Our inalienable right to low gas prices
As Americans increasingly feel the pain of long-distance commuting, economic ignorance of politicians combines with our perceived inalienable right to low gas prices to find a scapegoat in the world’s most hated minority in bad economic times, the speculator.
As the economist and political philosopher Anthony de Jasay recently pointed out, politicians seem to believe that the oil price is capable of lifting itself up by its own bootstraps. So Congress wants to fix this by passing the “Stop Excessive Energy Speculation Act.” The act orders (among other things) the Commodity Futures Trading Commission (CFTC) to distinguish between “legitimate” and “nonlegitimate” traders. As a recent Wall Street Journal opinion piece points out, this distinction does not make sense:
Traders with exclusively financial purposes take the other side of options when the goals of “legitimate” short and long hedgers don’t match up. Arbitrarily discriminating between commercial and financial investors is not only pointless — price risk is price risk — but destructive.
Reasons for high energy prices include tight margins between world-wide supply and demand and the weak dollar. As the Wall Street Journal concludes, “congress could avoid blowing up the U.S. futures market by conceding that reality.”
