Mark Steyn Rates The New 11 Minute Record By Joe Biden & The Fungible Exigencies
HH: We are lucky this Thursday, because we begin this hour with Mark Steyn, Columnist To the World. You can read everything Mark writes at www.steynonline.com. He’s just back from his role as typecast – majordomo to Donald Sutherland in The Hunger Games. Mark, welcome back, it’s good to have you.
MS: (laughing) Great to be back with you, Hugh.
HH: Now it’s Lent, and that means people have to do penance. And your penance is we’re going to make you do color commentary to the epic Joe Biden answer, which I gather from Duane you’ve not heard.
MS: Oh, no, no, but I’ve heard about it, and if this is penance, I’m lapsing, I’m catholically lapsing in the opening sentence of Joe Biden.
HH: All right, we’re going to start with the Q and the A at about a minute, and then we’ll just go back and forth as the spirit leads us. Here’s Joe Biden earlier this week.
Q: My question is why is the prices on gas increasing?
JB: Hey, man…he obviously has a car. Hey look, it’s complicated. You’d fully understand it. I’m going to give you a brief answer and remembering that famous admonition of Samuel Clemens. He said all generalizations are false, including this one. But I’m going to give you as quick and as straight as I can. Number one, number one, the international, to use a fancy word, exigencies of the oil market are amazing. For example…
HH: Stop right there. Now we’re only 15 seconds in, Mark Steyn.
MS: Okay, I just like the way he says that, actually, what is it? Exigencies?
HH: The international exigencies or whatever.
MS: The international exigencies (laughing). I hate them, whoever they are.
HH: All right, back to the answer.
JB: Every time there’s talk about war with Iran, a major oil producer, because Iran says if there is war, they will take out the Saudi oil fields, and the Bahraini oil fields, they will attack them, every investor, the big guys who make these judgments about the futures, it’s called the futures market, who say well look…
JB: We’ve got a hedge a boom…
HH: Okay, stop. Whenever he laughs, I’m going to stop the tape.
MS: No, no, no. Wait a minute. So he’s like, it’s called a futures market, right? But then does he explain what a hedge is as well?
HH: Not yet, no.
MS: So wait a minute here. Just let me see if I follow where he’s going on this. It’s that every time we threaten to get annoyed about the Iranian nuclear program, and that would lead to us possibly blockading Iran, which would lead to Iran possibly seizing the Saudi oil fields, is this where he’s going on this?
HH: This is where he’s going, but listen a little bit more.
MS: How nice the market is already priced that in. Is that what he’s telling us?
HH: He is.
MS: It’s gone up to $4 bucks for gas because…that is the best news I’ve heard. Bombs away. Mahmoud Ahmadinejad, go for it, topple the House of Saud. As Joe Biden sees it, the market’s already priced it in. Excellent.
JB: …that happening, so we’ve got to assume that oil may go to, it’s not high, artificially high at over $100 dollars a barrel. It could go to $200 a barrel, and so…and all that…
JB: …what it does, it drives up the price of oil in anticipation…
HH: So we were wrong, Mark.
MS: Right, right. I thought, it just goes to show. No wonder the answer took eleven minutes. I thought we were in the clear therer.
HH: All right, keep going.
JB: There is enough supply. And so what’s going on now are two things that no president, Democrat or Republican, can control. One is called the Arab Spring. You all know about that.
JB: What happened in Libya, what happened in Tunisia, what happened in Egypt.
MS: Oh, right, okay. So wait a minute. Wait a minute, Hugh. So we’ve moved on now from instead of Iran toppling the House of Saud, that’s just one reason why it’s going to $200 dollars a barrel, but now the Arab Spring, that may cause it to go to what, three, four, five, seven hundred dollars a barrel or something like that?
HH: We’re only a minute in. We’ve got ten minutes of threats to go, Mark Steyn (laughing)
HH: Back to the throne.
JB: What happened in Bahrain is happening now, etc. Now they are the oil, some of the biggest oil producers in the world. So when the war in Libya occurred, Libya was a producer of a significant amount of oil. When the rebels attacked, and the world supported them, that oil came to a screeching halt. So that was a lot less oil on the international market. I’m treating this answer like I would if I were answering on Meet the Press. I hope I’m not offending anybody by just going straight to it, but here’s the deal. Oil is what they call fungible.
JB: That means that it has a world price.
MS: No, no. Now this is where it gets interesting, because I think when you look at what’s happening here, Hugh, I would tend to blame it on the fungible exigencies.
HH: There are fungible exigencies everywhere.
JB: Yeah, the Fungible Exigencies – I saw them playing in Atlantic City back in 1988, and they were great. The Fungible Exigencies. Where’s he…so what he’s saying is that if we threaten to attack Iran, then the market is pricing in the cost of Iran destroying the Saudi oil fields, setting them ablaze. If, on the other hand, we support the rebels in Libya in toppling Gaddafi, that in itself causes the market to raise the price of oil. And what about Tunisia, because all that Tunisian oil that’s out there, you know how it is at the gas station, all that good, cheap, plentiful Tunisian oil, what happened to that? That was the spark that lit the Arab Spring.
HH: Mark, have you ever had to grade an exam of a student who had no idea what they were talking about, but had to fill a blue book?
MS: No, I love…
MS: Well, funnily enough, I was at Hillsdale College a couple of days ago, and while there are very hard-working students there, you do recognize, I always recognize, in part because I was a guy like that myself when I was back in high school, when a guy is just totally bluffing. He has certain words, he has words like fungible, he has words like exigencies. He doesn’t quite know how to connect fungible with exigencies, but he’s going to give it his best shot. And then he has this thing. There’s what we all in the business a futures market. I haven’t seen the video, but I certainly hope he made air quotes when he did that.
HH: Back to Joe Biden.
JB: The price for oil in Saudi Arabia, and a price for oil in Canada and a price for oil in Latin America, it’s all one price, because you can go anywhere and pick it up. So it’s all the same price. Now…
JB: …what’s happened is that as this discontents occur, no one knows where that Arab Spring is going to go. Let me give you an example.
JB: Egypt – Egypt had this revolution.
MS: Right, right. So what he’s really saying here is so as I, when I began the sentence with fungible exigencies in it, no one has any real idea where that sentence is going to go.
HH: We still don’t know.
MS: And wait a minute. What I like, I like the way he goes, you know, he goes on about the Iranian oil, the Libyan oil, the Canadian oil. But he doesn’t say wait a minute, he says America saber rattling in Iran drives the price of oil up. America supporting the Arab Spring drives the price of oil up. By the way, this is all his administration’s foreign policy.
MS: And then just, he denies himself the crowning glory about the Canadian oil. He’s the one who says oh, you know, we’re not going to bring the Keystone Pipeline down from Alberta through the United States. So instead, they’re going to build, they’re going to put a pipeline to Vancouver, and put it on ships to China. How come you don’t want to take the credit for that, Joe? All that great Canadian oil going over to Beijing?
HH: A little more Biden before the break.
JB: The revolution occur, they threw out a dictator, they threw out a long line of folks. The military looked like they were in charge. Now, they have their elections. And the Muslim Brotherhood and the Safalists have won an overwhelming majority.
JB: And they’re about to form a government.
MS: Right, so Egypt, like Tunisia, a notorious oil producer, up there with Belgium…
MS: Egypt is…so the Muslim Brotherhood coming to power in that legendary…and seizing the Cairo oil fields (laughing)…oh, this gets better.
HH: Mark, you know, now you have a glimpse of what it’s like to be a staffer in a Joe Biden meeting. And why he came up with the partition of Iraq at the same time that he was urging our troops to be stuck in the snows of Kilimanjaro.
MS: Well you know, Joe Biden said the other day, he said he spends four to five hours a day with President Obama. And he’s always the last person in the room. And that’s, you begin to understand why now if this schoolroom answer is…everybody else has fled, including Obama.
MS: Biden may spend five hours in the Oval Office. No wonder Obama’s on the golf course.
HH: It’s Lent, so Mark Steyn has to stay one more segment. We’re going to get through at least three minutes of this Biden answer before we’re done, even though it’s eleven minutes long.
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HH: Mark, during the break, I got this email from a very extraordinarily competent lawyer. He said always one of the week’s highlights. The Vice President never ceases to astonish. It’s just breathtaking that he’s a heartbeat away. Amazing. So I want to go back to Joe Biden with Mark Steyn, to what the Vice President said. We haven’t even gotten to the end of his first sentence.
JB: The world markets, they don’t think about that. They just hedge against the bets. It’s like, it’s a little bit like saying okay, you know, the forecast is 30% chance of rain. Well, some of you would bring an umbrella. Most of you would say eh, 70% no way.
JB: Guess what? The markets, 30% it’s going to rain, I’d better take, I’d better go buy an umbrella.
MS: It’s raining Joe. Hallelujah.
HH: Do you realize it makes…
MS: Right, so chance of precipitation 30% drives umbrella sales?
HH: That is it.
MS: And where, is this in Egypt? Are the Muslim Brotherhood carrying the umbrellas now? And is that what he’s moving toward? Because when last we left this sentence…
MS: no one knew where the Muslim Brotherhood in Egypt, that famous oil producing Tahrir Square oil fields, no one knew where that was going to go. He’s saying it could lead to a 30% chance of precipitation, which is good for Egyptian umbrella sales, but not for the price of oil. Is that right?
HH: You just said, I love that line, when last we left this sentence. It occurs to me this is the equivalent of a verbal car chase. We are following him from the sky, trying to catch where he’s going. Here’s some more.
JB: It’s kind of what they do. That drives the price of oil up, not manipulating. It’s not these guys, there are manipulators, there’s not these guys out there saying we’re going to make a lot of money now, and we’re going to do this. It has to do with the world market. Now we knew that when we came to office. That’s why since we’ve been in office, let me give you a few numbers. There are more oil and gas rigs working in the United States of America right now today than all the rest of the world combined. Let me say that to you again. More oil and gas rigs in America than all the rest of the world combined. When you hear about we should drill more, we are environmentally drilling everywhere that we can. We are producing…
JB: …almost 700,000 barrels of oil more. It’s seven, right? 700,000? Is that correct?
JB: 650,000 more barrels of oil per day.
HH: He caused production to plummet 10% in one sentence, Mark.
MS: Exactly (laughing) 37 Texas oil barons just threw in the towel halfway through the sentence.
HH: Did you hear at the start of that, he said there are manipulators, but there aren’t manipulators, because he’s…
MS: Yeah, no, no, this isn’t manipulating. It’s not like there are manipulators, but these guys aren’t manipulating the Arab Spring and the heavy rainfall in Cairo and the Iranian nuclear program. They’re just hedging their bets. They’re basically betting on disaster, and you know what he hasn’t mentioned so far, is he going to get to this before the last 7 minutes of the sentence, the decline in the dollar over the last ten years, you know? Is he going to mention that?
HH: Oh, no. We’re still on the public drilling. Back to Biden.
JB: …didn’t realize we have to do. It’s not just enough to produce more energy. We have to be more energy efficient. So the President has doubled, with the support of the Congress, well, not all the Congress, but the President has doubled the mileage requirement for American automobiles to 54 miles a gallon by the end of this decade.
JB: That will save people at the gas pump $1.7 trillion dollars.
MS: (laughing) Right.
JB: That’s hundreds of billions, tens of billions of barrels of oil…
MS: (laughing) So by the end of this decade, it will save the equivalent of one year’s federal budget deficit?
HH: (laughing) But I want to know what it’s…how come I just filled up my car and it cost me $95 dollars if it’s saving me this much money, Mark.
MS: Yeah, but he (laughing), the President is making major green jobs investments in companies that produce exciting, environmentally-friendly window treatments. So there is that ultimately, over the next ten to fifteen years, will bring the price of oil down from the $700 dollars a barrel it reaches when the Iranians nuke the Saudi oil fields, and the Muslim Brotherhood shut down the Tahrir Square oil fields, and the heavy downfall in Libya washes the Libyan oil away, the environmental investments in Solyndra will pay off long term by the middle of next decade.
HH: Quick spring to Biden.
JB: …will not consume, because that’s the biggest driver of energy costs. The third thing the President has said, and this is where we have a big debate with the other team on that, they didn’t think we should double mileage. They didn’t think we should insist cars get more mileage. We’re of the view that we have the technology to maintain performance and significantly increase mileage. And it’s in the national interest to do so. The second or fourth thing we did was…
HH: Fourth thing…
JB: The President came along and he said look…
JB: We have to do all of the above.
JB: We have to take advantage of all the oil we have in the United States and off our shore…
MS: (laughing) Right.
JB: …that we can soundly get. We have a hundred years of natural gas, shale oil below the surface of the United…
MS: I think Biden’s got a hundred years of natural gas just in this sentence.
MS: (laughing) Unfortunately…and amazingly, it appears to be sustainable and endlessly renewable. The President is in favor of all of the above. So basically, he’s just warming up here now.
HH: Oh, Mark, we can’t, we’re only five minutes through it, and we’re out of time here. I mean, we’ve barely…it’s one sentence for eleven minutes.
MS: And you know the tragedy here? This is delusion, the idea that he’s going to double the gas mileage so you’ll be able to drive as far on $4 dollar gas as you used to be able to do on $2 dollar gas. I mean, this is cloud cuckoo land stuff. The price of oil has been impacted by all kinds of things, as I said, including the Federal Reserve’s policy, and all kinds of other stuff. And he’s just like floundering on. I love the way he basically flounders around. I think, by the way, you know what he didn’t get to? I thought the Royal Wedding in London…
MS: I thought the Royal Wedding in London drove up oil prices, because by paradoxically creating an excess of certainty, it may have contributed to speculators speculating about future uncertainty in what they like to call, and here’s where I make the Dr. Evil-Joe Biden air quotes, a futures market.
HH: (laughing) Mark, I appreciate you going two segments. We’ve barely scratched the surface. I think your homework is to have to go find the audio file and listen to the whole thing, because I assure you, we have only scratched the surface. Have a wonderful Easter, Mark Steyn, Columnist To the World, www.steynonline.com.
MS: Happy Easter to you, too, Hugh.
HH: Oh, Joe Biden, the gift that keeps giving. Please, God, let him be on the ticket.
End of interview.