efficiency standard for passenger vehicles was frozen at at 27.5 mpg, and from 1986 through 1989 it actually was lowered. Astonishingly, this meant that American cars were actually getting larger, and less fuel efficient despite the law of supply and demand, despite the continuing decline in world wide reserves of petroleum. As a nation, we somehow called it a greater wisdom to use even more oil. ( It was not until 1990, (a renewed Democratic majority in both houses of congress), that the CAFE requirements were amended back to the 27.5 mpg figure, but were frozen at that level where they remain until this day.

Yet, the subsequent manipulation of the CAFE requirements classifies SUV's as trucks, instead of the passenger vehicles that they really are. This is a tip of the hat to the benefit of domestic automakers. As a result, our rates of consumption have continued to grow. US consumption is higher today than in the late 1970's. Even more shocking, after the national anxiety of 1973-74, our dependence on foreign oil is a full 25% greater than in those years. In the 21st century, this fact carries with it a double whammy, because it is not simply the raw materials that we are importing. Today, we are importing a larger percentage of our foreign requirements as finished products. This means that not only are we beholden to other nations for the raw materials, but dependent on them for the latest in refining technology as well. The most modern refineries, with their ability to squeeze more and better products from every last barrel of crude oil are located overseas. This is a true double bind in both materials and know how. (

The American appetite for fossil fuels therefore remains unchecked, either through our own volition, or through regulatory manipulation. The US comprises 4.6% of the world's population, yet acts unabated as the consumer of 25% of the the planet's fossil fuels, and and amazing 30% of the world's total resources. ( Yet, through government inaction to make the hard choices, US gasoline prices are lower than 101 other nations on earth. (

Perhaps the true genius of our government and our society has been that we are able to maintain such reckless numbers and wanton disregard for the law of supply and demand, while doing so at prices for energy that remain far below world scale. But it is an artificial world of rampant consumerism and disregard for our 7th grade grasp of the law of supply and demand. It is a world encumbered by a short sightedness and self interest in the government's business of business that crosses the border into irrespopnsibility.

The job of government is the job of long range planning. It is a job that may sometimes include difficult decisions in the short term, in order to provide for long term security. It is not the job of government to ignore such trends, as an ostrich, while singing the praises of smaller government, and hearkening to some vague and self serving notions of free markets. It is certainly not, in the words of of both Presidents Bush, a case where "The American way of life is not up for negotiation." Bush 41 uttered these famous words when trashing the Kyoto accords on global warming and fossil fuels, while the son used them in the aftermath of 09/11/01.

The answer my friends lies, as do many answers, back in our elementary schools. The answer is as simple now as it was then. It is an insult to our schools, and to ourselves as thinking adults that we can ignore the basics, and allow our government to do the same. O Pray that we find the wisdom to behave as 7th graders once more, and find the good sense to lessen our demands for that demon black gold.

Further Thought:

Timely Common Sense Developments Since This Post: California backs a plan to reduce emissions. The implementation of this by automakers will require increases in mpg. My hometown newspaper, The Hartford Courant endorses California proposal.

Saturday, September 18, 2004

Political Theory In Action

Political Theory 101: Iraq, Democracy, Dictatorship, and a Dash of Regis Philbin

Okay, so just ignore all of the pre war rhetoric about the US invading Iraq as a matter of national security and WMD's. We all saw the seamless morphing of the war's justification from security into something called Operation Iraqi Freedom. That's the one where the real goal all along was to liberate the Iraqi people from the burdens of strong man rule, and to give the gift of democracy. I mean after all, how is it possible to argue with such a clear, concise, and simple objective. Concise yes, but clear and simple?

Our State Department is filled with very learned people from all realms of academic discipline, and among the many areas of expertise represented there would be something called political theory. ( ). Political theorists are a cross between historians and political scientists. In brief, one of the foci of study among people of that ilk is to look at the various forms of government that arise in the human condition. These would include such formulations as monarchy, theocracy, democracy, or dictatorship to name just a few. One of basic ideas explored in this regard is to further look at the various factors of people, place, and time, among others, that seem to particularly favor the establishment and maintenance of one form of political system over another. What factors contribute to the creation of a stable democracy? Why do some countries, regions, or conditions seem prone to dictatorship, or strong arm rule?

It is the purpose of agencies such as the State Department to utilize their resources and to inform our leaders about factors that might influence policy and the decision making process. It is the job of our government and our media, particularly in something so delicate as a democracy, to pass such key information along in order to ensure an informed populace. No such thing has happened in even the most elementary sense about the profound difficulties in establishing democracy in any place on earth, let alone the special experience and history of the Iraqi people. This constitutes yet another in a long line of lies of omission that seem to characterize the Bush administration, ably assisted by a compliant media.

Basic political theory, among writers since Alexis de Tocqueville in his landmark1831 tome Democracy in America, (, have held that of all the different forms of government that might arise, democracy is among the most difficult to establish, let alone flourish. Democracy is anything but simple to build and maintain. Its growth may even include elements of luck and geography that are specific to the United States, (

In brief, Political Theory 101 teaches us that special sets of conditions promote and foster democracy as Americans conceive of it. The short list of key indexes would include the following:

1) A long tradition, respect for, and experience with the notions of free speech and a vigorous and inquiring press.
2) A population that is informed, and is itself vigorously questioning.
3) Respect and experience with the judiciary and the rule of law.
4) A national consciousness that includes a devotion and tradition with the ideas of self determination.
5) A tradition of self reliance.
6) Acceptance of the supremacy of the federal government and the manner in which power is shared with the states or regional authorities.
7) Experience and understanding of freedom, equality, and the rights of humankind.
8) Stable economy and matters of infrastructure, abundant and varied resources.

Clearly, in the case of the United States, and other countries with various forms of democracy about the globe, this partial list of factors is quite evident. Clearly, each and everyone of these items are glaringly absent from the Iraqi experience both past and present. The job of establishing that beacon of democracy in Iraq is in need of many more building blocks and much More time and money than anyone in Washington or on the airwaves would have us believe. It took the US decades to actually arrive at some of the aforementioned parameters.

However, not only does Iraq want for nearly every major factor to ease democracy into existence, but the actions of the present administration have magnified and in some instances created circumstances that are diametrically opposed to democrarcy. Conditions in Iraq, economic, political, and otherwise actually represent a wonderful mixture for the rise of dictatorship and strong arm rule. This is a bold and simply supreme irony that should influence the decision of every voter in some way.

Basic political theory has outlined the conditions favoring the rise of dictators and strong man rule, ( Some of the most vivid examples of this in recent history can be found in post WW I Europe with the rise of Adolf Hitler and Benito Mussolini. The history of Latin America and Africa are also rife with examples. (Latin America in particular shares with Iraq, the problems associated with what has been called monoculture, i.e., the reliance on a single resource for revenue, but that is another whole discussion beyond the scope here). The short list of factors favoring the rise of dictators would include such things as:

1) Unstable economic conditions such as rampant unemployment, and strong inflation threatening the basic security of the population in terms of survival.
2) Breakdown in the rule of law further lessening the safety of the people.
3) Unstable infrastructure with respect to utilities, water, electricity and the availability of food and life services.
4) The rise of regional and ethnic factions pronouncing their own self interest or hearkening back to some more stable perceived golden era in the past.
5) A collective blow to the national self image and ego.

When a population is confronted with these types of conditions, theory holds that the people will yearn for the basic immediacy and stability that can be offered through some form of dictatorship or strong man rule. US policy under George W. Bush has contributed to and multiplied each and every one of these tendencies in ways direct and indirect.

The ideas outlined above are simple, completely elementary in the thinking that embodies political theory. The monumental task of establishing democracy, and the healthy environment for dictatorship created by US military presence and actions simply cry out to be heard. This Iraqi situation is anything but easy, and progress is no where to be seen. The lies of omission, and at best the supreme irony of American actions in Iraq should not be lost on even the most casual observer, and have only been hinted at in the mainstream media, (

Operation Iraqi Freedom? This thing should be a reality show called Who Wants to Be a Dictator?