Thursday, July 10, 2008

Breathtaking Chutzpah

Apparently airline executives are asking frequent fliers to "rein in oil speculators" in an attempt to moderate oil prices. Not only are they apparently ignorant of how markets actually work, but these executives each have a staff of finance professionals whose very job is to speculate on the oil market to ensure stable long term prices for fuel. Talk about rank hypocrisy.

Of course, I'd expect that a group of companies that has sucked so long and hard at the public teat would have a little trouble understanding how free markets work. They haven't lost money for the past fifty years for no reason, after all. I just didn't expect them to be so openly hypocritical about it.

Here's a hint on the off chance that an airline CEO is reading; the reason oil futures are so volatile isn't due to speculators. It's because governments control a huge portion of the world's oil supply, and hence if you want lower, more stable oil prices, you need to free oil production from the grubby hands of government.

It might also help to get airline CEOs' grubby hands out of the public purse, too. I have to wonder how much less fuel the airlines would need if the air traveler paid the full cost of his ticket.

1 comment:

Marklark said...

The trading of & securing of fuel futures seems to be one of the "secrets" of the success of Southwest Airlines. http://www.wired.com/cars/futuretransport/news/2008/07/portfolio_0708