Like Oil and Water

Gas prices are high.  This is an election year in the US.  Here comes the politics.

President Bush, under pressure to do something about gasoline prices that are expected to stay high through the summer, ordered an investigation into possible cheating in the markets. The government also asked states on Tuesday to guard against unfair pricing.

During the last few days, Bush asked his Energy and Justice departments to open inquiries into whether the price of gasoline has been illegally manipulated, said White House press secretary Scott McClellan. Bush planned to announce the action Tuesday during a speech in Washington.

It's unclear what impact, if any, Bush's investigation would have on prices that are near or at $3 a gallon or more. Asked if Bush had any reason to suspect market manipulation, McClellan responded, "Well, gas prices are high right now, and that's why you want to make sure there's not."

Republicans who control Congress have become concerned that the high cost of filling up could become a problem for them in the November elections. Polls suggest that voters favor Democrats over Republicans on the issue, and Bush gets low marks for handling gasoline prices.

Comments

[Eric Parsons]

I am certainly no fan of the Bush administration, but if people are going to attack them (please do), they should at least try to attack them on valid issues. The government does not control oil prices, and the simple fact of the matter is that they shouldn't. It's a market issue. No one argues that the President should look into the high price of salmon, a very healthy food choice that many poor people cannot afford to add to their diets. Really, this whole idea is ridiculous. An investigation into high oil prices is just political BS that wastes valuable taxpayer dollars that could be spent on something much more useful.

[Phil]

E... agreed. While one can make an argument that Bush administration policies have had an effect on oil prices, I'd like to "fah"-off the queries of "what will Bush do to relieve gas prices" as being silly and ignorant. But calls for central direction, such as this, concern me greatly. My guess is that the market for oil, like the market for most (every???) goods is too complex for any one person or any group from the government to comprehend well enough to be able to direct it better than those "in the trenches" as it were and if these pronouncements of action are more than just political hot wind, things probably will become worse instead of better.

I think a reading of Leonard Read's "I, Pencil" is in order for some. http://www.econlib.org/library/Essays/rdPncl1.html