Publilius Syrus was right

On Tuesday, the President of the United States said something that implies one of two things: he doesn't know what a speculator is or he thinks we don't know what a speculator is.  Frankly, I don't care which it is, because neither is a good quality in a president.  Remember when Bush couldn't say nuclear?  How much comfort did that instill?

"We can't afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage and driving prices higher, only to flip the oil for a quick profit."  -President Barack Obama

 Speculators are people who think that something is priced too low.  If you find a $10 lamp at a yard sale that you turn around and sell for $25 at an antique store, you're a speculator.  If you bought into a hot stock tip, you're a speculator.  If you bought a lottery ticket, you're actually a gambler, and a poor one at that. 

All of those things, though, are voluntary, and require two parties.  The guy who sold you that $10 leg lamp would have preferred to sell it for $25, I'm sure, but either getting rid of it quickly was worth something to him or he didn't know its actual value.  But, after this transaction, both the seller of the lamp and the buyer of the lamp are happier than they were before, otherwise the lamp would not have been sold.  So, in every case of speculation (even on oil), in order for a speculation "bet" to be made, somebody else must take that bet.  Somebody on the other end of the speculation thinks that the price they are being offered is, at the very least, fair, if not good.  Unless you make all your own stuff, everything you've ever bought you  because you thought it was worth the money on the price tag (or somebody else did).

Speculators have been demonized as predatory or parasitic, because they don't make things.  However, price correcting does have value and is not without risk.  Other people selling lamps are happy to know what they are worth (have you ever looked at what similar items are selling for when you post on Craigs List?).  Sometimes the price is not predictable and goes down instead of up or vice-versa, making those various bets go bad.  Like Beanie Babies. 


The price of oil might be undervalued, too.  People are complaining about the price at the pump, but the concept of price is really just a means to distribute resources.  Money is valuable because it serves as a store of value and is easy to carry.  Food is valuable to me, as are books and candy.  How valuable?  We measure that in its monetary value.  If you remember your supply and demand curves from economics, as the price of transportation goes up, people will still pay (inelastic good), but some will find other alternatives  (Biking, carpooling, public transportation, moving closer to work, getting a smaller car, etc.) or suppliers will increase production to take advantage of the higher prices.  If that's the case, then it stinks, but your lifestyle will have to change.  During the Carter Administration, gas was rationed and price was not the means that the resources were distributed, and instead it was (among other things) wait time.  Would waiting in line be less aggravating?

It may not seem fair to the poorer if this happens, but it's not any less fair that the poor don't have Gulfstreams, that the busy may not have time to wait in line for gas, or that interesting people get attractive spouses, either.  That's how resources work, really.  In fact, there are a lot of people who think extra taxes on gasoline would be a good thing in the long run, implying that there is definitely room in the market for speculation.

There is also the awkwardness of the word "artificially."  What does he mean by that?  Is he saying that some participants in the market are illegitimate?  How is that determined?  If I buy a used car for $1500 with the intent on keeping it, but later see on Craigslist someone willing to pay $2000 for it, would that be an artificial transaction?  How long would I have to keep it before it's not speculation anymore?  Or what if I hire a travel agent?  Or buy stock from a stock broker instead of an IPO?  Or buy tickets to a Clemson game on Stub Hub?  Or just a guy selling tickets outside the stadium?  Are they equally artificial?  What is a natural price increase?  What about the extra costs incurred by taxes?  The president could push to lower gas prices by introducing a bill to Congress to suspend gasoline taxes, since they are price effects that are not even made by market participants; at least the speculators have skin in the game.

Now, does that mean Obama doesn't understand high school economics?  Possible, but personally, I think it's more that he doesn't like the answer.  Like people who complain about their lottery tickets not winning.

As some of you loyal readers know, I watch Law & Order from time to time. Over the weekend, I spent some time in the Homeland, and my parents watch L&O way more than I do. So I caught an episode or 8. It's hard to deny the entertainment value of Jerry Orbach's quips, but the thing that does it for me is the lawyer part. There is the pre-packaged, disposable hour serving size of television aspect that does make the whole experience interesting, but I think the real appeal is the awesome jargon that lawyers get to use. And, according to L&O, lawyers use it all the time. I hope I never have to sit for jury duty or get arrested for murder (and inevitably plea reject a deal where they offer Man 2) and have this vision dispelled. Dun dun.

I guess I should clarify that judges get some of the best ones, but they're lawyers, too, sort of, right? They go to law school and everything! I will point out a few of the highlights, a few of which I try to use in everyday parlance, although I have to wonder how often people understand what it is that I'm getting at with all this.

1. I'll allow it. This is what judges say when Sam Waterston, the reason you watch the show, tries to do something that in real life would be a gross government overreach, but is great because he's trying to get the bad guy. This is unquestionably my favorite of all legalisms.
2. Withdrawn. This one comes from the trial attorneys, not the judge. It's when one of them asks a question that is clearly illegal, but used to manipulate the jury. The judge always instructs the members of the jury to disregard, but really, how easy it to disregard something like, "So, it was the first and third child that you smuggled into tend your rose bushes that you didn't beat with a hose, but not the second?" It's a way to just surrender, and move on. How convenient would that be?
3. Objection! Probably the most versatile, anytime you disagree, you can just throw this one out. "I did not steal your waffles." "Objection! Those are clearly my waffles."
4. Overruled. You're wrong. Simply put. One word, can't beat that sort of efficiency.
5. Chambers! Sam likes to yell this one too, and it always seems so forced. I don't really know what sort of practical application it would have, unless you are demanding a romantic rendezvous. That's also pretty direct and would be efficient, if it worked.

And this didn't even begin to discuss the Latin. Habeas Corpus? Latin for "That you have the body." I think you can imagine a few contexts where that would be handy while chatting. I'd consider going to law school just for the lingo. What do we get? A mathematical definition of "work"? Objection.

What is left?

Every left-handed writer, especially those who [try to] write humor, has written this column. The world is conspiring against us with awkward tools that we can use to kill ourselves, like right handed scissors or chainsaws. They are right, you know. It is probably the reason there are so few of us around. They do tell us (other left-handed people, that is) that there are more left-handed geniuses, per capita, than right-handed ones. I believe it, because we have to be smarter, on account of all the deadly instruments. Natural selection, really.

There are a lot of other things out there, too, that are designed for the less sinister of us. (Sinister is the Latin word for left [dexter is right]. Isn't that wild? The Romans thought we were evil! I assure you that we are not. Or is that just the sort of thing that an evil person would say to deceive the masses?) A lot of them are things you don't really think about. My friend has been complaining (a lot) that the whammy bar on his Xbox 360 Guitar Hero Les Paul is not suited for left-handed rocking out (I only have the Rock Band Stratocaster). Who would have thought that Guitar Hero would discriminate?

The thing that set me off on this (most recently) is my coffee mug. It is a Rose-Hulman mug that I got for free that proclaims our greatness via US News and World Report (we're #1!) vintage 2003. If I want to show that proclamation to the world, I have to hold it with my left-hand, meaning that I cannot write while I drink my crappy hot tea. Why else would I have a mug with a message that bragadocious, if not to show it off to the world? Actually, now that I think about it, if I have to use my left hand, does that make it left-handed? I'm so confused now.

Just like I was when trying to figure out on which hand to wear my watch around Christmas time. Pants are also right-handed. Left-hand drive cars are right-handed. Most desks are right-handed, so much so that the first time I found a left-handed desk in a classroom I got really excited and was determined to sit in it, regardless of where it was in the classroom. So I did, even though it was stacked on top of three other desks.

I am the only person I know who puts my mouse on the left side of the computer. You can always tell where I sat in the computer lab, and people will freak out if I don't put it back. I'm sorry to disrupt your apple cart, Mr. Right-hander, but welcome to our world, but it's all part of our sinister plan. I mean, there is no plan.