Why Oil Prices Rise Globally

SPEAKER_01 0:07

Welcome to the Intersection of Faith and Culture. It's the Wild Boulder Show. Thanks for joining us today here at the Intersection of Faith and Culture and the place where we answer questions with a biblical, historical, and constitutional perspective. And thank you to all of you that send in questions for our Foundations of Freedom Thursday program. We're going to answer some of those questions today, actually, even though it's not Thursday yet. But you'll have to tune in again on Thursday for additional questions. Please send those to radio at wildbuilders.com, radiowallbuilders.com, and then check out that website at wildbuilders.com. Lots of great materials and resources for you there. And then wallbuilders.show if you need to catch up on any of the radio programs you might have missed over the last few weeks. Rick Green here with David Barton and Tim Barton. Bob McEwan joining us a little later. We got some great questions. We're going to be asking him. It's kind of our phone a friend, right, guys? Like when we get to one on economics, we say, Regis, can we phone a friend? And I know that's an old show now. That used to be like the hip show, Who Wants to be a Millionaire? Y'all remember that one? I do. It's been a hot minute. Yeah, guys. So when we when it's time to phone a friend on an economic question, we all three have the same speed dial in our phones, and it's Bob McEwen. So when we get a tough question, Bob, Bob McEwen joining us. Hey, thanks for joining us and helping us answer some good questions today, man. Honored to be with you. Well, we got we got a lot we'd love to throw your way, but the the best one, I think, and and most timely, um, there's a lot of questions out of this youthful generation about socialism and whether capitalism is better and what produces better results and all those things. And now with oil prices going up, uh, people are asking those questions even more. So I'm just going to read this question aloud and then we'll just bat it around. And Bob, we appreciate you joining us to be a part of it. This one comes from Joe. She said, if America has so much oil that we are selling it to other countries, why do Americans have to endure even a temporary increase in gas prices? Isn't that in essence price gouging? I have no problem with billionaires making money, but if they are simply getting all they can off the backs of hard-working Americans using the excuse of the Iranian war, that seems to play into the leftist accusations against capitalism and thus undermines the MAGA and biblical admonishments on how a national economy works best. I understand that through capitalism, uh, that though capitalism does not eliminate greed, it does help reduce it through supply and demand. But in this case, should someone on the right call out the greed of the American oil companies, would that help show the other side that we on the right are against unnecessary gas price hikes too? Would this be a step toward real dialogue with the reasonable Democrats? She put that in quotes, by the way, guys, because I'm not sure any of those exist anymore, um, that we are fighting for the everyday American worker as well. All right, guys, a lot, lot, lot packed in there, right? I mean, just the basic understanding of why gas prices go up and uh regardless of our level of supply here, it's a world economy. I guess maybe start there, Bob. Like, why would gas prices be going up if we're energy independent and we don't run our oil through the streets?

SPEAKER_00 2:44

Well, very simply, you have to understand what causes a price. The price is what a willing buyer is wet is willing to pay to a willing seller. And it doesn't have to do with an oil company or you and me or somebody else. It has to do with the marketplace deciding. So if the whole world wants corn and uh and and there's a wipe out of corn in in Ukraine, which is a major supplier of corn, that means there's a shortage. That means the price of corn would go up. You say, Why why would the price go up? Because the entire world wants more corn. You say, Yes, but we have plenty of corn in Iowa. Why would our price go up? Because the the number of people who wishes wish to purchase the corn is greater than the supply, which drives up the price. Why does that happen? Because then that is a signal that you need to produce more corn if you make more money than you produce more corn. That's how prices work. Now let's take corn away and use oil. And that is that the world needs oil. And if there's a shutoff of 20% of the source of oil for a while, that means that the world is grasping for it and it drives up the price. Well, but yes, but in Texas, I already have that doesn't have anything to do with it. It has to do with the value of the price, which is the cross between a willing buyer and a willing seller.

SPEAKER_01 3:57

This is why Bob McEwen is the phone of friend on all economic questions. Who would have thought to use corn as the analogy here and Iowa having all the corn they that's perfect, Bob. That's exactly the right way to think about it.

SPEAKER_02 4:08

David, Tim? What I'm hearing is it doesn't matter that it's produced locally, it's sold all over the world. And so our price, the demand is so high across the world that what's produced in America brings in a lot more money or the price is higher because the demand's high. So I guess it's really uh I was thinking in terms of we use our oil here, but it really is our oil's being exported across the world, and that's why the price goes up essentially. Is that right?

SPEAKER_00 4:31

And the important thing is that it's the purchaser that sets the price. It's not the oil company or it's not the farmer, it's the person who wants to buy it. And if the if if the person driving down the road and he sees corn at$4 an year, he's gonna say, I just keep going. And so then they have to put out$3 an ear until finally they get people willing to stop and buy it. And the price was set not by the seller, it was set by the buyer, by the purchaser. Now, let's suppose you have a load of it and and 50 people show up and they all want the corn, and one of them says, Well, I'll pay 50 cents a year, I'll pay a dollar in a year, I'll pay a dollar and a quarter in a year, and the purchaser sets the price because he is the willing purchaser. So the idea of attacking the oil company for this price, if it was up to them, they set the price at$500 a barrel. But they they can't set the price. They look at every day to see what the price is because that's what the world market is saying, I'm willing to pay for.

Price Caps And Socialist Shortages

SPEAKER_03 5:28

But Bob, wouldn't it just be easier if the government stepped in and just put a price cap on it and said, Look, we're not gonna let you sell, you shouldn't have to pay more than three dollars per gallon of gas. So what can couldn't the government just step in and solve this problem, Bob? That's I mean, Mandami up in New York City. This is like this was his idea. Let the government solve the economic problem.

SPEAKER_00 5:54

Bob, why wouldn't we just get the government to solve this problem? Tim, that's exactly the question. It's only been through time immemorial. That is what socialism people who run for office. If you will vote for me, I will then set the price. So you take uh Venezuela, third richest nation in the Western Hemisphere, same population as Canada, a very, very wealthy nation. And it and that's when bad things happen, when things are really going well. That's when somebody comes along and says, How about how about if I lower the price? I'll just set a price that you can get it for free. We don't want those dirty oil companies making those money. We'll take it. And so they do take it. But in order for the oil to be produced, for it to be mined, for it to be pumped, for it to be refined, for it to be shipped, there has to be reach a certain value. And it's not, it doesn't before they can make a profit. And the profit is usually in the neighborhood of three to four to seven percent, somewhere in there. If it's on food, by the way, not as an aside. If it's at a grocery store, it's less than two percent. In manufacturing, it's four to seven percent. So if they're gonna make a four to seven percent profit and and uh uh the dictator comes along and says, I'm gonna cut it in half. We're gonna make it so that it only costs half as much. What does that mean? That means that they sell it for less than it costs to produce it, and what is the consequence of that? The nation such as Cuba that was a major exporter of sugar to the entire world, ran out of sugar immediately, ran out of chicken immediately. The the the shelves are empty immediately. That's what socialism does, because what government can't set the price, only the purchaser, only the willing buyer can set the price. And when a politician steps in there, rest assured it's going to foul it up big time. It only works that way every time.

Price Gouging Claims Tested

SPEAKER_01 7:38

Yeah, and and and Bob, hit this thing about price gouging. I I've always wondered what it how how do you gouge if nobody's willing to buy it or you know you're not willing to sell it? I mean, even if if if the prices are going way up, it must be because people really need that thing and there's only so much of it. So so where did this come from, this whole idea of you're gouging because the market needs your product bad enough and it costs you that much to put it out there and still make a profit.

SPEAKER_00 8:05

Well, Rick, let me just throw in an aside here, and that is if you grew up on a farm, you don't have a problem with this question. You understand what it takes to purchase the grain, to put in the fertilizer, and and wait for the production of the cost, and you know how much it costs for each grain of corn, each brash of corn, how much it costs to raise a hog and all that. And Thomas Jefferson was very, very concerned when all the farmers move to the city and they don't know how this thing happens, then they'll make these crazy statements. So let's take the one that you just said about gouging, and let's not use oil, let's use shoes. Let us suppose that you're in the shoe business and you sell, you buy shoes at$90 a piece and you sell them for$100. So you make$10 on those shoes. And suddenly you get an order because of inflation, and we can explain where that comes at another time. But when inflation comes along and the price jumps not to$90, they tell you from now on your shoes are going to cost$120. Now, what do you have to do? You say, well, you only paid$90 for those shoes on the shelf. Uh why would you up the price? You're going to make a profit at$10 if you sell them at$100. No, no, no, no, no. You have to increase the price of every one of those pairs of shoes to$130. Why? Because every time you sell one, you're going to need$120 of those dollars to go back and replace it on the shelf. And if you don't make it on the shelf, then you'll be out of business. So let me just say it again. You were you were buying it at$90, selling at$100. When the price jumps to$120, you have to sell it at$130 immediately. Now, in this interim period, Rick, anybody can come along and say, look at that. He bought those shoes at$90 and he's selling them for$130. That means he's making a 40% profit while he's price gouging. No, he's not price gouging at all. If he doesn't sell it at that new price, he'll be out of business. Now, let's not talk about shoes. Let's talk about oil. And so if you're buying oil at sixty dollars a barrel and it jumps to a hundred dollars a barrel, that means that you have to process and sell it at enough to replace each one of those barrels at a hundred dollars a barrel. And during that interim period, and you're a leftist, and I can show you in the 1970s, I have where where the members of Congress, and such as people that you and I would respect theoretically, and they're screaming at the oil companies, they're going, you're making you you're you're making these 30 and 40 percent profits. They're not making thirty or forty percent. The price of oil has gone up so high that they had to get that in order to survive. But if you don't if you've never grown up on a farm, if you've never raised a hog in 4H, you don't know how this works, you're subject to that kind of uh demagoguery as we've just described.

SPEAKER_02 10:39

Bob, I've got a question for you. This uh this is something I've never fully figured out. So since we're getting our PhD in economics today, listening to you, tell me how futures plays into this. Because futures they're they what is futures? They're they're selling on speculation. Does that affect prices? What happens with oil futures or corn futures or anything else?

SPEAKER_00 11:00

Well, this is a futures are a person that comes along and he says, I think that the price of of oil is going to be a hundred and thirty dollars a barrel. And so therefore, I'm going to to to offer to purchase it at 120 because I think it's going to go higher than that. And so I'll sign a contract, a future contract, that I will buy it in three months at$120 a bar a barrel if someone will sell it to me. And and so people watch that market because these are experts as what are they what are they speculating? Are they speculating it's going to go up? Are they speculating that it's going to go down? And it gets back, David, to to the people, the pe people that are in business. We we have to love those people. The nations that honor those people prosper. Those that that ridicule them and abuse them and and carry little signs around like they do in in Seattle and Portland saying tax the billionaires. You saw where the mayor of Seattle the other day. Here they are, they're driving out Boeing. Now, can you imagine that the finest company aircraft in the world? And and they're they're bragging about how she's driving out Boeing and then driving out Starbucks founded there in Seattle. And she goes, bye-bye. She doesn't have no comprehension of what happens when those businesses get up and leave. Now, the people that are in business that try to eke out those three to five percent profits that have to make these these gambles, these risks with their own money, they go in the futures market and they say, in order to stabilize this thing, I'm gonna take this risk. Now, not if not very many people do that, but nevertheless, one of the ways that you can take an uh an analysis of what do you think is going to happen, you look at the smartest people in a particular business, whether it be in corn or oil or gas or what and say, what are they speculating? What are the future markets? What are they willing to pay at that rate? And what it does, David, is that it smooths out the bumps because they're already committed and they can do their balance sheet. This is what we're going to get it at. Now, of course, if the price goes down and they pledge to pay higher, then uh they they they pay a price, and that gets me back to where I began. Those that are willing to be engaged in business, we love them because they are the ones that make it all work. Without them, you end up like the rest of the world. Four percent of the population of the world call themselves Americans. And every year they produce a third of all the goods and services on the planet. Why? Because we're smarter than anybody else? Nope. Because we're freer than anybody else. And when these people step into Chicago and step into New York and step into these crazy governors, mayors, they destroy I I just saw where Dell Corporation, a three trillion dollar corporation, is leaving Delaware today and going to go to Texas when these stupid, idiotic, leftist liberal governors and mayors, they they destroy jobs, and of course when they do it around the world we benefit because the richest man in the world is an American, but he happened to be born in Africa. The man that is headed one of the largest corporations in the world at Google is an American, but he was he was born in India. America is great because it's free. And when these socialist idiots that create poverty in Cuba, in Venezuela, and elsewhere, when we elect them to office, and 83% of immigrants in New York voted for this new mayor who's from Africa. When these people come to our country and don't understand what made America different and try to make America like their country, it does damage to us all.

Federalism And Business Friendly States

SPEAKER_01 14:22

Yeah, we basically import horrible policies. Bob, what would you say? I I love Ben Shapiro's new book, Lions and Scavengers. I mean, that's really what you're talking about is the scavengers essentially just berating the lions until they say, forget it, I'm done. I'm either moving somewhere else or I'm not going to build that thing anymore because you've made it so not only expensive to do it, but the headaches that that you create and you you make the rewards so far, you know, so so much less appealing because of all of the pain that it requires to get there. What do you think they're, I mean, what what what hope line can you throw to the entrepreneurs out there and the people that want to still be in a free economy and have these things? Do they just do they need to move to a state that's more free? Do they need to just keep fighting for, you know, better regulation andor less regulation and better policies? And then I mean, Trump is obviously trying to turn this thing around, but people do get frustrated. What do you say to them about staying the course and staying in the fight?

SPEAKER_00 15:14

Well, that is the genius of our founders in creating the federal system so that when you elect uh uh you take a state like California, there's there's just nothing that you can say about that state that isn't ideal. It's wonderful. It has timber, it has gold, it has mountains, it has everything one would want. And you would think, how can anybody screw this up? Well, rest assured, they can. And so they begin to reward people for not working and they penalize people for having jobs. And they had 60 refineries that empowered the entire world. Now they're down to six oil refineries, and four of those are closing, and and major, major f firms uh such as Ballery, such as Tesla, uh they drive it out of their state. So fortunately, we have this federal system of where not everybody is stupid at the same time. And so you have places like Texas and like Tennessee and like Florida where people move in order to show prosperity. The four largest uh states in the Union are New York, California, Texas, and Florida. And of those four, two of them are red and prospering and growing and happy, and two of them are blue and collapsing and and and criminal and and diminishing. So once you understand the principle, you can do it, but it's our responsibility to educate our children and each other to make sure that we don't do the DeSantis is the governor of Florida that has just made that state a rocket ship, and now it's the third largest state in the Union, but he only won by 30,000 votes. Had he won had had had 15,000 people shifted otherwise, the crazy man that was running against him, the former mayor of Tallahassee, eventually was found with with a dead boyfriend in the in the hotel in in Miami, if that man had been the governor instead of DeSantis, and he made all the regulations that you had to have toilet paper strapped to your face in order to walk down the street and all the things that that went along with that like they had out in California, then Florida would have been just like California and Oregon. Beautiful Portland, beautiful Seattle, are now two of the five uh uh most dangerous cities in the United States. The leftists can destroy anything. But fortunately, periodically we elect good people like we see in in our red states, and uh we can make the difference.

Patriot Academy Leadership Message

Government’s Proper Role In Markets

SPEAKER_01 17:28

All right, guys, we're gonna take a quick break. Our special guest today, Congressman Bob McEwan, with us. Stay with us. You're listening to The Wobbler Show. Have you noticed the vacuum of leadership in America? We're looking around for leaders of principle to step up, and too often, no one is there. God is raising up a generation of young leaders with a passion for impacting the world around them. They're crying out for the mentorship and leadership training they need. Patriot Academy was created to meet that need. Patriot Academy graduates now serve in state capitals around America, in the halls of Congress, in business, in the film industry, in the pulpit, in every area of the culture. They're leading effectively and impacting the world around them. Patriot Academy is now expanding across the nation, and now's your chance to experience this life-changing week that trains champions to change the world. Visit Patriotacademy.com for dates and locations. Our core program is still for young leaders 16 to 25 years old, but we also now have a Citizen Track for Adults. So visit the website today to learn more. Help us fill the void of leadership in America. Join us in training champions to change the world at patriotacademy.com. Welcome back to the Wallboulder Show. Thanks for staying with us. Thrilled to have former Congressman Bob McEwen from Ohio with us and uh just basically getting a full-blown economics lesson today. By the way, you can learn more from Bob, politics is easy as pie, uh, available at Wallboulders. And also go through our biblical citizenship class where Bob and Charlie Kirk and others sit around and talk about a lot of these questions we're talking about now.

SPEAKER_03 19:02

And you know, guys, one of the questions we we've actually had a couple listeners write in about this, and Bob is the perfect guy to answer this because all of us have opinions and largely founded on constitutional principles. But Bob, let me throw this to you. So that there are questions where people are curious, what is the proper role of government? Because on some on some issues, you see that the government has has upheld some regulations that have made it seems like some industries more safe. But then where's the balance of if the government gets involved and starts doing regulations? Do we want government to do any regulations or are all the regulations? Where is the balance that the government can offer safety to individuals without micromanaging the companies? What should we think about or how should we view the proper role of government when it comes to business and economics?

SPEAKER_00 19:53

Well, Tim, that's an excellent, excellent question because that is it goes to the heart of what politics is. And that that is that basically we believe that government is, as uh Abraham Lincoln said, government should do only those things which a man cannot do better for himself. And uh and and in government is essential for freedom. If if uh if we didn't have government, you and I couldn't be sitting here doing this, we'd have to be home protecting our property. That's there are third world countries where that's where they function. They have to have people to protect their property in Congo and elsewhere. It's not because of natural resources or good climate. Congo has that, but it doesn't have a spiritual value system of right and wrong, therefore it's it has abject poverty. And so what people can can join together and doing things that uh the individual cannot do, and that's where the where the margin comes. And and we c it it's the desire of people that are not successful in business to get power by getting elected to office. And then they can tell people what to do. And and the purpose of government in America is to be the servant. Uh uh I as a member of Congress, I never signed my name Congressman. My predecessor showed me in the Constitution, there's no reference to Congressman. It says representative to Congress. And I it's not my office or my district, it's their office and their district, and I am their representative. Now, if a person sees themselves in government is to represent the people, then they'll do what is collectively good for all of them. But if they think that they're the ones that can decide what when people can drive and when they can turn right on red, and they put signs everywhere just because they have the capacity to do it, that's where you lose their freedom. And it's the natural tendency of all people, Wendow Woodrow Wilson said this, the natural tendency of government to constantly expand and to grow. And so when when people are there and they see themselves as the Lord over others' folks, then then you can just listen to them. It doesn't take long, Tim. You listen to the their speeches and and this and that, you listen to AOC and and and Mondami and and all these folks, and they're telling what what you should do and what I'm gonna do. And they never talked about. the people representing their interests and and their site. So your question is at what degree there are things that we cannot do for ourselves, such as maintain a solid currency, and we can collect collectively band together to have a currency that's solid that that makes for commerce. If they want to drive make a a uh canal from the Lake Erie to New York and we can drill the Erie Canal that people can band together but in even in that case all you need is the authority because individuals invested to do it. And that's the difference between America and the rest of the world is that we we allow the the climate, the environment we don't tell you what kind of car to make or how to make it we just tell you the environment in which you can make it and from that all the great inventions of the world come from America.

SPEAKER_03 22:44

So Bob what would you then say that to clarify of of some of the regulations because some regulations it does seem that somebody had a good heart, well intention like to say, you know, we're not going to let you hire 12 year old children to come work your assembly line versus when you then have the government start micromanaging on things that are excessive and and hindering people that are trying to be creators, job creators and product creators, et cetera, where do you see the balance when it comes to regulations?

Morality, God, Life, And Liberty

SPEAKER_00 23:17

Well as I said I I don't have a perfect answer for that because that's a constant competition. And and and where you draw that line is whether you go through more government and what we learned is that when as you get to more government, the tendency to do that, you then create poverty because you limit the decisions of individuals. And when individuals in the marketplace are making them then they collectively make it for their best interest. The degree to which you you reduce those decision makers to finally you have a dictator and you just stop stop and think when somebody else is buying a dress for your wife, when somebody else is buying a jacket for you as you can't do it for yourself, they simply cannot do it as well as we can individually so that's the fight is that there are those who believe that government should make decisions for us and you and I believe the marketplace individually we should make those decisions.

SPEAKER_03 24:03

And Bob then I I think too maybe that to put a bow on this, it seems in everything you're saying with freedom, and and you say this in your teaching politics easy as pie, but it it echoes the sentiment of the founding fathers that without religion and morality freedom doesn't really work. And I think it's true in economics too that when we talk about we don't want the government to micromanage and make decisions for us. But when you remove a moral and ethical system it it creates a space and opportunity where people feel like the government needs to come solve this problem but a lot of the problems they might be trying to solve are a reflection of a lack of moral values being upheld in economics. Would you agree with that or do you see a difference?

SPEAKER_00 24:43

That's only 100% correct that's that's the truth. That's the absolute case. And uh I my wife has a has a Facebook friend who's a big leftist and I just saw yesterday that one of the things she had we hold these truths only these were crossed out and it says we hold our truths and that now there it is. That's the same as Adam and Eve in the garden. That's the fight our truths I'm God I shall ascend into the throne I shall be like the Most High. I see that it makes it makes one wise be like God knowing good and evil I should uh our our truth as opposed to our founders understood our truths will end up killing people. Man without God always ends up killing. And so that's why the Jefferson Memorial says God who gave us life gave us liberty at the same time. So you see the sequence that with without God there's no protection for life. And we've seen our opposite political party when when they took away God out of the platform and somebody on the floor said this is the first time we've done that we should make some reference to God and they booed and hissed and screamed and carried on for the last 30 some years. They've never made a reference to God and so we saw Kamala running for office with all the turmoil at the border and in Ukraine and elsewhere. And yet literally a third at least of every single speech I challenge you to find a single address that she gave in her presidential campaign and wish she didn't spend at least a third of it talking about the joy and the privilege of taking innocent life, focusing on taking innocent life. And without God there's no protection for life and then your liberty is severely severely at stake.

Final Thanks And Resources

SPEAKER_01 26:21

Well if if there's any question of whether or not I learned anything today let me close by saying representative Bob McEwan thank you for joining us. I I I all these years of having you on I never knew that now I'm now I'm going to call you representative not congressman from now on. Hey appreciate you so much brother thank you to everybody that was listening today. Be sure to visit our websites today wobblers.com and wobblers.