President Barack Obama decided that recent spike in gas prices is not due to increased demand from overseas or his policies designed to block domestic oil, it is due to…oil speculators.
Right? What? How can speculators be the issue? There is no market if people only bet prices will go up and the price stabilizes where there are winners and losers – betting prices will go up right now is a very bad idea even if the president did not put on a populist press conference.
He hates oil, that much is obvious – America was number two in solar industry spending last year at $40 billion. The problem is that the top player in the solar business, China, relied on the private sector and the American flavor is almost exclusively funded by taxpayers – yes, the communist used capitalism and the home of capitalism uses the government. He let the Keystone XL proposal sit for years and then when prices started to rise and demands for a decision erupted, he claimed the areas where this 3 foot pipeline would be built were too ecologically ‘sensitive’ to risk, despite his own government scientists saying it was not risky, so he canceled it. But then he was scolded by unions for canceling good jobs so he promised to fast track the next segment – but TransCanada has not even applied for that part yet.
Tax breaks for oil companies – you know, paying less taxes on profits – are bad yet outright propping up of solar is good? The price of oil has gone up, no question. The solution cannot always be more regulations and more money spent but now $52 million is going to go toward monitoring “illegal” speculation, whatever that means. Because more government employees are needed to solve a problem we don’t even know we have. And don’t we already have the Federal Trade Commission and their tens of billions of dollars in funding to monitor this? Sure, but those don’t go just after oil companies.
Who and what is this secret cabal manipulating prices illegally? The White House did not say. It’s difficult to find actual impartial oil analysts who think speculators have any influence on the price of oil at all, much less “illegal” ones, and we still got no definition of what that even means beyond populist ‘it hurts millions of Americans’ rhetoric. Are you worried about the price of pork bellies because someone might be speculating in those?
Oil prices go down when output rises – we can do that in North America if the political grandstanding stops. Coffee prices were high, now they are at an 18-month low. Speculators who bet on them going up lost money and it didn’t cost taxpayers an additional 50 million bucks to make coffee cheaper. The price of oil will also drop if supply increases or demand decreases. The 1980s saw shocking declines in the price of oil due to the Alaska Pipeline. Hate-filled dictators got a lot less rich during that time too. The solution to high prices is simple and doesn’t require creating straw men to knock down.
Maybe the president thinks running oil companies out of business will force us all to put solar panels on our cars. I suppose that would make all those wasted investments in solar companies look a little smarter.