WaPo: Targeting speculators won’t lower gas prices
Yesterday, I noted that President Barack Obama’s latest proposal to target so-called “oil speculators” with regulations and increased fines is yet just another way for him to cast blame instead of working towards policies that would increase supply, which is what most analysts say is causing uncertainity and thereby higher gas prices. It’s another gimmick, for sure, but the rhetoric may be effective since most voters don’t understand the basic economics of how the market works.
But the Washington Post is criticizing Obama’s “crackdown,” noting that his latest gimmick will do absolutely nothing to lower gas prices, leaving Americans with more empty promises and more failed leadership:
The White House insisted Tuesday that high volume and volatility in oil markets suggest that regulators need more tools to monitor and control them. But a senior administration official deflected questions about whether regulators have detected any hint of manipulation and would not give an example of the sort of rigging the president suspected regulators might find with more resources. The official instead repeatedly pointed to Enron — a scandal involving electricity, not oil, markets. So the argument boils down to: “Maybe the CFTC will find something, we don’t really know what.”
No one should imagine that this will help much at the pump, no matter how much the White House talks of the urgent imperative to protect vulnerable consumers. America, after all, has been down the blame-price-manipulators road before. In 2006, President Bush ordered an investigation into gas-price gouging that had trouble finding even credible complaints of price manipulation. In 2008, the CFTC found that speculation wasn’t systematically driving gas-price increases.
Recent history shows that gas prices over time depend on a range of factors, predominantly supply and demand fundamentals, that the U.S. government can’t easily control. And even if bona fide Wall Street manipulation were a primary force moving prices, The Post’s Brad Plumer points out, the United States alone can’t police the world market. As the president has said, the real answer is not to give voters hope in false solutions — which Mr. Obama’s rhetoric Tuesday can’t help but do — but to slowly but surely get America off oil.
Higher gas prices has always been the goal of this administration, Obama has said himself that he didn’t have a problem with the cost of gas, rather that it rose too quickly. Energy Secretary Steven Chu said in 2008 that “we have to figure out how to boost the price of gasoline to the levels in Europe.” The idea that this administration really wants to help Americans by enacting policies that encourage drilling in the United States is ludicris. They’ve done almost everything they can to prevent that
So while you’re paying more at the pump, expect more gimmicks from President Obama, who continues to blame everyone but himself for gas prices…and pretty much everything else that has gone wrong in the last few years.