Déjà vu: Energy Prices

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Ed Wallace:

It’s hard to believe it’s been two years this month since this column first revealed that speculators were running riot in the oil futures market. I pointed out that unrestrained commodities speculators were causing the oil price climb we were seeing, which would send the cost of crude to a peak of $147 a barrel by the summer of 2008. At the time most “experts” quoted in the media were saying that oil prices were skyrocketing because world supplies couldn’t keep up with demand, or because we had passed the point of Peak Oil. Neither position was true, of course; just looking at tanker shipments and worldwide oil supplies on hand, those concepts were obviously invalid.


Many of the columns I wrote for BusinessWeek in the spring and summer of 2008 debunked all the excuses being given for oil prices’ suddenly doubling. Today it has come to be considered common knowledge, even common sense, and that’s good for my track record.


Unfortunately for the country’s track record, however, knowing the truth hasn’t changed a thing.



Hegel, Call Your Publicist



Last October, in a follow-up column for BusinessWeek, “How Wall Street Will Kill the Recovery,” I pointed out how investment banks were again profiting from taxpayer-funded bailout benefits.



They were taking those near-zero-interest loans and, instead of using the money to restart lending (and thus, it’s hoped, the economy), they were pumping much of it into equities and commodities. There they were profiting from the ever-rising paper prices caused by the huge influx of cheaply borrowed money.

If Our Grandparents Could See Us Now

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Ed Wallace:

“The OECD rates Canada’s banks as the safest in the world – the United States comes in fortieth, two places behind Botswana.”



— From I.O.U., by John Lanchester



There’s always a pile of new books near my desk; currently, most of them deal with the history of the financial crisis. When time allows I open a couple more, read them and mark key points with highlighters for easier reference. It’s always gratifying to find a passage in which a well-regarded economics writer makes the same points I have in my work, but I like books even better when they teach me things I did not already know.


An example: Barry Rithholtz, a market commentator, put the total cost of the current bailout in terms that most anyone can understand. It is now more than the nation spent for “The Marshall Plan, the Louisiana Purchase, the Apollo moon landings (and all costs of NASA’s space flights), the Korean War, the Vietnam War, FDR’s New Deal, the Invasion of Iraq and the 1980s Savings and Loan Scandal, combined and adjusted for inflation.”



That statement alone should have the public up in arms, demanding smart actions that will make sure it never happens again.



The books I’ve been reading lately also cover the fundamental economic theories of both John Maynard Keynes and Milton Friedman. Keynes is known for promoting government deficit spending in hard times, while Friedman believes in deregulating and privatizing everything. What I now find interesting is that nobody carrying the banner of either of these two economic giants seems to get Keynes’ or Friedman’s fundamental economic viewpoints entirely right.

Why the Technology Sector Should Care About Google Books

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Gary Reback @ TechCrunch:

Antitrust lawyer and Open Book Alliance leader Gary Reback has been called the “antitrust champion” and the “protector of the marketplace” by the National Law Journal, and has been at the forefront of many of the most important antitrust cases of the last three decades. He is one of the most vocal opponents of the Google Books settlement. I interviewed Reback a few months ago, and Google Books was one of the topics we discussed. In the column below, Reback discusses Google Books and its ties to Google search.


This Thursday leaders of the international publishing industry will watch with bated breath as a federal judge in New York hears arguments over whether to approve the Google Book Settlement.


More a complicated joint venture among Google and five big New York publishers than the resolution of pending litigation, the proposed settlement once promised unprecedented access to millions of out-of-print books through digital sales to consumers and online research subscriptions for libraries. But with the passage of time and the ability to examine the deal more closely, the promises proved illusory. The big publishers, as it turns out, have reserved the right to negotiate secret deals with Google for the books they claim through the settlement (pdf).


Meanwhile, torrents of outrage rained down on the New York court – from authors whose ownership rights will be appropriated through the settlement’s procedures, from librarians fearful of price exploitation by Google, from privacy advocates worried that Google will monitor the reading habits of library patrons, from libertarians incensed over the use of a legal procedure to effect the widespread appropriation of property, from digital booksellers concerned about Google’s unfair advantage in the marketplace.

Huge Waves at Mavericks Injure Spectators

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Demian Bulwa:

The Super Bowl of Surfing lived up to its legend Saturday, and then some. The waves at Mavericks were so massive – the biggest in the history of surf contests, some said – that they caused collateral damage on the sidelines.


Long before South African Chris Bertish tamed a pair of monster swells to win the $50,000 first prize at the seventh Mavericks Surf Contest north of Half Moon Bay, a series of waves crashed into some of the thousands of fans who had flocked to the beach to try to see the action.


Just after 9 a.m. near Pillar Point, 13 people were injured and at least 40 people were knocked off their feet, officials said. Many of them had been standing on a short concrete wall and were thrown into rocks or mud by a surge of water.



A stage set up for an award ceremony toppled, while sound equipment meant for a beach broadcast was swamped.