Oil Speculators: The Geek Version

OK here is the geekiest version yet of my views on oil speculation. I go through this one pretty slowly, step by step. I deal with some of the complications brought up by our good friends at MarginalRevolution etc., and show that they don't change the conclusion that speculators don't seem to be responsible.

There will be a punchier version (which deals more with the policy implications, rather than the boring economics) in an upcoming Freeman.


  1. You didn't mention how long-position speculation on oil could actually cause the price of oil to fall significantly, for example, if I were the one doing it.

    Your elaborate, well-thought-out justification for this oversight is _______.

    j/k, j/k, you're good, you're good

  2. Out of curiosity, what are some examples of your "bad luck" in the past? You didn't cause 9/11, did you?

  3. Anonymous4:50 PM

    I'm glad you are so impressed with us here at the blog that you give us a more technical version than FEE (and probably Congress).

  4. One example would be constantly having problems that are very vivid in my consciousness (such as back pain) but which get trivialized and ignored because of the lack of a large enough physical component.

    Out of curiosity, how would you rank these priorities:

    1) Establishing clear, well-defined, principled property rights in resources for which there are none and get abused for that very reason, such as the atmosphere.

    2) Not having to pay more for gasoline.

    I would put them 1,2.

  5. Silas,

    I'm not going to reverse my position on drilling your accusations.

    I don't understand what you're saying about your bad luck. You have back pain and your doctor doesn't believe you?

  6. Wow, now it's way too late for Bob to see this, but ... yes, that's the simplified version.

    The more specific version is: yes they believe I have pain, but that "it's no big deal" because "it's never killed anyone" (as long as you ignore suicides); or believing, against all evidence, that it can be fixed with low-grade, unscientific treatments like physical therapy ("sixth time's the charm!"); or that it *must* not be hurting that much because the disc protrusion showing up on the MRIs isn't *that* big so I'm just a wuss. (Needless to say, not one of them has accepted my offer to go through one day of work with 16 needles scattered throughout their back in exchange for $50.)

    One of them, however, is genuinely sympathetic and has said that, because of the torture I go through in working, I meet the medical and legal definitions of disabled.

    (No, the quality of the chair doesn't help, thanks for asking.)


    And, thanks for reaffirming your position that your vision of a libertarian world is actually one of a privatized bridges but socialized air, and that cheap oil is more important to you than the property rights of others in their lungs and low-altitude land. Very principled.


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