AUSTRIAN ECONOMICS ADDICT

THE ECONOMIC REALITY OF OIL

US Rig Count Rise Continues: What Will OPEC Do If The Market Doesn’t Rebalance? at zerohedge.com. The oil market is always balanced between existing supply and demand for oil. It may not be balanced from the perspective of OPEC, but it is always in balance. When the price of oil rose to $120 a barrel  in 2008 the oil price was balanced, and OPEC was happy, because they were the seller. But consumers of oil were not happy. Unfortunately for OPEC, but fortunately for the consumer, this price allowed the US fracking industry to enter the supply side of the market and ramp up production. As a consequence of this price increase, the fracking industry found lower cost ways of extracting oil. On the demand side, people started to use less oil because of the high price. The increased supply and decreased demand eventually reduced the price of oil to $40 a barrel. This price was ‘balanced’ at $40, but OPEC didn’t like this balance. OPEC decided to cut production which would decrease supply and eventually push the price back up. Unfortunately US fracking is now profitable in the $40-$50 a barrel range. As the OPEC cuts raised the price, to above $50, frackers were able to supply oil at this price, establishing a lower price that OPEC is not happy with, but consumers are. The OPEC ‘cartel’ doesn’t have the influence over the world oil market it once had. Thanks to the dynamic US fracking industry. Read my article: Decreased GAsolint Demand + Increased Oil Supply = Decreased Oil Prices.

Goldman Stunned By Collapse Of In Gasoline Demand: “This Would Require A US Recession“, at zerohedge.com. This is the other side of the supply and demand coin that we talked about above. Demand is collapsing. Which means the price will drop to sell off the over-supply which doesn’t coincide with the decreasing demand. The lower price will eventually bring supply and demand back in line with the desires of consumers and producers. Does this collapse mean that the economic activity is shrinking? Maybe. Or will demand go up when the price decreases? Read my article: Gasoline Consumption Is Down: Why?

HEALTHCARE  REALITY

Major Blow To Obamacare Mandate: IRS Won’t Reject Tax Returns That Don’t Answer Health Insurance Question, at reason.com. What does this tell us about Obamacare when bureaucrats don’t want any more paperwork and information? Trumps executive order providing relief from Obamacare seems to be effective.

Healthcare Is No Immune To The Laws Of Economics, by Jonathan Newman, at mises.org. This is why healthcare is not a right. Healthcare is an economic good that has to be produced by someone. You don’t have a right to take what someone produces. You have to exchange something you own for what the healthcare provider produces. Calling healthcare a right doesn’t magically change the reality that it is an economic good.

Judge Rules Health Insurance Companies Matter More Than Taxpayers, by Tho Bishop, at mises.org. The tax payers not only pay for the losses of  insurance companies who participated in government created high risk pools. We have to pay for our own increased insurance costs. Heads they win, tails we loose.

Two Health Insurance Company Mega-Mergers Collapsed Today Update (Humana Out Of Obamacare), at hotair.com. Government intervention always leads to a less optimal economic reality than would exist if the market was allowed to function freely.

DRAINING THE SWAMP

Rex Tillerson Cleaning House At State Department, by Danial Halper, at nypost.com. Getting rid of unelected decision makers who are biased toward big government (insiders) is a great start to changing the culture in the federal government.

E.P.A. Workers Try To Block Pruitt In Show Of Defiance, at nytimes.com. Who still thinks that government workers (public servants) are not biased politically. They don’t want anyone to be elected who they think will cut the size and scope of government. More unelected decision makers are going to be fired.

Over Massive Opposition, Betsy DeVos Is Confirmed As Education Secretary, at thinkprogress.org. If teacher’s unions and their allies are against her confirmation, her confermation must be a good thing. Teacher’s unions main concern is to increase the number of teachers in the country so money from union dues will increases. Educating children isn’t important to the leadership of the teacher’s unions. Although it probably is the main concern of a majority of the teachers who are members of the union.

House Republican Introduces A Bill To Get Rid Of Dept. Of Education, at zerohedge.com. Now this would really drain the swamp. Unfortunately the Republicans don’t have enough hangie down things to pass this bill.

MISCELLANEOUS

‘Medallion’ Bubble Bursts Around The World, at zerohedge.com. Who is shocked that a government created monopoly is collapsing because of an unforseen competitor. Government created artificial scarcity for Taxi medallions drove up their price. Now look who is paying the cost of this artificial scarcity. It isn’t the Government. It is the suckers who bought the medallions at the inflated prices.

Officials Continue To Dodge Attempts To Disclose Use Of Stingrays, at reason.com. Stingrays are cellular surveillance devices used by police.

Riot-Prone Mobs Are A Product Of America’s Cult-Like Education, at thefedrealist.com. Excerpt from the article: “….Today’s street theater is the culmination of decades of radical education revision. The radical Left’s systematic attack on the study of Western Civilization has essentially been an attack against the study of any and all civil societies. It is an attack n the features that make a society civil and free. Those features include freedom of expression, civil discourse, the Socratic method of figuring out truth, value of the individual, and a common knowledge of the classics of history and literature that help us understand what’s universal in the human experience.”

This entry was posted on February 18, 2017 at 4:58 pm and is filed under Must Reads For The Week. You can subscribe via RSS 2.0 feed to this post's comments.

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