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Fungible Palin?

Let’s see ….. the reaction to Ms. Palin’s comments about the fungibility of oil has me curious. First, the quote:

“Of course, it’s a fungible commodity and they don’t flag, you know, the molecules, where it’s going and where it’s not. But in the sense of the Congress today, they know that there are very, very hungry domestic markets that need that oil first. So, I believe that what Congress is going to do, also, is not to allow the export bans to such a degree that it’s Americans who get stuck holding the bag without the energy source that is produced here, pumped here. It’s got to flow into our domestic markets first.”

From the dictionary, the definition of the word fungible:

“Able to replace or be replaced by another identical item; mutually interchangeable.”

Thus, if a tanker load of Alaskan oil is sold in Japan and another tanker load of Venezuelan oil is purchased in Texas, don’t those two transactions offset each other? Isn’t this fungibility in action?

It appears to me that Gov. Palin has a very limited understanding of economics. If it were more profitable for the Alaskan oil companies to send that shipment of oil to refineries on the West Coast of the United States instead of Japan, they would have done so, wouldn’t they?

I just have a very hard time understanding how a businessman would be able to support Gov. Palin. I thought Republican businessmen believed in the power of the free market. Is Gov. Palin saying that politicians know more about markets than businessmen? I’m puzzled.

Is it possible that we could exchange Gov. Palin for someone else? Say, a qualified female Vice Presidential candidate? How about Condoleeza Rice? As much as I disagree with her political beliefs, at least Ms. Rice has the educational credentials to be a Vice President. Oil is not the only fungible commodity.

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