From: elwin@ai.mit.edu (Lee Campbell)
Newsgroups: talk.politics.misc,alt.politics.elections,alt.politics.clinton,alt.politics.bush
Subject: Re: Using misinformation
Date: 2 Sep 92 22:50:30 GMT
Followup-To: talk.politics.misc
Organization: MIT Artificial Intelligence Laboratory

In article <16855D76D.MEDELMA@cms.cc.wayne.edu>, MEDELMA@cms.cc.wayne.edu (Michael Edelman) writes:
- In article <27418@life.ai.mit.edu>
- elwin@ai.mit.edu (Lee Campbell) writes:
-        [...]
- >
- >Well, I don't think the yearly average "grossly distorts the real trends,"
- >any high peak will increase the yearly average. The average is a sort of
- >low pass filter, which IMHO filters out noise and emphasizes trends. But
-  
- Quite the opposite. It hides a critical piece of data- that infaltion
- was peaking around the time of the '76 election, and it was an
- *increasing* misery index that did Carter in.

OK, if you really want to dispute it, lets see your monthly data
to support your point. I'm not sure what you mean above about the
'76 election; that was Ford's economy in Nov. '76. You have already
claimed that 1981 was still Carter's economy; let's see your data.

- >have it your way. In any case, the Reagan unemployment had monthly peaks
- >over 10%, so they benefit from the same distortion. This is not the meat
-  
- No, this happened early on, before Reagan's policies took effect.
-  
- >of your argument, so let's forget it.
-  
- Is that a way of saying you can't defend the contention?

No. It's my way of saying your argument has another, much more
glaring fatal flaw, so I don't consider this point worth alot
of effort.

- >
-   [...]
-  
- >
- >WRONGO!! There were *two* oil price shocks, not just one. Look at the
- >energy prices in the data given! The first was in '74; the second was
- >in '78. I remember it well; I was a senior in high school and my mother
- >used to get me up early so I could drive her car down and wait in the
- >gas line before breakfast. Don't tell me there was only one embargo;
- >I was there for the second one. Your whole argument is based on only
- >one oil price shock; it holds no water because there were *two* price
- >shocks.
- >
- No, my argument is that policies drove oil prices rather than the
- opposite. There was always plenty of oil at a price. There was never
- an actual shortage. What kept oil in short supply was US government
- price fixing. You're cleverly deleted that part of my argument. Read
- William Simon's "A Time For Truth" for the inside story on that bit
- of nonsense.

I deleted nothing. I have e-mailed you your original post, and my
reply. I invite you to compare them line by line and show me what
other than "sig" I have deleted. If you find you were mistaken, I
hope you will be kind enough to retract your statement about my
"clever deletion."

You say "there was always plenty of oil at a price." But price is
exactly what the original poster was talking about. He said, in effect,
that the OPEC cartel raised energy prices unilaterally, and those
increases spread out through the American economy raising many other
prices; i.e. causing inflation! His claim was that OPEC caused a
significant amount of the inflation in '78-79. Now you seem to be
claiming that Carter or Congress or somebody other than OPEC really
caused the oil price shock of '78-79. I was reading the newspaper
back then; I remember a character named Sheik Yamani who advised
the king of Saudi Arabia on how high he could set oil prices to
maximize return. Some of the more radical Arab states wanted to set
oil prices much higher; Yamani held them back because he felt it
would break the US economy, and a broken economy would yield less
than maximum money. I remember domestic oil companies raising
prices to match OPEC's price and reaping windfall profits. I
remember congress passing special windfall profit taxes (under Ford,
I believe) so the government got alot of whatever price increase
domestic oil made on "old" already producing wells. If the oil
companies didn't want the government to collect any windfall profit
taxes, they were free to produce "old oil" at "old prices"
(somehow none of them did). They were also free to produce "new"
oil at market prices. They ended up producing both and paying alot
of windfall profit taxes and maximizing their income. But OPEC set
world prices, and congress did not tax OPEC oil; only domestic.

- >- OPEC, US energy prices stayed high! If we look at the "energy policy" of
- >- Carter, we see a number of reasons prices stayed high. Those of you old enough
- >- to have been reading the newspaper back then may recall the various classes
- >- of oil and the different tariffs- at first there was "old oil", which was
- >- taxed heavily, and "new oil" which wasn't. Then Congress came up with ways
- >- to increase taxes, including "new old oil" and "old old oil". It was
- >- policy, not any embargo, that kept energy prices high.
- >- >
- >- >For those of you who want to argue about how awful Carter's administration
- >- >was and what horrible economic policies he had, at least have the courtesy
- >- >to use valid data.  (If you have different numbers feel free to post them
- >- >along with their source).
- >- >
- >- And before you post a silly argument like the above, make sure you
- >- understand the data!
- >
- >Talk about silly arguments! You just tried to blame the 2nd oil embargo
- >on Congress!!!!
- 
- Congress did for oil prices exactly what they've done for the prices
- of agricultural commodities, with exactly the same results. That's
- neither surprising nor counter intuitive. On the contrary, it is
- perfectly typical of the effect that obtains when congress starts
- interfering with the allocative efficiencies of markets. It is also
- exactly what Bill CLinton has promised to do with US capital markets.
- You heard it here first.

Gee, you've lost me here. Congress buys agricultural products at a
fixed price, thus increasing the incentive to the supplier; it taxed
oil windfalls, thus decreasing the incentive to the producer. Also,
the majority of our oil is imported. Finally, you may want to look
at European or Japanese oil taxes, prices, and economies when you
make these claims.

-  
- >                                - Lee Campbell
- >
-     Michael Joseph Edelman           Wayne State University

					- Lee Campbell