Notes on the state of things

Notes on the state of things

Here we go again:

Oil prices are on the rise – 80 percent higher for home heating oil, as but one example — and observers near and far are, to varying degrees, blaming “speculators.”

As one Southwestern Pennsylvania oil distributor told the Tribune-Review:

“In my opinion, the price speculators are part of the cause of this,” he said, first ceding that supply and demand play a key role. “They buy futures and then they sell them. And they say, ‘We think the prices are going to be higher, so we’re going to buy now’ — and that drives the price even higher. There’s nothing you or I can do about that.”

But as one economics observer reminded not long ago:

“The upshot is that futures markets — and the speculation that occurs therein — provide a public service,” he noted. “Regulating, restricting or eliminating those markets would not bring prices down or make them more predictable.

“All it would do is prevent these agents for social good from doing their job, which is to tell us the truth — as best they see — about the future cost of crude and to offer a means by which we can insure ourselves against the impact of increasing or declining crude oil prices.”

Still skeptical? Still cursing the speculators?

Here’s how Andrew Beattie, an economics journalist for Investopedia, describes the bottom-line good of speculators:

“With all the negativity aimed toward … speculators, it’s easy for us to forget that their activities maintain prices, prevent shortages and increase the amount of risk they undertake,” Beattie says.

“(I)t’s important that we preserve speculative investing for the people who do — more than important, it’s a necessity for a healthy market and vibrant economy.

“(J)ust remember that the next time you pay sharply more a gallon for gas, it’s so we’ll still have some left over for next week, year, decade and century,” he reminds.

A more expansive explanation of the necessary role speculators play in a market economy can be found here: https://www.investopedia.com/articles/basics/09/the-function-of-speculators.asp.

Here we go again 2:

As The Philadelphia Inquirer reports it, as of Oct. 1 and in “an effort to crack down on litter and help the environment, retailers in Philadelphia are no longer able to provide single-use plastic bags to customers.”

The ordinance was passed in 2019 but was put on hold during the pandemic. The City of Pittsburgh is considering a similar ban.

Never mind that researchers have found two leading alternatives far more problematic.

To wit:

The environmental footprint of paper bags is far larger than plastic bags, whose U.S.-originating ecological detriments have been grossly overstated and/or outright misrepresented.

And reusable cloth bags, typically cotton and seldom washed, are proven to be unsanitary.

Consider this, from a 2019 Cincinnati Enquirer commentary, detailing how banning plastic bags will have little or no effect on the environment:

“At least that was the finding of Denmark’s Environmental Protection Agency, which released a study on plastic bag use earlier this year. The Danes found that plastic bags have the lowest environmental impact of virtually every alternative for carrying groceries. …

“The study also found that lightweight plastic bags have a smaller carbon footprint than practically any other alternative and much smaller than cotton bags.

“Denmark wasn’t the only country to come to such a finding. The United Kingdom did too,” the newspaper commentary noted.

Or as legendary huckster exposer John Stossel recently noted:

“Banning plastic bags in America will accomplish roughly … nothing. … Politicians ‘looking for something to do’ routinely do more harm than good.”

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).