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Who will save us from the economists?

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An article by Ismael Hossein-Zadeh, who teaches economics at Drake University in Iowa, titled, Are They Really Oil Wars? shows that economists, who like to think of their profession as a science, is more about understanding psychology and that Hossein-Zadeh doesn't understand that, either.

The first paragraph of Hossein-Zadeh's article is worth quoting in full:

"A most widely-cited factor behind the recent U. S. Wars of choice is said to be oil. 'No Blood for Oil' has been a rallying cry for most of the opponents of the war.  While some of these opponents argue that the war is driven by the U. S. desire for cheap oil, others claim that it is prompted by big oil's wish for high oil prices and profits.  Interestingly, most antiwar forces use both claims interchangeably without paying attention to the fact that they are diametrically opposed assertions."

While the premise of the statements above is focused solely on big oil's interest in the war of having either cheap oil or high priced oil, it ignores the fact that the war was primarily because a weak and ignorant president needed something to focus attention on himself, so he decided to attack a foreign country for no reason at all and become a self-declared war president.

It's not possible to believe that Hossein-Zadeh is not aware that the most astounding profits in the history of the oil industry have been made because of the war.  Forty billion in one quarter.  His failure to understand the basic economic principle that the oil companies are about only one thing, profits, the bigger the better.  And it matters not at all to them that it comes from cheap oil or high priced oil, either one will do, and they can make just as much profit from the one as the other.

Cheap oil will allow the oil companies to make more profit by keeping the price of gas where it is at around $4 a gallon that people are getting used to and being told that it will never be less.  High oil prices allows the oil companies to make more profits without doing anything at all, but just to sit back and process the same amount of oil at the exorbitant price.

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Hossein-Zadeh doesn't understand the basic economic pinciple that the oil companies would rather process one gallon of gas and sell it for $40 billion than process 40 billion gallons and sell them for $1.  That's an extreme example of what the oil companies are actually doing right now by processing $140 gallon a barrel oil to produce $4 a gallon gas and making gazillions in profits rather than process $25 oil producing $1.25 gas, decreasing their profit by a factor of 5.  But, if they can get the cheap oil at $25 a barrel and sell gas at the current established price of $4, the profits are literally beyond imagining.

Hossein-Zadeh saying that the view of the antiwar proponents that the war is for cheap oil is diametrically opposed to the antiwar proponents that the war is for high priced oil ignores the fact that neither one matters to the oil companies.  But, the fact is that high oil prices have made the oil companies profits that they could never have dreamed of.

Hossein-Zadeh goes on to say that the oil companies want stability and a steady-state oil market.  The oil companies want nothing of the kind.  They want high profits and if high oil prices are what it takes to get them, the more the better.  And if it takes a war to get high oil prices that make them unheard of profits, the oil companies are going to be all for war, anywhere they can get it as long as they can make it last.

There's been a paradigm shift in world economics since George Bush started a war without purpose, without logic, without reason, that Hossein-Zadeh hasn't caught up with.  Due to that war, the study of the economic situation of the world is also without purpose, without logic and without reason.

Hossein-Zadeh teaches economics.  He thinks it's a science and that the study of the science of it as it applies to the oil companies will show that the oil companies will behave in a rational, logical manner.  Simon Jenkins points out in an article in the Huffington Post that economics is more about psychology than science.  Hossein-Zadeh fails to understand that, and fails to understand because of that, that the psychology of the oil companies is about greed, unabashed, unashamed, overt, unconscionable, in-your-face, get it any way you can, greed.

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Ed Martin is an ordinary person who is recovering from being badly over-educated. Born in the middle of the Great Depression, he is not affiliated with nor a member of any political, social or religious organization. He is especially interested in (more...)
 

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