I Draw With Barney Frank

Well I had my testimony today at the Financial Services Committee. (BTW, I had bad information; I would've warned all 6 of my fans that there was a live webcast, had I known. I also wouldn't have worn a white shirt with a black suit. Seriously, it could be on CSPAN at 4 am so if anybody captures it, please let me know.)

Anyway, Barney Frank opened the session but then kept leaving the room. (He claimed he had to go vote on something--I guess that's a decent excuse.) It just so happened that he was never in the room when I was talking. I was mad because the other witnesses were going long, and he actually had to bang the gavel. It was really awkward; he wasn't being a jerk, they were. He said something like, "Gentlemen, I don't mean to be rude, but I can't manufacture minutes. You really have to limit your remarks to 5 minutes." (These guys weren't even close.)

So anyway I thought I'd have a good opening joke along the lines of, "Thank you Mr. Chairman, I'll keep my remarks brief, because frankly you scared me with that gavel." Yeah it doesn't sound very funny, but believe me, the room would've thought I was Eddie Murphy after hearing the other guys read from their notes for 20 minutes about the current account deficit.

But alas, Mr. Frank left before it was my turn.

I don't really have any great stories to tell. I shook Ron Paul's hand; I will be auctioning my right hand on e-bay, the bidding starts at midnight on Guy Fawkes Day.

There was one Democrat from California--Sherman--and he was pretty annoying. But even there, I couldn't get too mad at him because he was pretty smug and knew he was putting on a show. But it really was absurd. He was saying stuff like, "Now free trade sounds good in theory, but those pesky facts keep getting in the way. They told us if we had free trade and a balanced budget, we'd have no trade deficit. Yet that didn't happen. And even with free trade, Japanese tourists still keep coming to my home district and spending money. Again, we just have to ignore these facts."

I am not making this stuff up. Granted, I was thinking about my own remarks when this guy was talking, but I'm pretty sure he said that free traders didn't think Japanese tourists would visit California.

I actually managed to get a half chuckle from Sherman. During the Q&A he opened up with something like this: "Last week Chairman Bernanke told us that a 1 percent increase in the supply of oil would lead to a 10 percent price reduction. Now I realize this is an unfair question, but if you had to give me a number--what do you say, for a 1 percent increase in the supply of oil?"

(The context was opening up ANWR and offshore drilling.)

So the other three guys give their non-answer answers, basically agreeing with Bernanke. Obviously no one actually said a number.

When it was my turn I said something like, "I echo the remarks of the other three witnesses, that oil has low elasticity, and so even a small increase in supply can have a large impact on price, especially in the short run. You asked for a number--10.378 percent."

A few people chuckled behind me, and even Sherman said, "Ah, I like the precision in your answer, 10.387 percent." (And that's a big sic--he repeated back the wrong number.) But we had sort of a "Boba Fett nod" moment. (See here at ~2:25 for the Star Wars reference if you're really bored.)

The only real tete-a-tete occurred when one of the Democrats chastised us (the other guy called by the Republicans, Walter Williams of Shadowstats fame, not the black economist) for focusing on supply, and not on conservation. She asked us what we thought of lowering the federal speed limit down to 55 again or something like that. So I said it was fine to educate motorists about ways to save gas, whether driving more slowly or inflating tires properly, but that there are tradeoffs and the government shouldn't force consumers to have longer commutes if they're willing to pay more for the speed.

She said something like, "Well how can you praise a lack of regulation after Bear Stearns?" But I wasn't sure if I was supposed to answer, and plus I was there in my capacity as IER economist, so I didn't say anything. It was awkward, and then she said, "That was rhetorical." I don't know if she was saving herself or me.

But here again, the lady wasn't really attacking me, we were all putting on a show. Speaking of which, there were some people in the crowd who were clearly there to see Ron Paul. I should have brought some books to hawk. Live and learn.

Anyway, below is a shot that I obviously didn't know was occurring. And keep in mind, the baldest guy at the table is the one who worries the most about government policies.


  1. Anonymous4:30 AM

    Dr. Murphy:

    Thank you for your service to our country. Helping members of the House and Senate become informed and enlightened is no easy task. Keep up the good work.

  2. The situation is kind of funny in that sooo many people that have online personalities talk a lot of shit about what they'd say if they were to give testimony.

    The thing is, once you're in front of gavel-pounders, with TV cameras zooming around, I don't know many people that wouldn't melt.

    So again, just as long as you didn't quote something from Star Trek (or wear one of the uniforms), I think you probably did a good job.

    Also, while it looks like you are sitting next to him I'm pretty sure it is John - not Walter - Williams: http://money.cnn.com/video/#/video/news/2008/02/28/news.hunter.shadowstats.Feb28.cnnmoney

  3. Bob,

    Thanks for the report, since it sounds like you ddn't use my suggested openning remarks, they will probably have you back again. It will be good to have you as our operative on the inside.

    Did Ron Paul question you at any point?

  4. Anon, Thanks for the kind words, but I think the cabbie on the way over did more serving of Americans that day....

    Tim, his middle name is Danger, er, John. If you click on the link you'll see he's listed as Walter J. Williams, and his actual testimony (which I don't think is available, at least not that I could find) had Walter "John" Williams at the top.

  5. RW, Ron Paul threw out a general question to either Williams or me, and since it dealt with monetary growth I deferred to Williams. And Paul's time had expired by the time Williams was done, so no, technically I didn't answer.

    What's funny is the guy Sherman set me up to knock down the speculation theory. I don't know if he saw the implications of his question, or if he doesn't believe speculators are driving oil prices either. (E.g. neither does Paul Krugman, and it fits his worldview because of peak oil and we need to go solar or whatever.)

  6. Hey Bob, it's nice to have an insider on Capitol Hill - I hope you get invited back!

    C-SPAN3 aired today's Financial Services committee hearing, but it looks like they chose not to air yesterday's (you got co-opted by Obama and some speech on Colombia). I was hoping to get some YouTubes done; did anyone record the webcam?

  7. Hey Minnesota Chris,

    I not technically savvy enough to do you tubes, but maybe C-Span has what you need.

    Maybe, they'll let you have what you need.

  8. I tried C-SPAN, but I don't think any of their networks aired it, and I don't see it on their websites. I have software that can record live streaming audio, and I'm kicking myself for not doing so...

  9. Minnesota,

    Even if they didn't air it, they probably taped it. You should try an contact someone there.

  10. I'll try that, thanks Robert.

  11. It's my fault for not giving a heads-up. I reread the email I had beforehand, and the guy told me there would be a streaming webcam.

    The people at IER told me it didn't come through very well though; a lot of starting and stopping.

  12. Is that the first time you have seen a picture of the back of your head?

    Nice summary of the blow-by-blow.

  13. Not the first time, Pepe. I think the first time it really hit me was in a convenience store in grad school. I looked up and saw my reflection in the dome mirror in the corner of the wall and ceiling. Scary.

  14. If anyone is still reading this post, Ron Paul and Bob Murphy's parts at the hearing are on YouTube. Click here for Dr. Paul, and here and here for Bob.


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