- The Washington Times - Friday, September 22, 2000

Increased OPEC production won't lower prices much

Your editorial "Fiddling while oil prices rise" and Gwynne Dyer's Commentary column "Oil price aftershocks," both on Sept. 13, are accurate only in part. The Organization of Petroleum Exporting Countries has no monopoly on crude-oil supply, as it commands less than a third of the world market. True, it represents a bloc that can influence the price to some extent, especially when the market is tight, but the interests of its members are often in conflict. Countries with limited stocks (the majority of its membership) would rather have higher prices now, whereas others, such as Saudi Arabia, with a relatively high reserves-to-extraction ratio, tend to be happier with lower prices because they are interested in the longer run. When the oil market weakens, conflicting interests of OPEC members frequently lead to oversubscribing of agreed-upon quotas, a behavior often labeled as cheating, and the epithet cartel applied to OPEC then becomes risible.
An increase of extraction by 800,000 barrels a day (the latest number indicated) represents some 3 percent of OPEC's exports but only about 1 percent of world consumption and cannot be expected to make much of a dent in oil prices. Just as the United States has legitimate interests in safeguarding its strategic oil reserves or protecting the Alaskan environment, individual OPEC members have their own priorities that may cause them to limit extraction, thereby saving their main natural asset in ground. Most of these countries are poor and cannot be expected to subordinate their interests to those of others without some quid pro quo.
Gasoline prices at the pump in most consuming countries are in large part made up of taxes, and the United States has maintained some of the lowest prices worldwide. This has over the years encouraged waste and inhibited the search for substitutes. We forget that oil is a depletable resource, bound eventually to vanish, and active policies should have been put in place long ago to rationalize its use and encourage the development of more enduring energy sources. We panic when prices soar, but once the panic is over, we do nothing long term. Laying the foundations of a post-fossil-fuel age, which should have been a major concern of the Energy Department, would introduce a stability from which both sides of the market would benefit.
Miss Dyer's careless assertion that "OPEC forced the quintupling of the oil price [in 1973]… and threw the world into a deep recession" is false. In fact, OPEC's exports significantly expanded in 1973-74 at the time of the Middle East war, and it was only the subgroup of Arab countries within OPEC (and interestingly they were not even unanimous) that denied exports to certain countries perceived to be aiding the Israelis. Several academic studies since have shown that OPEC's pricing policies have tended to follow (and not lead) the market, but members of OPEC like to think of themselves as important, deriving much satisfaction when the media attributes to them market powers that are extremely exaggerated.

Thomas Paine backed school vouchers

School vouchers indeed have a venerable place in the history of liberalism, as Christopher Prawdzik says in "Liberals for school choice" (Op-Ed, Sept. 18). In fact, history shows they are older than public schools.
They were proposed by Thomas Paine in "The Rights of Man," which was published on March 13, 1791.
Paine wrote that the government should pay "to every poor family … four pounds a year for every child under fourteen years of age; enjoining the parents of such children to send them to school, to learn reading, writing and common arithmetic; the minister of every parish, of every denomination to certify jointly to an office, for that purpose, that this duty is performed."
Chevy Chase

Column unfairly tarnished doctors who are dedicated professionals

The Sept. 1 Op-Ed column by Jonetta Rose Barras, "Care-less hospital," not only is libelous, but smacks of unbridled and reckless disregard for the whole truth.
Three school services have always guided D.C. General Hospital professionally: George Washington, Georgetown and Howard universities. There are two medical schools at D.C. General Hospital: Georgetown and Howard universities. The medical staff is selected from among the brightest, with dedication to serve at tremendous human sacrifice.. The individuals named in the column Dr. Norma Smalls and Dr. Easton Manderson are on call 24 hours a day and are available on demand in trauma at a moment's notice. There is an inordinate exposure to AIDS and hepatitis because the patients they serve are at increased risk.
To declare that Dr. Smalls and Dr. Manderson are negligent in their performance of duty without a finding in court proceedings is libelous and deserves censure. These doctors always have performed at the highest level of professionalism.
I always have respected Miss Barras, but this time she has overstepped the bounds of journalistic propriety and good judgment; she has gone too far. She would have served her purpose well if she had decried the city government under Mayor Anthony A. Williams for denying health care to the needy.
corporations running the
Division of Cardiothoracic
and Vascular Surgery
Howard University

Social Security is not the 'losing deal' columnists would have you believe

Conservatism is about truth and facts, not ideology. That's why Donald Lambro's Sept. 4 Commentary column, "Why Social Security is a losing deal," is disappointing. Mr. Lambro cites the Heritage Foundation's Web site (www.heritage.org/ socialsecurity) and tells us that present workers will get a very low "return" (typically 1 percent, or even negative) on their lifetime Social Security contributions.
That Web site is fun to play with, but, like Mr. Lambro, it gives short shrift to the structural reasons why the "return" is low. If I have $1,000, spend $900 of it to support my poor grandmother and invest the remaining $100 in a CD at 6 percent yield, my "return" on the $1,000 is only 0.6 percent. That's because I didn't invest all of the money. I spent most of it. Social Security is the same way. It's underfunded. Much of the payroll tax goes out the door to pay benefits to current retirees. I believe elderly retirees now get a large positive "return" on their past contributions. The Web site doesn't tell us this; it declines to answer for anyone now 66 or older. Why is that? Shouldn't we have full disclosure? If individuals working now are allowed to withdraw their support from the system, how will benefits to today's elderly be paid? We need to answer that.
Cal Thomas ("When truth becomes a negative," Commentary, Sept. 6,) says, "There is no 'investment income' in the Social Security program." That's false. The system has a temporary positive cash flow and is building up a trust fund of U.S. bonds otherwise we wouldn't be discussing possible alternative investments. (If your asset base is zero, it doesn't matter how you invest it.) Such ridiculous statements appear often in The Times without rebuttal, and they're not a credit to the conservative cause.
It's well-known among experts that Social Security isn't sound actuarially, that it hasn't treated different generations equally and that the benefits formula is tilted toward low-income people. We should explain this to voters and tell them the whole truth. Most people understand that you can't get something for nothing. If voters don't like some of these features, they have themselves to blame for electing irresponsible Democrats. We are saddled with a flawed system for historical reasons. Social Security is popular, and it's trying to make the transition from a Ponzi scheme to one with an asset base. Conservatives need to figure out a way to make that happen.

Sign up for Daily Newsletters

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide