Oil prices never fall, says promoter of economic plan

Aug. 7, 2017
Democrats trying to reclaim political ground with a new economic pitch need a salesperson knowledgeable about economic affairs.

Democrats trying to reclaim political ground with a new economic pitch need a salesperson knowledgeable about economic affairs.

With Senate Democratic Leader Chuck Schumer, they don't have one.

The New Yorker and other party stalwarts unveiled their Better Deal program July 24 in Berryville, Va., hoping to usurp the populism that made Donald Trump president.

They propose to create 10 million jobs with infrastructure work and tax credits for compliant employers, lower drug costs with toughened regulation, and fight corporate concentration by resisting mergers.

It was on merger resistance that Schumer demonstrated his imperfect grasp of business conditions.

Interviewed by George Stephanopoulos on ABC's This Week the day before the Berryville event, Schumer said workers suffer and prices rise when large companies combine.

"The old Adam Smith idea of competition, it's gone," he averred, noting unnecessarily that people dislike increases in cable bills and airline fees.

"When the price for oil goes up on the markets, it goes right up but it never goes down," he then proclaimed. "How the heck did we let Exxon and Mobil merge?"

Never goes down?

To be fair, the price of Brent crude is today higher than the $19.17/bbl it averaged in November 1998, when the two big companies merged. In today's dollars, that's about $29/bbl, which means, yes, Brent was about $18/bbl higher when Schumer spoke.

But it was "down" considerably and painfully from a peak of $143.95/bbl in the panicked market of July 2008 and from the $97-112/bbl range within which it traded from 2011 until the market collapsed in mid-2014.

The suggestion that the Exxon-Mobil merger caused those gyrations is laughable.

What's not funny is the consequent devastation to an industry still contracting.

As Schumer declared oil prices never fall, oil companies reported plans to cut already-lean budgets. Service companies announced more layoffs.

"Economics, George, is our strength," Schumer assured Stephanopoulos.

After his performance, Democrats in oil-producing states should be fetching bags in which to insert their heads.