It has to be tough to be Charles Krauthammer and be an inside-the-Beltway pundit whose IQ is above 150 yet commenting on the stupidity he sees in Washington on a daily basis. Today's boil of intellectual idiocy that Krauthammer lances -- the "price gouging" canard viz. oil companies:
Nothing can match the spectacle of politicians scrambling for cover during a spike in gasoline prices. And this time, the panderfest has gone all the way to the Oval Office. President Bush has joined the braying congressional hordes by ordering the Energy and Justice Departments and the FTC to launch an investigation into possible gasoline price-fixing.
What a disgrace.
Entirely too true. Unlike The Monk, who wrote a fine screed re: the oil supply and pricing situation earlier this week (if he does say so himself), Krauthammer was ripping the CLINTON Adminstration for failing to develop known oil fields 10 years ago:
American demand is up because we've lived in a fool's paradise since the mid-1980s. Until then, beginning with the oil shocks in 1973, Americans had changed appliances and cars and habits and achieved astonishing energy conservation. Energy use per dollar of GDP was cut by 30 percent in little over a decade. Oil prices collapsed to about $10 a barrel.
Then amnesia set in, MPG ratings disappeared from TV ads and we became ``a country of a million Walter Mittys driving 75 mph in their gas-guzzling Bushwhack-Safari sport-utility roadsters with a moose head on the hood, a country whose crude oil production has dropped 32 percent in the last 25 years but which will not drill for oil in the Arctic National Wildlife Refuge for fear of disturbing the mating habits of caribou."
I wrote that during the '96 witch hunt for price gougers. Nothing has changed. Except that since then, U.S. crude oil production has dropped an additional 12.3 percent.
Yes, it gets worse: as The Monk noted, the US lacks ethanol supplies. It could import more ethanol, but will not because Iowa corn farmers will go ballistic. IT could alleviate the ethanol supply problems by ensuring liability protection for MBTE suppliers and allowing use of that additive, it did not. In other words, petty politics and false environmental concerns have stultified US oil production. So the result:
Last year's energy bill mandates arbitrary increases in blended ethanol use that so exceed current ethanol production that it is causing gasoline shortages and therefore huge price spikes.
Why don't we import the missing ethanol? Brazil makes a ton of it and very cheaply. Answer: The Iowa caucuses. Iowa grows corn and chooses presidents. So we have a ridiculously high 54-cent ethanol tariff and ethanol shortages.
Other regulation requires specific (``boutique'') gasoline blends for different cities depending on their air quality. Nice idea. But it introduces debilitating rigidities into the gasoline supply system. If Los Angeles runs short, you cannot just move supply in from Denver. You get shortages and more price spikes.