ThinkProgress and Lee Fang: wrong again

Earlier this week we noted that Center for American Progress Action Fund (an arm of the Center for American Progress, a think tank closely associated with President Barack Obama’s administration and left-wing financier George Soros) was launching an “ideologically driven news organization.” Its implementation would be through the ThinkProgress blog, which has been active for some time, including a role as a vocal — and often highly misinformed — critic of Charles and David Koch.

This bit of background is important because ThinkProgress has shown to be an unreliable source of information. Case in point: Yesterday John H. Hinderaker of Powerline examined a recent post on ThinkProgress that is critical of Koch Industries and found it and its author Lee Fang to be highly lacking in a number of areas, such as facts, knowledge, and understanding of economics. One comment left to the article included: “Based on 25 years of scholarly research and market experience, I can say that Fang the Farcical knows not the first thing about either manipulation or commodities pricing. You would think that Soros could have found a junior assistant trader to teach Fang the basics. But then there wouldn’t have been a story, would there?”

Here’s just a small example: One of the most telling parts of Fang’s article is this: “Big banks and companies like Koch employ a contango strategy by buying up oil and storing it in massive containers both on land and offshore to lock in the oil for sale later at a set price.”

Here Fang is criticizing Koch Industries for speculation in oil markets. Hinderaker notes that unlike banks — which aren’t in the oil business — Koch Industries is actually in the oil business: “Koch certainly does buy oil and store it; it is in the oil business. However, I would be curious to know what ‘big banks’ ‘buy[] up oil and stor[e] it in massive containers both on land and offshore.'”

Buying something when the price is low and storing it for later use seems a rather innocent act. I wonder if Fang has ever done like I have: When I notice the grocery store has Diet Pepsi on sale, I buy extra and store it for later use when I expect the price will be higher.

Contango Confusion

By John H. Hinderaker

The Think Progress web site is a Soros-funded mouthpiece for the Obama administration. Someone at Think Progress or its parent, the Center for American Progress, has instructed cub reporter Lee Fang to devote full time to attacking Charles and David Koch and their company, Koch Industries. (It would be interesting to know who gave that instruction, and why.) We have deconstructed several of Mr. Fang’s attacks, all of which have been juvenile. But his latest effort is perhaps his most pitiful yet.

In “The Contango Game,” Fang tries to show that Koch Industries “manipulates the oil market for profit.” Unfortunately, young Mr. Fang has neither the business experience nor the intelligence to understand the issues about which he writes. The result is that nearly every sentence is a howler. Among other things, while a contango market is the main subject of Fang’s post, he doesn’t know what the phrase means.

Fang begins with the claim that oil prices are high these days because of speculation. Whether it is even possible for “speculators” — some call them investors — to have a material impact on the price of oil over time is dubious. While partisans like to blame speculators for rising oil prices–never, however, for falling prices–objective studies, like this one by the Commodity Futures Trading Commission in 2008, have failed to document any such influence.

Continue reading at Powerline.

4 thoughts on “ThinkProgress and Lee Fang: wrong again”

  1. Um… the cftc are the worst kind of shills for wall street and you rely on them for refutation of anything? It’s a fact that current spot oil prices are set base upon the futures price and the futures price is heavily manipulated by wall street and scum like the kochs. This same pattern can be seen in many of the commodities futures markets where parties with no actual industry connection (unlike the kochs) pour huge amounts of money into these futures driving up the price of everything from wheat to black gold. In this regard we can see the current “quantitative easing” strategy of the Fed having one of it’s (un?)intended consequences. People are starving due to this “free” market behavior. It’s a wonderful world.

  2. I love what Sen. H.L. Richardson wrote in his book, Confrontational Politics: “Those who have situational ethics will easily lie if it benefits their interest and they believe they can get away with it. Remember, dogs bark, jackasses bray, snakes wiggle, and liberals lie; it’s their nature to do so. Exposing a liar is confrontational. They first deny, then change the subject, then ATTACK THE ACCUSER’S CHARACTER. The more vigorously we pursue the truth, the louder they scream.”
    Think about this statment and you will know its the truth.
    I’m sure the Kochs know this and understand that this is what happens when honest people try to work to make this a better county. Mike Howerter

  3. The post above from “LuckyDucky” demonstrates that ignorance is not limited to Mr. Fang but hatred of anyone producing energy is all too common in America. If “speculators,” and I’ll leave the definition of who is a “speculator” aside for the moment, can control prices, why aren’t they higher.

    Frankly, OPEC’s manipulation of petroleum markets is much more of a factor than anything occurring in this country to raise prices. In fact, energy producers are doing everything in their power to find more energy and get it to market with the current price structure. Koch Industries is an energy producer as well as user.

    Look at both oil and natural gas markets. Since natural gas does not travel as well as oil does, that market is more local. Restrictions on gas drilling, along with new technology (fracking) are finding lots of natural gas. If markets would be allowed to work, you would see a shift towards methane (CH4) and away from oil. Natural gas generates BTU’s at about 1/3 of the cost of oil. Instead the government subsidizes ethanol, windmills, and solar. None of these are more than niche energy producers.

    However, govt. restrictions on drilling and production are now determining how producers operate here. Overseas, the treatment of producers is not as restricted.

    Bob is too generous in allowing verbal bilge like “LuckyDucky’s” post to demonstrate his energy ignorance and infest this site.

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