We are clearly very near our third generation of economic illiteracy in this country, shamelessly exploited by over the top demagoguery on energy policy. I have never seen such duplicity combined with cowardice and pandering, topping even the late 1970’s in foolishness. The reasons this is so are legion and I won’t recap them here, except to say that the elected officials who are making the most noise about oil company price “gouging” and “excess” profits are exactly the same people who have thwarted every major policy initiative over the past twenty years that would have enhanced U. S. sources of oil supply and improved the allocation and reduced the cost of existing refined product supplies. The biggest disappointment is that some of the old hands at this have now been joined by Republican leaders who, I can only assume, are afraid to boldly defend the principles of supply and demand in an election year, and to explain that government is not the solution, but rather the cause of much of the market distortion currently adding to the higher prices. So we’ll have our price gouging investigation and our hearings and our photo ops and the empty speeches masquerading as probing questions to cowering oil executives. To what end? The exact same end as all of this that went before—oil is a commodity the price of which is determined by the conditions of supply and demand in the world market, unless government intervenes in its myriad ways to screw it up.
