Ritual Debasement

by Vin Suprynowicz
by Vin Suprynowicz

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There are precedents, though they’re weird.

In some ancient cultures, we’re told it was customary to choose one or more citizens of the city and treat them as royalty for the period of one year. Freedom from labor, the best food and drink, a free hand with the temple prostitutes, whatever.

Then – on some particularly propitious day, usually tied to the annual cycle of crop fertility – the otherwise “lucky” individual would be doped up and have his head cut off, his blood being ceremonially drained into the ground as a sacrifice to the gods of crop fertility, or whoever else was held to be in need of some urgent supplication.

The notion that such rituals may have survived into modern times provided disturbing metaphors for Shirley Jackson’s play The Lottery, and later for films including The Wicker Man.

In more modern times, of course, actual kings and tyrants have showed little sense of humor over suggestions that they actually have themselves slaughtered to propitiate the divinities, though pale echoes of the practice survived at least into the Middle Ages, King Henry II donning sackcloth and walking barefoot through the streets of Canterbury as 80 monks flogged him with branches as atonement for his role in the murder of St. Thomas Becket. Stuff like that.

We may think we’re well past such rituals of debasement, but consider how hard it would be, today, for a Harvard-educated lawyer more comfortable at lawn parties featuring Brie and Chablis to get elected president of the United States with publicly donning a silly hat to attend a baseball game and a stock car race, subsequently pretending delight as he or she chomps down on a kielbasa sandwich in Chicago and a “Philly sub” in South Philadelphia. (John Kerry asked if they came with anything other than “Cheez Whiz.” He may have actually mentioned “brie.” It was all downhill from there.)

Other modern rituals of debasement include the political grilling by the opposition party of candidates for the federal bench (who serve, for the occasion, as surrogates for the president whom the senators would rather be skewering) and at least one other modern example, surely one of the most weirdly ritualized, on display in Washington again May 21.

Once again on that date, as Americans snarled at news that gasoline and other fossil fuel prices will make their summer vacations far more expensive (if they can afford them at all), a bunch of U.S. senators who probably couldn’t run a major U.S. corporation for a single day – many of whom have never shown a profit running so much as a shoeshine stand – demanded that the executives of America’s five largest oil companies be trooped in like sleep-deprived defendants trying to hold up their oversized trousers at one of Stalin’s show trials for “hearings” in Washington, where the lawmakers in turn snarled, lambasted, and berated these heads of free-market private firms, demanding to know the dollar amounts of their salaries, and how on earth they can justify their firms’ obscene, unconscionable profits.

“Where is the corporate conscience?” howled Sen. Dick Durbin, D-Ill.

Do oil companies set aside a higher percentage of their incomes as profits and dividends than other corporations whose stocks compete for investment capital on the same markets? No.

Does the implied threat of government action make any legal or constitutional sense? No.

There are no laws limiting private corporate executives’ salaries (though these same senators seize and spend almost half those salaries through their tax policies) nor limiting private corporate profits either by dollar amount or by income percentage. Nor are any such laws likely to be enacted, anytime soon.

Does any of this make any economic sense?

No. If every one of the top five executives of every major oil company in the country worked for free for the next year, the price of gasoline at the pump would not drop by a single penny. If oil companies substantially reduced their profits and thus their stock dividends, investment would fall, making it harder for them to afford exploration for and development of the new deposits necessary to keep supplies flowing. Supplies would drop; prices would go up.

On the other hand, if the senators were to halve the federal excise tax on gasoline, they could drop prices at the pump by more than a dime, overnight, all by themselves.

For that matter, oil prices hikes haven’t been nearly as onerous, nominally, in Europe, since the value of the Euro is not being devalued by government policies there as fast as the dollar is being cheapened here. American gasoline prices are actually down over the past 70 years, if measured in a constant dollar (the kind Congress could and should have maintained for us) at 1/20th of an ounce of gold.

Yes, the senators might get carried away and enact a “windfall profits tax” on “excessive” oil profits. But not only would that further drive up prices at the pump, it could also drive investment capital away from domestic oil producers – thus encouraging more imports and further damaging our balance of payments.

Alternatively, the senators could demand that “Big Oil” be broken up into smaller, competing firms – except that they already did that, in 1911, creating at least 35 separate companies including Atlantic (now ARCO), Chesebrough Manufacturing, Conoco, Continental, Marathon, Mobil, Pennzoil, Sohio, etc.

The oil executives, while hanging their heads and docilely going along with the ritual for the most part, did find their spines long enough to respond to direct questions including “Is there anything you can do to lower gasoline prices?”

But when they timidly asserted it might help if they were allowed to drill proven reserves offshore or on Alaska’s north slope, the senators made it clear they “weren’t having any of that” nonsense.

What? Introduce simple economics, the laws on supply and demand, into a ritual that’s all about generating video footage of the senators waving, howling, and dramatically “doing something” about their constituents’ ire against how little gasoline their shrunken dollars will now buy?

The nerve!

Meantime, if the letters-to-the-editor we’ve received on the topic typify the public’s understanding of economics, the show trials are working just fine.

Supply and demand can’t be having any impact on prices, one consistent line of argument goes, since gas stations have plenty of gasoline. Obviously, “supply exceeds demand,” so prices should be falling.

(By this argument, gold wedding rings should cost less than copper pipe which should cost less than dirt, because the jewelry stores never seem to run short of gold wedding rings.)

Running a close second to this argument is an ongoing drumbeat that the politicians must be “fixed,” since they’re “allowing” the gas stations to raise prices as high as they want.

What mechanism the congresscritters should be using to “prevent” these price hikes is never quite made clear. The same power the Indiana Legislature used in 1897 to declare that from now on, instead of a confusing 3.1416, “pi” would equal the simpler “3.2,” I presume.

The grilling of the oil executives is a very odd ritual, perhaps serving some of the same function as corrupt Roman senators in their day distracting the populace with bloody games in the Colosseum. And now that the Federal Reserve is so debasing the dollar that it also takes four or five of them to buy a single loaf of bread, think for the potential future spinoffs:

By next year, will we see the senators call in and berate for their shameless salaries and obscene profits America’s bakers? Her orange growers?

As Ray Davies once asked, “Who’ll be the next in line?”

June 2, 2008

Vin Suprynowicz [send him mail] is assistant editorial page editor of the daily Las Vegas Review-Journal and author of The Black Arrow.

Copyright © 2008 Vin Suprynowicz

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