BeldarBlog

Hold oil speculators accountable while driving down the prices of crude oil and gasoline

This isn't rocket science. Instead, it's quite literally Economics 101.

Dems, including both Congressional leaders and their party's presidential candidate, Barack Obama, are all about "investigating" the role of "speculators" in the oil futures markets who, they claim, are responsible for driving up the cost of oil and, thus, the cost of gasoline at the pump.

Hearings are being scheduled and held. Legislation has been proposed.

This is worse than useless, because there is already in place a devastatingly efficient mechanism to punish any who've artificially inflated the current price of oil by reckless, collusive, or abusive trading in oil futures. It's a two-step mechanism:

(1) Start in a serious way to do what we can do to both reduce demand (i.e., conserve) and increase supply (i.e., drill and promote alternative energy sources).

(2) Let the market work.

The fundamentals of market economics will then cause the current price of oil to drop. Yes, it will drop today even if the oil whose production that Congress approves now from the outer continental shelf offshore and from the Arctic National Wildlife Preserves won't actually be produced for years yet. When the opportunities are opened up and the commitments are made, the market will indeed react based on its anticipation of future results. Only an economic idiot or a Democratic congressman can't understand that the market is reacting now to the absence of those future opportunities and commitments.

When the price drops, the wagers made by the speculators — who are heavily invested in the success of the do-nothing Democratic Congress — will come up snake-eyes. Those who've speculated will lose their shirts. Their leveraged purchases will bite them with a multi-fold and righteous vengeance. There's no need for hearings, no need for lawsuits, no need for citations or fines or newspaper exposes.

Just the brutal efficiency of the market, which — when permitted to function properly — punishes those who abuse its processes.

We don't know for sure how many market manipulators there are, or who they are, or how much of the current high prices are the result of their manipulation. Nor are we likely to track them down: Crooks hide their tracks, and the difference between a crook and an entrepreneur is often purely a matter of subjective judgment.

The market doesn't care; the market doesn't need tracks. The market passes its relentless judgments automatically, inexorably, and with the closest thing to perfect justice we're likely to see in our lifetimes — if, but only if, it's allowed by government to function normally, i.e., freed from government interference.

You want to purge the market of manipulative speculators? Let the markets work. Permit and encourage conservation to reduce demand; permit and encourage development (both drilling and alternative sources) to increase supply; and drive the price down using basic laws of economics that are more powerful than even Barack Obama on his best day when he's got a full gospel choir and both chambers of Congress singing with him in harmony.

Why didn't Obama publish anything in the law journal he edited?

"Obama kept Law Review balanced," according to the title of an article by Jeffrey Ressner and Ben Smith on the Politico website. By that, they mean that during his one-year term as president of the Harvard Law Review, Barack Obama gave final approval to the publication of articles by law professors, and shorter "notes" by student authors, that reflected a wide range of differing viewpoints.

That is tantamount to saying that he did his job acceptably well. It's mildly interesting, but not nearly as interesting as an Obama mystery that Ressner and Smith mention — and then leave completely unresolved!

[NOTE: Many weeks after I wrote this post, Smith and Ressner have published a new article entitled Exclusive: Obama's lost law review article, reporting that Obama actually did write an unsigned "case comment" for the HLR in which he analyzed an Illinois Supreme Court case which held that a fetus has no tort rights to sue its mother for money damages for injuries sustained due to the mother's alleged negligence. More details here. — Beldar, Fri Aug 22, 2008 @ 8:30pm.]

*******

Every law review attempts to foster its own credibility by developing and maintaining a reputation for objectivity and open-mindedness. Even though the teaching faculties at law schools like Harvard, Yale, Stanford, and Columbia are overwhelmingly liberal in their own political persuasions, and even though they tend to espouse legal philosophies that reflect their politics, their respective schools' law journals, which are actually student-edited and -run, continue to publish articles written from other and contrary points of view — and to do so with at least enough regularity as to encourage such writers to continue submit their work for review and possible publication.

In my own days as a member and then an editor of the Texas Law Review (1978-1980), I was among the few political conservatives on the staff or editorial board. Some of the fiercest, sharpest, and most principled political arguments I've ever participated in took place there. But making persuasive arguments was what counted among this crew, both when we editors were informally arguing among ourselves over whether Jimmy Carter ought to use military force to free the U.S. Embassy captives in Tehran and when we were formally discussing whether to publish a particular professor's manuscript.

As for Ressner's and Smith's other reporting: That Obama was polite; that he chatted up the law professors he worked with; that he made them feel like he was improving their writing with his editing; and that he was on the lookout for rising young talents: These are all job requirements for any law review editor, at any law review, in any given year. Perhaps Ressner and Smith think that what's merely competent is actually quite exceptional. They certainly go on to show that they're clueless about the role of law reviews in legal scholarship generally:

In Obama's time, as it is today, the Harvard Law Review was one of the most important and distinguished legal publications in the world. Founded in 1887, it is the rare self-supporting legal publication compiled and edited completely by students, typically those attending their second or third year at the prestigious school.

No, guys, that's not rare. It's universal. That's the way it is at law schools all around the United States, and that's the way it's been at least since the early 20th Century. Having its most prestigious and important professional journals controlled and edited by students is something nearly unique to the legal profession. (My blogospheric friend Prof. Stephen Bainbridge is among more than a few law professors who've publicly suggested that this system is not just irritating, but nuts. And he may be right, but it nevertheless still is the current system.)

*******

There is at least one respect, however, in which what Barack Obama participated in at Harvard must have been very different from what I and others had experienced at Texas some years earlier. Ressner and Smith report that Obama "beat out 18 other contenders" to become president of the Harvard Law Review. Those would have been classmates of his, all of them about to enter their third and final years of law school. And that's a remarkably large number of competitors for the top slot — more people, in fact, than we had on our entire editorial board at Texas (even though Harvard and Texas are similarly sized and comparatively very large law schools).

What Ressner and Smith describe at Harvard — and I've read other, similar descriptions of the HLR and of Obama's election as its first black president — make me believe its editorial board selection was remarkably, overtly political as compared to most other law journals. How could it be otherwise, when it apparently depended on a vote among all of one's direct (same-year) peers and competitors who together made up the journal's membership?

At Texas, by contrast, second year students applied in writing to the outgoing editorial board (which was composed of graduating third-year students) for whatever board slot or slots they sought. The outgoing board then made its selections with, as in all other things, the editor-in-chief (the job title used by most law reviews instead of "president") having the final say. At least in my year, there was remarkably little that was contentious in the process. The outgoing book review editor, for example, correctly perceived in me a kindred spirit who would be well suited to matching up newly publish legal books with prominent faculty authors around the country, and suggested I apply to fill his slot. (We actively solicited book reviewers, in contrast to articles, which generally were submitted to us, unsolicited, by law professors.) Several other of my classmates who were particularly good at mentoring were likewise nudged toward applying for positions as "note editors" who'd be working with the following class' new members. Our managing editor, in turn, was encouraged to apply for that slot by the outgoing board based on her drill-sergeant effectiveness.

There was an ample basis for the outgoing editors to make these evaluations: Besides the applications, the second-year students had been doing "scut work" at the direction of the editors — including huge amounts of "cite-checking" (source verification) and galleys proof-reading — throughout the previous year. Most importantly of all, however, second-year members were required, upon penalty of being kicked off the Review, to produce, on deadline, a publishable quality "student note." At Texas and most other top 20 law journals, such student notes tend to be not much different, either in scope or length or even quality, from the articles submitted by aspiring young law professors hoping to publish to promote their tenure prospects. We'd moved away from the earlier practice of having students write shorter, more limited "case-notes" that typically focused on a single new judicial decision, and instead encouraged more ambitious writing that would genuinely add something creative and new to the legal literature.

It was quite typical at Texas (and, I think, at most other major law reviews) that each new editor-in-chief, in fact, would be the student who, as a second-year member, had produced and published the very best student note. In the class ahead of me, my own class, and the class behind me at Texas, there was a wide-spread consensus on whose notes were the best. It is inconceivable to me that any of the three of them would have been selected to be editor-in-chief if they hadn't written a publishable note at all. And indeed, the quality of their respective notes became the source of the each new editor-in-chief's credibility as first among equals, final decision-maker, and the only editor permitted to use a blue pencil for his copy-editing (which no other editor would dare erase or alter without close consultation).

In fact, there were three ways to become a member of the Texas Law Review in the first place: Those who'd been in the top five percent of their first-year class were automatically offered membership at the beginning of their second year. (Some who "graded on" this way nevertheless declined membership, typically because they weren't willing to commit to writing a publishable-quality note or to run the risk of failing to produce one on time.) A roughly equal number of other slots went to the winners of a grueling research-and-writing competition for second-year students. And rarely but occasionally, a student would earn an invitation by writing and submitting, all on his own, a publishable-quality student note.

Occasionally someone would write a publishable quality note that didn't actually get published. Someone might spend six months, for example, researching and writing on a topic that seemed very timely and appropriate when the student had first proposed it at the beginning of his second year, when he or she was a brand new member; but then an unexpected court ruling or new statute might suddenly moot the topic, or change the field so dramatically that what had been written by the student no longer was particularly valuable. Indeed, to try to avoid just this sort of calamity, the topic approval process was itself very detailed, and it included a "preemption check" by other students to try to determine whether there were any such pending cases or statutes lurking in the works that needed to be considered.

Otherwise, though, at Texas and, I believe, most other major law reviews, the rule for members was (and I think still is): "Publish or perish, up or out." If you didn't produce a publishable-quality note on deadline, your name was stricken from the membership list on the masthead, you had no opportunity to become an editor, and — worst of all — you became ethically obliged to call back all those employers who'd extended you job offers in part based on a résumé credential that you were no longer entitled to claim.

No one wanted to make those telephone calls.

(My own student note is abstracted here, by the way; and yes, it, along with my grades and sparkling personality, was a key in my becoming the book review editor on the 1979-1980 TLR editorial board, getting my judicial clerkship with Judge Carolyn King of the Fifth Circuit, and then getting a job at Houston's Baker Botts.)

*******

With which background, perhaps you can better appreciate the most peculiar thing in Ressner's and Smith's article on Obama (boldface mine):

One thing Obama did not do while with the review was publish any of his own work. Campaign spokesman Ben LaBolt said Obama didn't write any articles for the Review, though his two semesters at the helm did produce a wide range of edited case analyses and unsigned "notes" from Harvard students.

How remarkable is this for Harvard? I have no first-hand information, obviously. But among the legal celebrities whom Ressner and Smith quote in their article is Susan Estrich, who they describe as "the USC School of Law professor who served as Michael Dukakis' campaign manager in 1988 — and who broke ground as the first female president of the Harvard Law Review 14 years before Obama took the reins" (emphasis mine, brackets by Ressner and Smith):

Estrich believes that Obama must have had something published that year, even if his campaign says otherwise. "They probably don't want [to] have you [reporters] going back" to examine the Review.

Oh, pish-posh. If Obama had actually authored one of the unsigned student notes that was published, he surely would admit to it — it's another objective credential, and he and his campaign certainly brag about his supposed constitutional law expertise at the drop of a hat. Given that he never published anything while an instructor at the University of Chicago Law School later, it would be his only written evidence (besides his magna cum laude degree) of genuine academic excellence in the law. Thus, Estrich's comment leads me to believe that the Harvard Law Review, too, had a "Publish or Perish" requirement — but it's one that Obama didn't meet for reasons that are entirely unclear, and that he's now "scrupulously managing his biography" to obscure.

My bologna detector tells me there's more to the story here. So which of his former co-members or -editors will be the first to squeal on him? Or is there the Rule of Omertà among them?

Beldar on WaPo on Obama's "scrupulous manag[ement] of his own biography"

In my last post, I wondered when the WaPo will get around to writing about Barack Obama with any genuine objectivity. An article in today's issue actually starts off promisingly:

In the opening weeks of the general-election campaign, Sen. Barack Obama has moved aggressively to shape his campaign and offered a clear road map for the kind of candidate he is likely to become in the months ahead: an ambitious gamer of the electoral map, a ruthless fundraiser and a scrupulous manager of his own biography in the face of persistent concerns about how he is perceived.

I actually think that's a helluva lede — especially the hint that there's something, well, interesting about what Obama has chosen to highlight, and what he's chosen to obscure, in his own biography.

The problem is: No follow-up. No examples, no meat to support the sizzle. Nothing to drive home to you the fact that: "Yes, indeed, this candidate has things about himself that he wants you to know, but also things he'd rather remain shrouded in mist."

Just go look, for example, at the biography on his campaign website. What's mostly missing that you'd expect to see on any résumé submitted as part of a job application?

It's dates.

There are only five years mentioned, despite the fact that he's 46 years old: 1961 (he was born); 1983 (graduated from Columbia); 1985 (moved to Chicago); 1991 (law degree from Harvard); and 2004 (elected to the U.S. Senate).

Like me, gentle readers, some of you have been in the position of making hiring decisions before. Some of you have a reasonable sense of when you're being snowed. And some of you would immediately look just at this list of years and say, "Well, for example, what the heck were you doin' between 1983 and 1985, young man, and why didn't you see fit to mention it on your résumé?"

Do you know? Here's one of two remaining serious candidates for the presidency. Do you, prospective voter, know enough about him to know what should have been filled in that blank?

I'm not suggesting that it's impossible to find out, if you're in the mood for internet sleuthing. Just like the fact of his smoking habit, it's out there somewhere, if you care to dig. Nor is it something that reflects particularly badly on the candidate, in my own opinion.

But then, my opinion isn't what Barack Obama is trying to shape. I don't see anything wrong with the fact that he went to work in New York in a very conventional job — if not actually, physically "on" Wall Street, then certainly in the business world that he now takes pains to establish that he's always flouted and defied. His deliberate omission of that fact, however, may be a story worth telling.

Unless you're a mainstream media journalist who gets a tingle up and down your leg when you listen to Barack Obama speak. Unless you're in the tank, even if you're in denial about being in the tank. In which case, you can tell yourself that you've done your job as a hard-hitting investigative journalist by merely hinting, instead of actually delivering. "He manages his biography!" you can shout. (Then shut up about the details he's left out, okay? Let's not disrupt "the narrative.")

John Kerry also wanted to scrupulously manage his own biography. In his version, he was a spectacular war hero who volunteered for and served two full tours in heavy combat in Vietnam, and all of the men who served with him loved him and, indeed, held him in awe. But thanks to a few individuals who knew otherwise, including many of those who served with him and absolutely did not hold him in awe, at least some voters took a closer look, and found that it wasn't necessarily so, or at least not in the same way that the candidate claimed.

Yay for the internet! And thank the Lord there are still over four months until the election. The subject of Barack Obama's biography, and what in it he'd rather you not focus upon, will be, in case you haven't already figured it out, a recurring theme on BeldarBlog until November.

Beldar on WaPo on Houston

Okay, I'm a Houston booster. Houston has been berry, berry good to me, and I admit to having a chip on my shoulder about how unfairly it's usually portrayed by the national media. (To Hollywood, it simply hasn't existed since Terms of Endearment, Urban Cowboy, or Apollo 13.)

So when I read this WaPo article about how Houston is faring in the age of $4+/gallon gasoline, I was prepared to find something to bristle at and denounce. Maybe it's just that if you live and work in Washington, D.C., you don't have much room to complain about humidity and mosquitoes; and surely the WaPo writers are used to people with healthy, even over-sized, egos. But in any event, I found nothing in particular to get mad about.

Now if only they could apply that same objectivity to Barack Obama!

Read more >>  Options >>