Are All TV Commercials Aimed at Ignorance?

Pretty much everyone knows–or should know–that many, and maybe most, of the points made by most politicians are of little value, amounting to little more than equine feces at best. A commercial I saw the other day illustrated that the same is true of TV commercials. (Yes, I realize that’s no discovery. But still…) The advertisement I saw featured a clean-cut young man making a pitch to “buy American-made gasoline at Kwik Fill” because doing so “strengthens our economy.” Do people believe that type of thing? The short answer is:  Yes. How do I know? Because presidents–and presidential candidates–have been saying pretty much the same thing for close to 4 decades, beginning with Nixon and continuing right up through Obama.

Rachel Maddow–not exactly a standard-bearer for libertarian ideals and the power of the free market–demolished this lunacy on her show, and the episode is immortalized on YouTube, under the appropriate title, “Oil Is Oil Is Oil.” There is no such thing as “foreign” oil and there is no such thing as “domestic” oil. There is no way to purchase oil from domestic sources or that “benefits Americans only.” Maddow covers many valid points in the video–which is recommended viewing–but in economics-speak, oil is fungible. As such, the concept of energy independence by lessening the U.S. dependence on foreign oil is just the same old jingoistic bird cage liner scrapings. All oil is sold on an international market and all oil is purchased from that same place. Which service station you use is largely irrelevant.

Admittedly, Maddow makes a couple points with which I disagree, most notably in her suggestion that we can affect positive change by lessening our overall dependence on oil. To that suggestion, my response would be “Why?” To what purpose should we–users of energy–attempt to cut back on our usage of energy? To what purpose should we–people who benefit from all manner of conveniences due directly to the technology of fossil fuels–attempt to change our ways? I can only assume that Maddow believes, like many liberals, and many conservatives, that the consumer should react to policy concerns versus market signals. If oil is the cheapest alternative, then the consumer should continue to buy it, period. If, and when, oil becomes so rare as to not be the cheapest alternative (and/or the best technological alternative) the costs should reflect it, and we consumers will move on to something else. (The costs will reflect it, unless the government gets in the way.) The problem is not over-dependence on oil. The problem is lack of understanding of basic economics, the market, and the ramifications of supply and demand.

Of more concern to me, and maybe more importance, is this:  If this type of obviously-flawed economics thinking, as evidenced by that commercial, has pervaded presidential talking points for forty years and continues to pervade TV advertising even now, how much more horribly flawed information flows unabated?

Bottom Line:  I guess they don’t call it the idiot box for nothing.

Cross-posted at the LRCBlog.

1 comment… add one

  • Good points. My one disagreement is that I think that the “energy independence” mindset arises from legitimate concerns about the role of oil in our economy. Basically, I think that a lot of people are making major economic misjudgements in how they use energy, and these misjudgements regularly produce negative social and political consequences for the rest of us.
    I’ll try to break it down…
    1) The price of oil is volatile. This is in large part due to political instability in the oil-producing parts of the world (which may itself arise from the high export value of oil, but that’s a different argument). There is also a legitimate concern about “peak oil” — that the depletion of easily accessible oil deposits will result in a rapid increase of oil prices (and this whole process is exacerbated by rapid global consumption of oil).
    2) Demand for oil is inelastic, and it accounts for a substantial portion of our expenses. For instance, the USA’s trade deficit for oil is about 1% of GDP (http://www.calculatedriskblog.com/2005/04/oil-imports-as-of-gdp.html). Consequently, when oil prices jump, many households have a hard time cutting back oil consumption (which often requires major capital investments or lifestyle changes), and end up with substantially increased expenses.
    3) When the price of oil jumps (as people like Maddow expect it to), these increased expenses incurred by other households will have ripple effects throughout our economy and society. Households have trouble making ends meet, which means: they are not credit-worthy and we have fewer people to do business with (alternatively, the increased expense of oil diminishes demand for the services –and assets such as houses — that we provide domestically); they have fewer resources to contribute to community goods (e.g. keeping their house/yard looking good, paying taxes, donating to charity); they may sink into poverty, with all the associated ills (e.g. family breakdown, increased crime); finally, they will be more likely to vote against incumbent politicians, providing politicians with an incentive to implement politics (both domestic and foriegn) that will keep the price of oil from increasing.
    It’s easy to say that consumers will “move on” if the price of oil goes up too much — but that process will take a few years, during which time the consumers are facing major stresses. It’s easy to say that politicians should just let prices jump, but any realistic understanding of politics tells us that they will do anything they can to postpone any “adjustment” to the economy –because adjustment is difficult, and voters will take it out on the politicians, and they typically won’t realize why they are doing it.
    So Maddow’s rants against “oil dependence” and exhortations to reduce consumption are completely rational and sincere. She is trying to focus her audience’s attention on a risk that they face (oil price jumps) and directing them towards a path of action that will minimize the cost that they would incur (and then pass on to the rest of us) should we encounter that problem.

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