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The Gas-Price Blame Game — Round 36
Energy: Pump prices keep climbing, so what do those mainly responsible for the run-up do? Try to pin it on someone else, of course.
In his radio address last Saturday, President Obama bragged that his attorney general had just two days earlier "launched a task force with just one job: rooting out cases of fraud or manipulation in the oil markets that might affect gas prices, including any illegal activity by traders and speculators.
"We're going to make sure that no one is taking advantage of the American people for their own short-term gain."
Last month, the president promised that his administration was "taking various measures to deal with oil prices, and (is) watching out for price-gouging."
This is the sort of rhetoric that beleaguered consumers, aching from soaring fuel prices, are vulnerable to. Obama is giving them a straw man on which they can vent their frustrations. But their focus should be on the presidential candidate who said while campaigning in 2008 that under his environmentalist regime, "electricity rates would necessarily skyrocket."
On the day Obama took office, gasoline was $1.83 a gallon. On Tuesday, according to the American Automobile Association's Daily Fuel Gauge Report, the national average was $3.87. While electricity prices haven't yet necessarily skyrocketed, gasoline prices sure have.
Obama could have prevented this. But he's done nothing to push crude supplies up and thereby bring gasoline prices down. In fact, it appears that his goal is to reduce domestic supply. Among the energy roadblocks his administration has thrown up:
• An illegal moratorium on drilling in the Gulf of Mexico.
• The rescission of permits that had already been issued for drilling in the Chukchi Sea off Alaska.
• The withholding of air permits for drilling, prompting Shell to walk away from an estimated 27 billion barrels of Arctic oil.
No, the oil in those reserves would not be in tomorrow's pipeline. But the promise of more oil in the future has an effect on prices today. The opposite — a future of artificial scarcity — is the reason oil is currently trading at elevated levels.
Despite its denials, the administration has also increased gasoline prices through its promotion of a weak dollar. Because oil is traded in U.S. dollars, those who sell it on the open market demand more dollars for the same amount of crude because those dollars are worth less.
This administration includes an energy secretary who has pined for European — meaning $8-a-gallon — gas prices. But the White House would rather the public remain ignorant of its role in driving prices higher. So it cynically kicks off probes of investors and oil industry executives that will turn up absolutely nothing.
Of this, we can be confident. At last count, 35 such investigations have been conducted over the decades,and none — not a single one — has turned up wrongdoing by investors or oilmen.
No collusion. No price manipulation. No consumer gouging. Just a market doing what markets do — at least to the extent that they are able to when foreign governments or foreign-government-controlled companies manage 90% of the world's crude.
Rather than carry out another useless inquisition of private citizens, our political class should be investigating its own role in the price crisis. The result would be a revelation for those who fall for Washington's line about greedy businessmen whenever gasoline prices become painfully high.
Not that we blame the public for swallowing that tale. It is, after all, what the public has been bombarded with for years from morally and intellectually corrupt politicians and complicit media.
No such self-investigation is forthcoming, of course. Meanwhile, oil has climbed into a zone — a doubling of price — where recessions are produced. Is that what the White House wants? Even if it's not, that's what it may get.