Gas Prices and Price Gouging

Here we go again.  Last week, Obama said he would set up a task force to investigate potential manipulators in the oil and gas market.  Now Obama is calling for the repeal of tax breaks (in other words, increasing taxes) for the oil industry.

Obama is a typical leftist Democrat in that he likes to speak about helping the poor and about cracking down on the rich.  Yet, for someone who really understands economics and studies his policies, his actions are about the opposite.  If Obama were really serious about helping the little guy, he could take several steps to dramatically lower gas prices.

Obama could advocate a repeal of the federal gas tax.  He could advocate the repeal of regulations on the gas and oil industry.  He could advocate the selling of ANWR and other federal lands that contain oil (and this could have the added benefit of paying off some of the national debt).  He could also stop fighting wars in the Middle East and just allow Americans to buy oil from foreigners, instead of trying to occupy other countries for their oil

Most importantly, if Obama really wanted to help the little guy with lower gas prices, he could stop signing legislation that runs up the national debt, which in turn encourages the Fed to create more money.  The primary reason for high gas and oil prices is a monetary one.  The Fed has tripled the adjusted monetary base over the last couple of years and we should be surprised that oil is only around $112.

The reason that gas prices are so high is due solely to the Fed and the federal government.  Obama is trying to find a scapegoat for his failed policies by blaming oil companies and speculators.  He can talk about manipulators of the market, but the people he is talking about serve a legitimate function to the market process.  These people help the pricing process be more accurate and help direct supply and demand.  If speculators are right in driving up the price of oil, then it is signaling the market to find more supply and to cut back its use.

Meanwhile, the politicians of both major parties serve a function of distorting the market and making everything more expensive.  Then they talk about a problem that they created and try to pass the blame to anyone but themselves.  They are trying to take advantage of the ignorance of the general public.  I really do hope that most Americans wake up to this scam and realize that they are voting for the real enemy.