At the last presidential debate, Barack Obama said a few things that made my skin crawl. First, he proposed forcing oil companies to either drill on their U.S. reserves, or he would nationalize those oil reserves. The phrase he used was ‘Use it or lose it.’ I’m astounded that this hasn’t gotten more press play as it shows a clear disregard for property rights in an economy based on the inviolate provision of private ownership.
Dictating the usage of oil assets to an oil company is akin to Obama telling a family with two cars that if they don’t use their second one more often, he’s going to confiscate the second car… even if (to extend the analogy) the second car is an S.U.V. and gas is $4/gallon.
Similarly, if it costs $100/barrel to extract oil from the ground and it would take a certain number of dollars and years to develop that oil field, the oil company is going to look at their other opportunities to decide if they should develop the oil patch. They’ll make an economic decision (just like the family garaging the S.U.V.) whether to employ that asset.
Back to the debate, Obama claims that if he or congress does not like that decision, they’re going to simply repossess the oil fields. Now that is socialism!
Yes, I’m aware that Oil companies are the current ‘Big Bad,’ but if he doesn’t understand the principal of property rights for oil companies, what’s to stop him from dictating crop decisions to farmers, programming decisions to media companies, or employment decisions to citizens?
Originally posted on my blog: ByronClarke.com