Obama "exercises" Strategic Petroleum Reserve Option

The Obama Administration announced today that it is releasing 30 million barrels of oil from the Strategic Petroleum Reserve. The reserve is intended for emergencies and severe oil shocks only, but the last administration also released millions of barrels when Hurricane Katrina severely disrupted domestic petroleum refineries along the Gulf Coast. This is a political acknowledgement that the weight of sky-high gas prices are a drag on an economy that, according to almost all indicators, has stalled since May. Contrary to the snake-oil economics that Donald Trump has been peddling, near term gas prices are largely out of policymakers' control, especially if your remedy is giving OPEC a good talking to. It's a function of simple supply and demand: developing countries are consuming more and more oil, and the war in Libya has reduced global supplies by roughly 1.5 million barrels a day.

All this talk of Obama exercising the reserve option to lower gas prices has gotten my finance juices flowing and I think you could not only make the case that the augmentation in supply might soften the worst of summer gas prices, but also that the administration's calculation is similar to taking a macro short position on oil futures - that is, it expects the price of oil to decline, and by insulating consumers from the oil shock now while price pressures are most acute, it is exercising a sort of derivative financial option to stimulate the economy as a whole given that the reserve bought the oil at a lower price in the past for release at a higher price. This means the government sells its commodity investment at a higher return than what it initially paid to buy it, while injecting capital into the economy by artificially lowering the price of a core good. And it might even get to buy back petroleum at a (hopefully) lower price in the future. Talk about "priming the pump."

Speaker Emerita

I worked as a research analyst for a few months in 2010. On my first day, all the new RA's were introduced to the permanent staff and we played an ice breaker. We each said our names, the school we went to, a wild animal we would domesticate, what we would name it, and why. When came to my turn, I said, "I'd get a cougar and I'd name her Nancy Pelosi."

I said it to break the ice, but I only half intended it as a joke. I have a very complex adulation for Nancy, but she's a complex intersection of some of my favorite things. Maybe it's because I'm a gay guy, and it is a truth universally acknowledged that gay men are attracted to powerful women. Maybe it's that she's a Californian, or that she's the Congresswoman for my beloved gaysian San Francisco. Or maybe it's because Nancy Pelosi is single most effective, unwavering champion for liberal causes in national politics since I became politically conscious.

It's not just that I want to differentiate myself by worshipping at the altar of someone other than the president. I admire President Obama, but when the White House wanted to abandon comprehensive health care reform in favor of a piecemeal approach after RILF Scott Brown's election to the Senate, it was Nancy who famously rejected the White House capitulation and declared, "You go through the gate. If the gate's closed, you go over the fence. If the fence is too high, we'll pole-vault in. If that doesn't work, we'll parachute in. But we are going to get health care reform passed for the American people."

via the Economist
Along with Russ Feingold, Nancy's speakership was the biggest casualty to liberals in the 2010 midterm elections and it's a travesty. I'll never forget that November day when Democrats took back Congress just a few years ago in the 2006 midterms. Bush and the Republicans had been running around unfettered for 6 years - really as long as I knew anything about politics - when Nancy Pelosi appeared on television to declare that "Democrats are ready to lead." It was the first time I remembered a big electoral victory, and the speech was music to my ears. And boy did she give Bush a hard time for the remainder of his presidency. Nowadays, John Boehner calls the shots in the House, but I for one will keep trumpeting the awesomeness of the first woman Speaker of the House until she gets that gavel back!

via the Economist

Bounce

I was going to write something about Obama's inevitable (and apparently already measurable) approval ratings bounce on the heels of Mr. bin Laden's termination, but I'm so lazy and approval ratings are so intro-level politics that I can't be bothered. No one thinks this uptick will last very long anyway, unless the employment environment improves appreciably. Nevertheless, history will regard probably regard this as one of Obama's signature achievements as president, along with healthcare reform. Voters, though, tend to have shorter political memories than professional historians.

That's why the cynic in me is bemused to read reports that Obama is travelling to Ground Zero as early as Thursday to bask in triumphant glory and milk this story for all it's worth.

via Discovery Channel
I hope he'll say something about how different the World Trade Center complex is looking 10 years out.

On Osama bin Laden's death

September 11th will always be seared into my memory as a day when our nation lost a little bit of its innocence. This sentiment is perhaps most vivid for those of us for whom this moment was also a coming of age. The attacks occurred on my second day as a freshman in high school, and marked in a very pronounced way the start of a sobering new stage in my life. I think we mostly agree looking back that compared to the decade that preceded it, the years after 9/11 saw a renewed patriotism and sense of solidarity, but that the attacks brought us together while fanning the flames of our fear and distrust of outsiders. In some ways, I actually do miss those days of a nation united by its shared outpouring of emotion - whether it was grief, fear or defiance. It gave us an identity. But I think the net effect, apparent after just a few months, was debasing rather than uplifting, with defiance supplanted by righteousness and grief evolving into wrath. The rash, unmeasured reaction to 9/11 took us to war in Iraq within two years - a decision that had no relation to the war on terror and whose disastrous prosecution continues to overstrain our military even today.

Now that the initial shock of hearing that Osama bin Laden was killed by US forces has worn off, those of us who remember 9/11 this way might be left to contemplate the kinds of emotions on display among some of the celebrating crowds. The mostly young people who turned out to cheer bin Laden's death probably feel, as I do, that al-Queda's actions robbed us of our childhood insouciance, or at least precipitated its loss. I too feel relief that an ugly chapter in history has come to an end, if only symbolically. However, the ecstatic cries of "USA! USA!" in celebration of a death struck me as inappropriate, if not deranged. And as others have pointed out, their zeal for death bears a chilling resemblance to that of anti-American extremists' celebrations (complete with jingoistic banner waving and chanting) following 9/11 and other murders of American civilians in the Middle East.

via TalkingPoints Memo
Have we already forgotten the unmeasured, emotionally-charged foreign policy disasters of the past decade? David Sirota wrote a great piece today criticizing the untempered displays of joy and the media for condoning it:

This is bin Laden’s lamentable victory -- he has changed America’s psyche from one that saw violence as a regrettable-if-sometimes-necessary act into one that finds orgasmic euphoria in news of bloodshed. In other words, he’s helped drag us down into his sick nihilism by making us like too many other bellicose societies in history -- the ones that aggressively cheer on killing, as long as it is the Bad Guy that is being killed.

Our reaction to the news last night should be the kind often exhibited by victims’ families at a perpetrator’s lethal injection -- a reaction typically marked by both muted relief but also by sadness over the fact that the perpetrators’ innocent victims are gone forever, the fact that the perpetrator's death cannot change the past, and the fact that our world continues to produce such monstrous perpetrators in the first place.

When we lose the sadness part -- when all we do is happily scream "USA! USA! USA!” at news of yet more killing in a now unending back-and-forth war -- it’s a sign we may be inadvertently letting the monsters win.

We can all understand jubilation in victory but it would have been a little more human to see some solemnity in remembrance of those who lost their lives in this conflict.