I’ve been reading Rob Bradley’s Oil, Gas, and Government: The U.S. Experience, which is a detailed history of state and federal intervention into the petroleum industry.  (As you can imagine, the two-volume work is some 2,000 pages long—who says our politicians don’t get anything done?)  Bradley explains that during the Korean War, the government instituted price controls on inputs used in the oil industry.  As always, the price ceilings led to massive shortages, so that the government then had to allocate the supply of resources to the various users, who had to fill out endless forms and paperwork.  I thought PRI’s readers might enjoy the following exasperated response that an independent oil man put on the form for requesting materials:

Lately I’ve noticed an annoying trend in financial commentary on oil prices.  These articles make it sound as if the movement of oil prices and the strength of the United States dollar (USD) have nothing to do with each other.  For example, the Tuesday Oct. 23 Wall Street Journal has a story on Asian countries that states:  “The recent decline in the value of the U.S. dollar—and parallel rise in the value of some Asian currencies—has also given Asian consumers more power to spend liberally on fuels, because oil is typically priced in dollars and therefore cheaper to buy” (A2, italics added).

An article in the Examiner reports that Google this week removed advertisements critical of MoveOn.org from its AdWords advertising network.  What could possibly motivate a company with the motto "Don't be evil" to censor the free speech of its customers?  Ultimately, Google bowed to the same two forces which led it to block access to thousands of sites in China: politics and money.

The main Pacific Policycast page, where the episode resides, is here. Finally, you may download "Hysteria's History" here.

A special commission of the National Association for College Admission Counseling met last week to discuss the usefulness of standardized tests in college admissions. According to an article in Education Week, the commission would not vote to remove the SAT as an admissions requirement. However, there were many who advocated making the test optional and some who did suggest its removal as a qualification for admission.

Whenever government interferes in a market, you can be sure that prices will be distorted.  Either prices will be artificially inflated and harm consumers, or artificially low and harm producers.  In the case of fuel ethanol, it seems the government has given us a "two-fer." The New York Times reports on the price situation for corn ethanol as a fuel substitute and the harm that farmers are suffereing.  The suffering stems from their heavy investments in ethanol production facilities creating a serious glut of production with a resulting massive drop in commodity price.  Those investments were made in direct response to government mandates and extra-ordinarily high tax subsidies.