Leave it to markets to do what political poseurs can't.
The most recent example: crude oil, which has gone in a very short span of time from an unstoppable bull market that threatened to tank the global economy to a potentially grinding bear market that just might reverse prices at the pump:
Rising fears of recession were blamed for sinking crude, which has joined the broader commodity complex in giving back a large chunk of the gains seen in 2022 after Russia's invasion of Ukraine.
“Oil is getting decimated with little new information about production or consumption. Still, with commodity traders turning very risk-averse due to growing demand and still hawkish Fed policy concerns, the recessionary headline risk is like an anvil around the market's neck,” said Stephen Innes, managing partner at SPI Asset Management, in emailed comments.
The dreaded “R” word – recession – can spook markets and pols alike. But where they differ is markets can react in real time to fears (real and imagined), data and reality. Politicians react to…fears. About their jobs. And not much else.
This doesn't mean that markets are fine-tuned machines that always get the story right (there's a reasonable argument that crude's fall has been overdone and higher prices are bound to return).
But compared to the panicked antics of politicians in the face of higher prices, the market's moves are smooth, rational and effective.
And as George Mason University economist Don Boudreaux reminds us, market prices are information. That information helps market participants decide what to do next:
Producers and consumers continually respond to this information by adjusting their decisions at the margin. Prices change accordingly. Each adjustment tends to improve resource use. Such decentralized, local adjustments that improve resource use are the best that humans can achieve.
Or looked at another way: this is something no politician, bureaucrat or government can ever hope to do. But they insist on trying…to the detriment of us all.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
Please help biden increase our oil production, China and the biden crime family need the money, Why does Biden want to increase oil production from America? so the biden family can sell it off to China for personal gain?Congress should be asking the biden tcrime family for those answers and more.What does China have ob the Bidens? Time for Congress and Amrtoca to start to get those answers.