Tuesday, April 1, 2008

Are Hillary Clinton and Barack Obama opposed to the Law of Supply and Demand?

From a recent news story:

. . . . Clinton has taken to lashing out at the Bush administration's oil policy.

"The president is too busy holding hands with the Saudis to care about American truck drivers who can't afford to fill up their tank any longer," she said.

Obama, meanwhile, said Monday a crackdown is needed on oil companies.

"[We] need a president who can stand up to Big Oil and big energy companies and say enough is enough," Obama said Monday

I've got some news for both of them. We have pretty much the same oil industry that we had back in 1998, when crude oil traded at an average of about $12 a barrell -- about one eighth of today's price.

The current spike in oil prices has very little to do with the oil industry or the Bush administration. It is part of a major worldwide rise of the prices of many basic commodities, including gold, silver, oil, and steel. The cause of this spike is a combination of still-high oil consumption in the USA and rapidly rising consumption in booming Asian economies, particularly China.

Heck even the Onion understood perfectly well what was happening -- back in 2005.

I have a feeling that both Clinton and Obama know perfectly well what is going on, too. I suppose I can't blame them too much for playing to their audience. But it sure makes them look stupid.

As for the Saudis, they could probably lower prices by increasing production. But they don't appear to be inclined to do this. And even if they were, would they really be doing the world a favor?

No comments: