National Review Accuses Andrew Samwick of Do-It-Yourself-Economics
Actually, I suspect that Iain Murray failed to read the post by Andrew Samwick before Iain wrote:
The aftermath of hurricanes Katrina and Rita have proved a massive breeding ground for what former OECD Chief Economist David Henderson has termed “Do-it-Yourself Economics” (DIYE), which he defines as “firmly held intuitive economic ideas and beliefs which owe little or nothing to textbooks, treatises or the evidence of economic history.” … The reason for keeping the price high, the Times asserts, is twofold: to defund the paymasters of terrorism in the Middle East and to combat global warming.
Dr. Samwick, however, pointed out two papers by Professor Jayanta Sen. One addressed global warming and the other suggested:
A buyer’s cartel could be formed by the governments of the major oil importing countries like the U.S., Japan, Germany, China, India etc. All oil sold in these countries would have to pass through the buyer’s cartel. The buyer’s cartel could negotiate a price with the oil exporting countries, say $10 a barrel (which should be a sufficient markup over production costs). After purchasing oil from the producing countries, the buyer’s cartel would release the oil in the market and let demand determine the price. If current demand conditions remain unchanged then the price would still remain at $65. However, this would reduce the effective price to the citizens of the importing countries to $10 a barrel as their governments would earn a profit of $55, which could be used to reduce taxes or pay for programs like Social Security. For the U.S. (which imports 10 million barrels a day) the savings would be $55 x 10 million x 365 = $200.75 billion a year.
The National Review is so used to writing Do-It-Yourself-Economics, they fail to realize the fact that Dr. Samwick was referring to the writings of an economist at Ohio University.