Well, as Dutch Reagan would say: “There you go again.” Let’s see. Gasoline prices are fast approaching — and in some places surpassing — $4 a gallon. The oil barons are set today to report record profits. And by many accounts we are only one hurricane in the Gulf away from prices at the pump at $6 — or higher.
What to do? What to do?
Well, Prez O has done the inevitable when it comes to looking at problems Inside the Beltway. He’s forming a task force — the Oil and Gas Fraud Working Group — to investigate “fraud or manipulation in oil markets that could affect gas prices.” Here’s from Politico:
President Barack Obama reiterated his plan to stabilize soaring gas prices, telling Americans in his weekly address Saturday that “instead of subsidizing yesterday’s energy sources, we need to invest in tomorrow’s.”
At a time when the economy is struggling to rebound and many people are still searching for jobs, a $4 per gallon price tag is “just another burden when things already are pretty tough,” Obama said.
Echoing a criticism he has frequently made in the past, the president condemned politicians who “score a few points” by offering quick-fix solutions whenever there is a spike in gas prices. “The truth is, there’s no silver bullet that can bring down gas prices right away,” Obama said.
On Thursday, the White House unveiled a task force called the Oil and Gas Price Fraud Working Group, which would investigate “fraud or manipulation” in oil markets that could affect gas prices.
“We will be vigilant in monitoring the oil and gas markets for any wrongdoing so that consumers can be confident they are not paying higher prices as a result of illegal activity,” Attorney General Eric Holder said in a statement after Obama announced the news at a town hall in Nevada. Holder vowed to take “swift action” against those who illegally contribute to gas-price gouging and manipulation.
And more from the article:
Finally, the president said the country must continue to make long-term investments in clean and renewable energy sources, citing the fuel economy of cars and trucks, and hybrid technology. Obama maintained that his budget proposal takes a far more “balanced approach” to spending cuts proposed by House Republicans that include a cut in clean-energy investments of 70 percent.
“Yes, we have to get rid of wasteful spending … But we can do that without sacrificing our future,” Obama said. “We can do that while still investing in the technologies that will create jobs and allow the United States to lead the world in new industries. That’s how we’ll not only reduce the deficit, but also lower our dependence on foreign oil, grow the economy and leave for our children a safer planet.”
MSNBC’s token conservative Pat Buchanan has really been having a lot of fun lately taking on the liberals at the so-called news network he contributes to.
On Monday’s “MSNBC Live,” Buchanan in the middle of a discussion about oil prices and subsidies told the host, “You’ve got to learn a little bit about supply and demand as Barack Obama never did when he was out there in that Saul Alinsky outfit in Chicago” (video follows with transcript and commentary):
PAT BUCHANAN: The problem Cenk is the American dollar is sinking like a stone. It’s almost at an all-time level. It keeps going down to the point where Standard & Poor’s thinks we’re going to have to default. This is the responsibility of Barack Obama and no one else. It’s in terms of dollars that the gasoline prices are soaring.
CENK UYGUR, HOST: Pat, if you’re going to try to make a case to the American people that gas prices are going down relatively and that we should be giving the oil companies more subsidies, I’m going to wish you a lot of luck.
BUCHANAN: Well, maybe you can’t make the case, but you know, you got, you know, Cenk, you’ve got to learn a little bit about supply and demand as Barack Obama never did when he was out there in that Saul Alinsky outfit in Chicago.
For those that are unfamiliar with Buchanan’s point, part of the reason for the spike in oil and gas prices is the declining dollar. Historically, there hasn’t necessarily been an inverse relationship between the two, but there most certainly has been in recent years largely due to what’s called the carry trade.
Put simply, large investors can short the dollar borrowing the proceeds at a virtually zero percent interest rate and investing same in oil, gas, gold, or whatever they want. This has been a very profitable arbitrage in recent years as traders have made money on the downside in the dollar and the upside in commodities.
Of particular concern to average Americans not involved in such transactions, the lower the dollar goes as a result of this nation’s profligate spending and runaway budget deficits, the higher oil and gas prices go.
One of the other reasons normally attributed to an inverse relationship between oil and the dollar is the fact that oil is traded around the world in dollars. So, as the dollar declines in value, it must therefore be able to purchase less volume of oil. This latter explanation has not always been the case historically, as there have been many times in the last century when oil and the dollar rose and declined coincidentally.
As for Uygur, clearly such economic and financial matters were way over his head leading Buchanan to have some fun at his host’s expense. Doubly delicious was that this happened shortly after MSNBC’s Chris Matthews demonstrated a similar ignorance of the law of supply and demand on “Hardball.”
Makes you wonder if one of the requirements to be a host at this sad excuse for a news network is to have absolutely no rudimentary knowledge of business.
And Paul Krugman wonders why voters are so ill-informed.