Crank of the Week - July 21, 2008 - Harry Reid

For crankiness above and beyond the call of duty the Crank of the Week this week is none other than that dower old school-master, Harry Reid, US Senate Majority Leader. On July 24, 2008, Harry Reid threw a little temper tantrum at a press conference, along with his co-conspirators Dick Durbin, Chuck Schumer and Patty Murray. After one of his usual tirades against Republicans and anyone else who disagrees with him, he then turned his anger on the stalwart members of the fourth estate. He accused the media of not relaying news stories properly. The Nevada Democrat said reporters should actually watch what's happening on the Senate floor rather than just printing what Republicans said.

“I would suggest you would pick up a lot of interesting things doing that,” Reid said. When a reporter said she was watching the floor, and it still wasn't clear what Reid had offered the Republicans, Reid became angry. In a stunning example of reasoned discourse, indicative of the senator's oratorical skills, Reid yell at the reporter “I would suggest you turn up your hearing aid. It was clear for those of us who understand English.”

What was the cause of this senatorial outburst? It seems the Senate declined to pass Reid's energy bill, which focused most of its efforts on reducing speculation in the oil commodity market as a way to reign in gas prices. According to Senate Democratic aides, Reid and other Democratic leaders were particularly upset by a New York Times article earlier in the week that followed on several other reports highlighting Democrats’ attempts to fend off defections from their ranks to GOP-sponsored amendments. Those amendments would permit new drilling in the Outer Continental Shelf and in the West for oil shale. Since it is the position of the eco-leftists that no new fossil fuel supplies should be developed, Reid offered Republicans only two amendments to his anti-speculation bill resulting in a filibuster.

All of this petulance led one conservative commentator to remark, “Reid is frustrated?! What about the American people who have to pay the Reid Pelosi $2+/gallon gas tax because those two are blocking drilling in America! These idiots keep saying NO, NO, NO to every single plan to increase our energy supplies, and reduce our dependency on foreign oil, and all the while the American consumer takes it in the neck.”

It seems that the cranks in both the House and Senate have yet to figure out what the American people have already come to understand: alternate energy is needed for a secure future but more domestic energy production is needed for a secure present. Blaming speculators in the commodity trading business makes as little sense to the public as it does in reality. As the Economist put it, “neither index funds nor other speculators ever buy any physical oil. Instead, they buy futures and options which they settle with a cash payment when they fall due. In essence, these are bets on which way the oil price will move. Since the real currency of such contracts is cash, rather than barrels of crude, there is no limit to the number of bets that can be made. And since no oil is ever held back from the market, these bets do not affect the price of oil any more than bets on a football match affect the result.”

In total, index funds account for only 12% of the outstanding contracts on NYMEX and have a value equivalent to just 2% of the world’s yearly oil consumption. So for concintrating the blame for higher oil prices on a negligible portion of the price determination system and ignoring the future security of the entire nation hectoring Harry is our Crank of the Week.