Loyola University Economics Club Blog



This blog, run by the Loyola University New Orleans Economics Club, creates a running discourse on the philosophy and application of a broad range of economic matters.

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Quote of the Month

"Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place."--Frederic Bastiat


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Advisor: Dr. Walter Block
President: James Ianelli
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VP: Patrick McDermott
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Wednesday, December 21, 2005
The Trouble with Boies

 Under the auspices of  the Alaska Gasline Port Authority, David Boies filed suit against ExxonMobil and BP Monday afternoon alleging "collusive" business practices.  The same man that insiduously attacked Microsoft for lowering prices and providing superior products and services now has the gall to further mire American industry in another anti-competitive three-ring circus.  Boies claims that ExxonMobil and BP have colluded to "warehouse" natural gas from Alaska to drive consumer desperation and prices up.  The port authority wants to ship the resources from the North Slope oil field and argue that Exxon and BP opted to instead build a pipeline through Canada allegedly in order to choke the flow of the already expensive "translucent gold." 

   This apparent outcry on consumers behalf, however, amounts to nothing more than politics as usual.  Mr. Boies' cabal relies on the preposterous assumption that they have greater insight into the resource delivery business than the professionals.  Exxon and BP have far more at stake in heating the homes of Americans over the winter than bureaucrats looking to ride the latest crest of publicity.  BP spokesman David MacDowell was quite correct in asserting that, "no one else is as motivated as the resource owners to build the lowest cost, most efficient transportation system possible."   

   The delivery of natural gas from the North Slope of Alaska to the Midwest has been an extremely complex and expensive undertaking.  BP and Exxon have invested millions of dollars in the project to efficiently provide Americans with natural gas.  If it happens that they held imprudent expectations about the best way to serve consumers, they will be held accountable through a diminished profit margin and market share.  It their expectations bear fruit, the oil companies will reap the rewards of their risky investment.  Clearly Exxon and BP hold a vested interest in the long-run supply of natural gas to the United States.  Employees have their jobs on the line.  The same cannot be said for Boies and the port authority. 

   Regardless of future labor allocations, it's safe to bet on the greed of private industry to supply the resources in demand, not the cursory benevolence of the anointed statists.  That very greed condemned by fiddling politicians brought us the automobiles, medicines, and tax base we have today.  Such progress won't stop with gas.  This begs the obvious question: what have Boies and his confrere done for us ever


Posted at 07:28 pm by James Ianelli

Name
December 21, 2005   09:47 PM PST
 
Government works according to two principles:

I.
If it moves, tax it. If it moves too fast, regulate it. If it moves too slowly, subsidize it.

II.
Charge too much, jailed for taking advantage. Charge too little, jailed for predatory pricing. Charge the same, jailed for collusion.
 

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