They will STILL get away with it.

DeLay indicted.

Frist investigated by the SEC.

Karl Rove up to his neck in Plamegate.

And most likely because of all of the dust kicked up in the 90s about Clinton, people are skeptical about the media’s claims about this kind of thing. The difference of course, is there is an identifiable source of the false allegations against Clinton, and only the truth conspiring against the party of personal responsibility here.

The press will smear Ronnie Earle, slayer of Democrats, more than Delay because he is a Democrat. I don’t know what their excuse will be with Frist. Rove is easy: everyone out to get him is Michael Moore.

They will get away with it. They will retain their majorities in 2006, and the 2008 Republican nominee will be the one who easily pivots against all of this.

Big whoop. Call me when we win an election.

NHL Bulls and Bears

Bear: New Jersey Devils. Jeff Friesen was an unsung hero on this team. He did not react well to the uncompetitive circumstances in Anaheim during his tenure there. Being relegated to the worst team in the league (Lamoriello figured if he had to give him away, this was the team to do it) might not sit well with Friesen, especially now that he has a ring. Or perhaps he will relish the opportunity.

Bear: Phoenix Coyotes. They have made a miserable showing in the preseason. Will Cujo let himself be the fall guy for Wayne Gretzky as he was for Dave Lewis?

Bear: Pittsburgh Penguins. They’d better score 6 goals a game if they want to win with these goalies.

Bear: Edmonton Oilers. Did they need Peca and Pronger and no goalie?

Bear: Los Angeles Kings. They didn’t deserve another concussion prone player after loosing Adam Deadmarsh and, arguably, Jason Allison because of concussions. Now Roenick?

9/21

This will be the last test before I break things down again. So far 13-11 — not really statistically significant, but better than being on the downside.

(5) Anaheim +1 (9) San Jose
(1) Philadelphia +2 (26) Islanders (I’ll regret that spread, but road<20 game=””>
(12) Atlanta +1 (27) Carolina
(7) Pittsburgh +1 (12-3 [h/a split]) Boston
(15) St. Louis +1 (22) Nashville [To Tka-Chunky or Queeriya here=even?]
(25-3 [second game h/a split]) Buffalo +1 (30) Washington
(19) Colorado +1 (20) Detroit [I would override this if I wasn’t playing my formula only]
(6) Calgary +1 (17) Chicago
(3-3[second game h/a split]) Edmonton -1 (4) Vancouver

Hurricane Alan

Strikes again. Nevermind all the lost jobs! As long as Republican contractors have their bizzaro-Potemkin flat-tax no minimum wage Gulf Zone, who cares about stifling the economy?

Senator Reid was wrong. Greenspan isn’t a political hack; he’s a pure agent of the rentier class.

9/20

(26) Islanders +1 (29) Rangers
(13-5, Road 2) Tampa Bay -1 (16) Montreal
(10) Boston +1 (11) Toronto
(21) Minnesota +1 (25) Buffalo
(3) Edmonton +1 (18) Dallas
(14) Los Angeles +1 (28) Phoenix

The pre-season is far from over, but I can already tell you one team I will for sure be re-evaluating: Minnesota. They deserve better than (21). A minus 5 for second road game in two days might be too much, but it worked there. I might look later at retroactively applying it to see what the results were. Another team that might get another look? Edmonton. Unless they’ve been holding back more than their scoresheets look like they are, they aren’t living up yet.

BULL: Detroit
They brought Datsyuk back. Good move

BEAR: Colorado
Hejduk is out for 5 weeks with a knee thing. So that leaves them with Joe “Contract Year” Sakic and Tanguay.

9/19: Going strong

(13) Tampa +1 (20) Detroit
(7) Pittsburg +2 (24) Columbus

That performance makes me wonder about Pittsburg, Mario and Sidney or not. Fleury got bitched and Thibault isn’t so hot to being with.

$100.00

9/18 Results

(12) Atlanta +1 (16) Montreal
(2) Ottawa +1 (11) Toronto
(3) Edmonton +1 (18) Dallas
(17) Chicago +1 (21) Minnesota
(24) Columbus +1 (25) Buffalo
(23) Florida +1 (27) Carolina
(9) San Jose +1 (14) Los Angeles

After a bad night from a bad spread-call on a Buffalo/Washington game and a all-too-predictable Anaheim collapse in Los Angeles, the system recovers nicely to put me back in the black (and damn if Columbus wouldn’t have been lower if Nash’s injury had been input).

+$100.00

Observation: I have to apply some coefficient for things like 2 games in a row on the road, etc. Minnesota has played three in a row. Adding variables reaches diminishing returns quickly, and so far this has worked even though preseason rosters fluctuate like a $5 whore’s head.

NHL Bulls & Bears 9/17 / Handicapping

BEAR: St. Louis Blues.
We knew the lockout would diminish some players, but, seriously, put down the fucking doughnut, Keith.

$200.00

(5) Anaheim +1 (14) Los Angeles
(1) Philadelphia +1 (12) Atlanta
(24) Minnesota +1 (28) Phoenix
(18) Dallas +1 (19) Colorado
(25) Buffalo +2 (30) Washington (FUCK that spread)
(6) Calgary +1 (17) Chicago

I’m not reranking shit until the preseason is over.

$100.00

Handicapping 9/16

(21) MINNESOTA +1 over (28) PHOENIX
(27) CAROLINA +2 over (30) WASHINGTON
(3) EDMONTON +1 over (6) CALGARY

I can’t find odds on these, so we’ll say I’m betting $100 virtual dollars on each with even odds.

UPDATE: 2 for 3. That’s enough to make money. +$200.

He's not FDR, he's Hoover

So because we’re getting some Heritage Foundation “relief” plan for the Gulf Coast and it’s using deficit spending (and deficit tax-cutting), Bush is supposed to be like FDR? Hogwash. Shitsplatter. Total crap.

This is a man who is setting up a very, very large tax cut due to his reckless borrow and taxcut behavior. Even the so-called stimulative laffer-curve type rationales aren’t even used as the window dressing for this anymore.

Look at the economic fundamentals. The deficit is mushrooming. Our dollar is weak; oil is high. Interest rates are going up (thanks in part to the weak dollar and in part to the deficit). And the shock of Katrina has yet to reverberate through the economy fully.

This is just on economics; we all know how much of a disaster he has made for our defense, security, and foreign policy.

I’ll be working to fix the Bush mess for the rest of my life. And chances are, my kids will too.

NHL Bulls & Bears 9/15

BULL: Edmonton Oilers. Locking up Ryan Smyth was a great move to keep some continuity in this team’s leadership going forward. Plus, Smyth is an underrated player outside of Alberta.

BEAR: Colorado Avalanche. The controversy surrounding the Brad May signing may get worse here, as the Avalanche may have to defend May in a lawsuit brought by Moore. When will this nonsense stop? The irony here is that it’s hurting the Avs more than any other team. What Bertuzzi did was hardly the worst event in NHL history. Anyway, this potentially fractured locker room and actual distraction is the last thing this team needs after all of its roster shakeups. If they don’t nip this one in the bud, it will start costing them games.

You're An Incompetent Twit, Michael Brown

The Horse Whisperer “offers his resignation” and his replacement is put into place before the sun goes down. Of course, it was his choice to resign. Right.

Tragically, the damage has already been done. Conservatron cronyism has already killed. The FOB’s where uniformally competent. The FOW’s all seem, in the timeless words of Bill Hicks, to have been conceived by weak sperms.

NHL Bulls & Bears 9/12

BULL: Atlanta Thrashers. They signed Peter Bondra. Bondra and Hossa aren’t as good as Kovalchuk and Heatley, but it’s sure better than not having him. If they sign Kovalchuck, this team might make some noise in an overrated division.

BEAR: Washington Capitals. So far, they appear to be headed for the worst record in hockey. Failing to sign Peter Bondra, who wanted to come back, will leave their fans with nothing to cheer for at all.

Decertify the NHLPA

The NHL players are represented by a top-heavy, apparently corrupt, dud of a union. This union led them into a lockout with almost no leverage, a bad PR image, and a refusal to accept the financial state of the NHL. Regardless of which side you took in the lockout, you cannot tenably hold that the NHLPA executed with any semblance of competence.

My opinion is that it’s pretty hard to defend a “free-market” in the NHL when other leagues that are much more successful have salary caps. But regardless of that, how can you justify causing a lockout and then agreeing later to a cap after the majority of your union’s members (who are not multi-millionaires) have been going with little or no salary for a year?

Now apparently, there was some kind of behind the scenes mutiny, but I doubt we’ll ever know all of the details. In the end, the players took it in the ass and they could only cheer about becoming free agents at a younger age (they could have had that concession very early in the game), which won’t get them anything since each player can only receive a certain salary.

So, in short, they bungled it. Usually in a standoff, the players curry favor with the fans. Not this time. Poll after poll showed that fans were sick of big contracts for players who delivered little and forced their franchise player to leave town for draft picks. And since this is really a Canadian sport, these economics cost the game two Canadian games and a Minnesota team (for nearly 10 years).

For all the complaining about clutching, grabbing, and trapping, it was the economics and expansion that caused this. The economics were the players fault for demanding salaries commesurate with players in other sports. The expansion was Bettman’s fault. Now we have cup winners in Tampa Bay and Dallas–where the sport will never, ever get top billing.

But as disdainful as I am of a 30 team league and the attendant dilution of talent (resulting in the need to play defense) that it occassioned, even in a 15 or 20 team league, having 5 of those control the market still would have resulted in non-competition, bankrupt teams, and Canadian teams unable to keep their talent.

If Canadian interest in the sport dies, the game dies. Period. Canadian teams should be subsidized, and they should represent much more of league. Winnipeg, Quebec, Hamilton, and a second Toronto team should be created.

But despite all of this idiocy by the owners, the players’ union couldn’t have done a worse job during the lockout.

The players should simply get together and vote in a new union. It’s not that hard. I would already be circulating cards if I was a player.

It's all about timing.

Of the recent greats to retire, some have retired with their capabilities intact; some while still credible players; some as an embarassment.

The first group includes Scott Stevens and Patrick Roy. Patrick Roy retired after one of his best seasons statistically and shortly after a championship. Scott Stevens was still knocking players silly and winning Cups when he bowed out.

In the second group, I think mostly of Wayne Gretzky. He wasn’t scoring 100 points anymore, and he was noticably slower, but he was still a credible player. He picked his spot probably just at the right time. Al Macinnis fits here too. He wasn’t the dominant force that turned around a 3-1 series against Phoenix in the Blues favor in 1999, but his departure wasn’t addition by subtraction either.

In the last group, you find Grant Fuhr, who, I believe, was ironically a Calgary Flame when he left. You find Paul Coffey, who went from being the best to being a journeyman player. And, most recently, Mark Messier.

If not for the ass washings he received every game from Sam Rosen, he would have appeared to be a dud player in each game. Press rumors had him demanding second or first line minutes, which, on the Rangers, may have been proper–but, he wasn’t that caliber of a player anymore.

Will Conservatrons Succeed Through Failure?

When Reagan said that government was the problem not the solution reactionaries correctly heard a coded attack on desegregation, but earnest people could also consider the crimes of Richard Nixon. Although Nixon was a Republican and his criminal activity was inherently political his actions discredited the government as a whole.

The botched response to Katrina starts with Bush and filters down to the cretins he appointed to the command of FEMA. There is a professional bureaucracy and an appointed political bureaucracy. It is the job of the political bureaucracy to carry out the administration’s mission for the Agency and make sure that the professional bureaucracy is in a position to do its job.

With Katrina the clowns that Bush put in charge of FEMA failed. The professional bureaucracy at FEMA and the Corps of Engineers, however, has performed ably once they were finally utilized. Still, from left to right commentators are criticizing the “Federal government’s response” not the specific inept performance of Bush and his bumbling buddies.

When the Republican presidential candidate criticizes the Federal government in 2008 will the electorate forget the faceless pros that drained New Orleans and secured its streets and assume that the entire response was a failure of the Federal government as a whole? I’m sure that Grover Norquist is betting that they blame the bogus ballyhooed “beast.”

NHL Bulls & Bears 9/10

BEAR: Atlanta
Whoa, Nellie! If they lose Kovalchuk, this team is screwed.

BULL: Rangers
Addition by subtraction. What kind of leader plays for his own personal records, anyway? Messier had nothing to prove 10 years ago. What was the point of the last 5?

Stevens Retires

Other defensemen had more points and some players might even have had a better +/-; still, though he never won a regular season MVP or even a Norris Trophy, Scott Stevens was, in aggregate, the NHL’s best player in the between lockouts era of 1994-2004.

Stevens is justifiably most remembered for the “hits”: Leaving the Wings’ Kozlov crawling about like a drunk sorority girl in ’95; ending Unlucky Lindy in ’00; obliterating Willis and Francis in ’01; KOing Paul Kariya in ’03. For me, however, Stevens’ greatest moment was the last game of the regular season against the Florida Panthers in 2000.

The wonderful thing about ice hockey is that grit and determination can equalize superior talent. Where effort counts most leadership will serve the truest standard.

The ‘99-’00 Devils had been phenomenal through most of the season, but their efforts began to disintegrate over the last fifth of the season. A 9-0 thwomping of the Thrashers would be followed by a 3-1 loss to the Islanders. After late season trades and even firing their coach the team was still not right and seemed destined to repeat the playoff flops of the previous three years.

The Devils faced the Florida Panthers in the last game of the regular season that would decide the 4th and 5th seed and first round home ice advantage in the Eastern Conference. A few weeks earlier Devils defenseman Scott Niedermeyer had uncharacteristically slugged Panther goon Peter Worrel on the head with his stick, drawing a ten game suspension and creating an extra layer of antagonism to the match up.

Down 1-0 the Devils seemed listless; in the middle of the second period Worrel took several runs at the Devils’ skill players, which added to the defeated presence of squad.

Then Stevens challenged Worrel, first by taking several chippy shots and finally by fighting him. Worrel was primarily a pugilist, he was bigger and probably stronger than Stevens, but Stevens fought him to a draw anyway. People who don’t understand hockey often decry the fighting, but it is merely a proxy for the emotion that underlies the unrivaled physicality of a sport with no out of bounds. Every fight is a catharsis and therefore a turning point.

I was listening to the radio broadcast of the game through my computer at college. I felt an unmatched symbiosis with that team and I could sense then, as I tried to type my history paper, that their fortunes had finally turned.

The Devils tied and then won the game and, a month and a half later the Cup, and the only stat that marks the crucial moment was five for fighting for best player in the game for a decade.

You Didn't Really Think They Weren't Getting Away With It, Did You?

Apparently, because a Democratic mayor and a Democratic governor didn’t exercise powers they don’t have, they are equally as responsible as President Bush for the disaster. The media gave Bush a relatively rough ride the last week, but it’s winding down.

Ignore that Bush has politicized this just as he asked not to be done (just like 9/11) by spinning blame on to Blanco and Nagin by, inter alia, proposing no “prevailing wages” for reconstruction.

Ignore that Bush’s claims that when he’s on vacation he has all the tools of the modern presidency with him, but seems to fuck up terror warnings and hurricane responses while he’s on them.

Ignore that Bush’s pure cronies bungled the investigation.

You don’t reall think he wasn’t going to get away with it, did you? With over a year until the midterms, even Bush’s shitty record in 2005 may not affect the outcome of many elections, and, of course, he’s never up for reelection himself. This is a perfect time for Republican contenders to step in and show their “independence.”

Of course, it’s heartening to see Establishment “liberals” like Tom Friedman and Mickey Kaus finally turn their fire on the man—but it doesn’t matter now. All we can say to folks like this is, how stupid are you? What sort of polly-annaish universe to you live in where you simply can’t allow yourself to see what this man and his administration represent? Many of us could see this coming six years ago—why couldn’t the experts?

A big part of the answer is by looking at the alternative. While I’m confident President Gore would have been a good, if not remarkable president, John Kerry would have been another Carter, and a disaster for the Democratic party. On balance, Kerry would have helped the country by not being Bush, but that’s about as much as I can say for the man. Maybe someone will be able to stand up on the other side of the aisle and survive the right wing slime machine, but I doubt it.

In the end, you knew that Bush’s reputation wouldn’t be harmed by this, the same way no matter how low his approval ratings sink, his coverage is favorable. Of course he will get away with it.

NHL Bulls and Bears 9/9

BEAR: Philadelphia
Derian Hatcher AND Peter Forsberg will miss the start of camp? That’s a bad sign for both, especially Forsberg, who is injury prone and needs to sync up with a new team and a year off of NHL play. I still think the Flyers are the team to beat in the east, but any more bad news about Forsberg and they need a downgrade.

NHL Bulls and Bears 9/9

BEAR: New Jersey Devils
With this roster, they are $5M over the salary cap when Patrik Elias comes back. As stated below, Lou Lamoriello is the best GM in the business, but it’s going to hurt to lose some combination of Friesen, Brylin, Langenbrunner, and Kozlov.

BEAR: St. Louis Blues
The Devils lost Niedermayer and Steves, the Blues have lost Pronger and MacInnis. The Blues have some good young defensive players, but they won’t be the sub-elite team they have been for the last 15 years in this west.

HEDGING:
There are a lot of teams that look good on paper starting through training camp, or, at least ones that look a lot better. The market is still hanging on to favorites like Detroit, Colorado, and Philadelphia. Only Philadelphia deserves its high valuation. Some of the new risers, like Edmonton, Calgary, Pittsburgh, Anaheim, and Chicago, will fall flat. Some will outperform. If you wait until after the first 10 games, you might have some insight, but by then, a lot of the market moves will be made. Out of this group, I think Pittsburgh has the highest expectations and Chicago the lowest. You can trade on that, but none of these teams are worth a serious long move for the Cup yet–arbitrage only.

The Smartest Guys In The Room

I just finished the account of the rise and fall of Enron in The Smartest Guys In The Room. Not only is this an important story, it’s also extremely well-written. The author maintains “just the facts, ma’am” style, while cleverly weaving themes and not shying away from conclusions well grounded in the facts that are reported. It’s not just a polemic.

In the end, everyone involved was completely captured by their own greed. Arthur Anderson couldn’t say no because of the fees they earned from Enron. That meant that Enron’s stock price would continue to do well because their earnings statements were doctored. Citi and JP Morgan kept lending it money for the same reason, so its cash leaking could be covered up with loans. And Merrill and other investment banks also didn’t want to lose underwriting business, so they played nice on the analyst side. The same goes for the law firm, Vinson & Elkins. Fees!

Ken Lay was too busy spending his millions to pay enough attention to the shit Fastow was pulling, and Skilling was too arrogant to think the rules applied to Enron, anyway. All of these men were driven by greed as well. And the people who could have stopped Fastow, the real source of the problems here, the only truly, clearly non-passive party, were the accountants and the banks. The whole party would have stopped in the mid 90s or at worst the late 90s if someone at Arthur Anderson had said no, or if a bank had demanded more information.

But here are my takeaways. No matter how many laws we pass, in the end these situations come down to people. And when you have a ring of people driven by greed, no matter whether this one is supposed to be an accountant or a lawyer, trust is irrelevant. There is no defense.

Our economy will always be vulnerable to problems like this. No matter what we do, there will always will be a way to game the system if the stakes are high enough.

All we can do is maintain a healthy skepticism and keep asking questions and try to limit the damage, not eliminate it.

For the life of me, I can’t imagine why these men need so much money. In this world, anything over $5,000,000 free and clear is “fuck you” money and you can quit working and live off of secure investments for life, especially if you’re older.

NHL Bulls & Bears 9/7

BEAR : New Jersey Devils.
Scott Stevens is retiring; Scott Niedermayer is in Anaheim. McGillis and Malakhov are better than warm bodies from Albany, but they can’t fill the void. Patrik Elias is still recovering from Hepatitis–and you have to wonder if Martin Brodeur isn’t due for an off year. Even if he is, this is still a playoff team, and, above all, they have the best GM in the game. The problem there is that he’s up against the salary cap. I’m lowering my target to 42 wins. (Remember, there are no ties this year, and with Marty you have to give an advantage to this team in shootouts.) They are trading at 4.2, which, ironically, is higher than they were trading at the outset of the 2002-03 season (2.0).

BEAR: Detroit Red Wings
Maybe the NHL should get the bear. Can anyone imagine a player like Pavel Datsyuk thumbing his nose at the NHL before the lockout? Henrik Zetterberg is also not yet in the fold. This team is a collection of skating fossils without those two. I’m reiterating my no-playoff recommendation here. They are extremely overvalued at 7.4 on Intrade, good for a trade on short side.

Update: They signed Zetterberg, but this was based on not having Datsyuk and the age of the rest of their team.

Greenspan's legacy.

Most of the time I’m not a big fan of the Nation. I think it’s marinated in the worst of the old Left, namely identity politics and trust-fund baby populism. This article on the legacy of Alan Greenspan is interesting and well-written, but misses the forest for the trees:

The prospects for political reform are gloomier. Democrats tossed away their populist credentials years ago, and with few exceptions are utterly subservient to the Fed mystique. But there’s strong, critical material for the reform-minded citizens and public officials who are not intimidated. What might they say? That the Federal Reserve has violated its basic obligations to democracy and it’s time to revise its peculiar charter. It is wrong for a government institution to sit by silently and watch a slow-motion disaster unfold for citizens, as Greenspan did. It is also wrong–both politically and economically–to ignore the legal mandate and simply serve one realm of the economy over everyone and everything else. In a democracy, government at least owes citizens fair notice–a timely warning of what it’s doing to them. The Fed never, never honors this obligation, for obvious reasons; but then neither do many politicians. That’s the basic reason democratic discourse and accountability are so necessary–the hope that somebody somewhere in the government will have the decency to tell the people.

The problem is not that the Fed isn’t living up to its mission. The problem is that average folks are too exposed to its actions. We have only a minimal social safety net, as many people in the Red States of the Gulf Coast just found out. When economic problems occur, a game of material music chairs occurs, pitting neighbor against neighbor.

Until we guarantee that people can only fall so far, and that those who work full time will have health care and educational opportunities and safe neighborhoods, there’s no point in fixing the Fed.

The Decline Sets In

Since September 11, 2002, when he morphed the War on Terror into the War on Iraq, I have maintained the George W. Bush is the worst President in American history. Unless his successor manages to repair the damage, citizens will look back at the Bush II reign as a time when the fundamental underpinnings of America’s economy, social structure, civic tradition, and domestic defenses were compromised while the nation’s wealth was squandered on an unnecessary war, immoral tax cuts for the wealthiest, and venal domestic spending instead of being utilized to form and lead the post-petroleum world.

Seeing the anarchy in New Orleans, today sure does seem distant from the time when the late reporter David Bloom could shame post-Hurricane Andrew looters in South Florida by pointing a camera and microphone at them, huh? Or from the orderly evacuation and recovery from the Mississippi River floods of 1993.

There is actually little that politicians need to do in disasters save for providing the funding and priorities for the agencies that handle them and coordinating immediate preparation. The administration’s inability to put the able career managers of these events into place with adequate manpower and supplies and the resulting preventable human death, misery, and general destruction is a national disgrace. Lest anyone choose to forget the images of anarchy in New Orleans once they are mitigated, they would be wise to remember its lesson: your home is only one flood, hurricane, tornado, tidal wave, earthquake, eruption or terrorist attack away from chaos.

There was a tiny news item that has already disappeared from the AP wire and did not appear in the morning papers that serves as a touchstone of Bush’s America. Hugo Chavez, the Socialist president of Venezuela, offered 1,000 to 2,000 troops, food, fuel and other assistance for the recovery effort in New Orleans, which the Administration appears to have declined lest they be embarrassed by taking aid from a man they despise and their lunatic fundamentalist backers want assassinated. Chavez’s gamesmanship could be dismissed, if his offer was not so sorely needed. Starved of the ability to care for its own in the wake of a natural disaster, after five years of “President” Bush the United States of America is settling into a great decline.

This is Conservative America

This is Conservative America. Fend for yourself, the poor be damned. This is conservative America where the government is a sham, and it can’t do its job for the public good, without the imprimatur of big business.

The refrain in the media is “where are the troops?” Well, maybe if you had been covering Iraq, you’d know, but no one cares about Iraq either. The Astrodome is full… why not just send these people to Gaza for christ’s sake?

And of course, when the few search and rescue officials said they simply couldn’t stop the looting, Hannity and other conservatives showed all the black people they could looting, pressuring the resources there to be stretched even tighter to make it look good for white America instead of doing what they need to do.

And just like 9/11, the administration claims that no one could have anticipated it, but the same people who anticipated 9/11 anticipated this. Why does America tolerate thsi incompetence? Greed? Racism? Stupidity? Who knows, but our civilization is falling apart, one piece at a time.

Katrina and Oil Peak

The USA owns about 5 – 6% of the world’s oil producing capacity. Approximately 1/3 of that is in the Gulf. So, Katrina took out about 1.66 – 2% of the world’s oil capacity. An immediate run up in prices is epxected in the USA because of its proximity to the disaster and the crippling of the oil transporation infrastructure (pipelines, refineries) for a large chunk of the midwest and southeast. All told, however, this disaster represents a windfall for the world’s major oil producers. New Orleans and other effected areas represent a vanishingly small amount of the world economy, and over time natural disasters are good for GDP anyway (The $10.5 billion that congress appropriated is pure GDP upward arrow that would not have happend otherwise). So, with prices momentarily punched upwards, large producers like Saudi Arabia have an opportunity to make up for the lost Gulf production and make a tremendous profit.

If Saudia Arabia and others step into this new market then gas in the USA should settle at a national average of $2.80 or so a gallon in three months (Pre-Katrina they were about $2.69, so $2.80 represents price increasing as it was previously plus the extra USA cost of having to import more refined oil). If prices continue to stay at current Katrina Panic levels or above on Dec. 1 then it is a tell tale sign that OPEC countries inexplicably won’t reap the benefits of these artifically high prices, or, that they can’t.

What is and isn't a free market.

I’ve heard a number of criticisms from folks of various political stripes complaining about the Hawaii gas price caps. First, let’s be clear on what they’re capping. They’re not capping the price at the pump. They’re capping wholesale prices. Here’s the key fact: there are only two refineries in Hawaii. Two refineries does not make a free market.

Markets become efficient when markets have a lot of participants. The more participants, the more information is put into the price, and the harder it is for cartels to form. None of this is controversial, left-leaning economics.

Now I’m not trying to make a jump between “free market” and “efficient market.” I’m just giving a charitable interpretation to the critics. If they really support laissez-faire at all costs, they should tell people that. They should say they’re against government interference because it interferes with the right to profits, not because it doesn’t work out well for everyone — if that’s what they mean.

Assuming they are trying to get efficient markets, then the conditions have to exist. You need arms-length buyers and sellers, and volume. Even if you imported refined gas to Hawaii, you would only have a small number of shippers available, even if you thereby opened up access to more refineries.

I’m willing to believe that on Oahu at least, there’s enough retail competition to prevent cartel behavior, and, therefore, market efficiency will do the best to keep retail prices at the right level.; but I don’t think anyone can say that about wholesale.

And let’s just remember this: except for Iraq and the Gulf of Mexico, the rest of the world is still pumping along the same way they were when gas was $10/barrel. You can see the margin there.