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Rush Limbaugh

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RUSH: I just checked the e-mail and I’ve got some people arguing with me about freezing gas prices. “Rush, we need those prices frozen. It’s gotten way too expensive. You’re wrong about this. Freezing gas prices would help!” I’m glad you wrote me, and I appreciate the opportunity here to explain something to you. I want you to listen very carefully. I’ve gotta put this in context. Forget the laws of economics — which are always going to rule here, rule the day. The laws of economics will and that will eventually be where I go here. But let’s first talk about the context. What do we have here? We have six-dollar gasoline in Atlanta, for example. We’ve got rumors all over the Southeast and East that they’re running out of gas. There isn’t going to be any gas. What is this causing? This is causing panic. This is causing people — there were 40 and 50-car lines at gas stations in Atlanta during the afternoon rush hour yesterday, and it’s going to be happening all over the place and people are going to be lining up to get gas because they think there isn’t going to be any. Okay, in the midst of all that, here comes some brilliant idea to freeze gas prices. Now, two questions. In the context of the existing panic, what is the freeze of gas prices going to do? It’s going to cause even more people to head to your local gas station; it’s going to lengthen the lines and it’s going to cause the gas supply that’s already there to evaporate even faster. If you think freezing gas prices is a great idea, Senator Nelson’s idea, if you think that’s a great idea, if you want to run out of gas twice as fast and sooner than you ever hoped or thought you would, then freeze the price today and you’ll find out by Sunday you won’t be able to get any. You freeze the price, and it has a market impact, folks. Supply and demand.
If the price is allowed to fluctuate according to the laws of supply and demand, they always work, if meddling hands are kept out of the way. If you just keep your hands off of it and let the price go as it does, there will be an impact, and there will be a reaction, and it will cause less lines, it will cause less panic in the long run than freezing the price, because freezing the price would just compound the problem that exists today because the problem is not price. The immediate problem is not price. The immediate problem is supply — and when you interrupt supply, that means you have less of it; the law says the price is going to go up, and that’s exactly what’s happening. Then you’ve got our friendly liberal Democrats rushing in, typically and predictably blaming Big Oil and gasoline station owners for gouging, and there may be some of that. That doesn’t explain the price rise, and it’s not going to be any solution. You can stop the gouging; you’re not going to do anything to affect the supply. Not one thing, folks. Supply has nothing to do with what’s going on at the Big Oil companies or the gas station dealers, not in the big scheme of things. In fact, Steve Forbes — let me find this. I put this in this stack. Where did I put this? Real close here to the top. Yeah, here we go. This is from the UK Daily Telegraph: “Steve Forbes, the billionaire business publisher, predicted that the oil bubble will burst inside a year, and the price will plunge as the impact of Hurricane Katrina sent the price of oil soaring to new record levels.
“He spoke as Katrina shut down almost all the flow from the Gulf of Mexico, which provides over a quarter of the US oil. He said, ‘I’ll make a bold prediction. In 12 months you’re going to see oil down to 35 or $40 a barrel. It’s a huge bubble. I don’t know what’s going to pop it but eventually it will pop. You cannot go against supply and demand. You cannot go against the fundamentals forever,'” and he’s talking about the bidding up of the price of oil on the futures market which has nothing to do with supply and demand. There is some tremendous panic bidding going on at the NYMEX, which is the futures market, and it’s bidding this stuff up well beyond 70 bucks, but it’s going to come down — and people are not going to believe it when it happens. They’re going to be stunned. “Well, why is Big Oil giving away all these profits?” But it is going to come down. I, frankly, think that one of the large factors will be this interruption, because at some point the interruption is going to be over and the supplies are going to trickle back to eventually normal, and that will cause the price to come down. The laws of supply and demand work every time they’re tried, if you just keep your hands off of them — and that’s the danger posed by the left. They think that they can change those laws of supply and demand just like they think they can change the laws of Mother Nature.
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