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The laws of supply and demand



Oh. My. God. Have you seen the prices? And the profits? The obscene profits these people make gouging us for something that is absolutely necessary to our lives? We're not talking a luxury item here. This is a basic human need, and these shameless profiteers paid next to nothing for it then turn around and sell it for big bucks. While they blow smoke about "supply and demand" when the price shoots through the roof, they know we have to have it, so they squeeze us for every penny they can.

How do they sleep at night, these evil, disgusting, moneygrabbing ... homeowners?

Oil? Who said anything about oil? I'm talking about that most basic human need: shelter. About all those "price-gouging" American homeowners who bought houses 20 year ago and, thanks to the housing boom, are making hundreds of thousands of dollars profiteering off of decent, hard-working people who need a place to live.

Right, Nancy Pelosi?

Uh, no. Congress wants to investigate Big Oil. President Bush has issued stern warnings to Big Oil. The average American shelling out $3 a gallon fantasizes about climbing into his SUV and running down an oil exec on a dark, country road.

But you don't want to haul in Granny for cleaning up during the housing boom because there's a reasonable chance that, one day, that could be you.

Therefore, homeowners who make a killing selling their houses are just "selling at market prices," while people who happen to own large amounts of oil are Satan incarnate and secret allies of Al Qaeda.

Well, I'd be happy to work myself into a lather over oil prices, but I'm still trying to recover emotionally from the gas crisis of 1996. Don't you remember it? President Clinton selling $227 million of crude oil from the Strategic Petroleum Reserve to rescue desperate American drivers from the evils of $1.50 gallon gasoline and $25 a barrel for crude oil? Congress investigated, Democrats demanded action, CNN screamed "We're doomed!" and...

And nothing. Nobody did anything, no executives went to prison, but the price of oil eventually plunged back to just over $10 a barrel. Gas went back to a buck a gallon and everyone went on with their lives. Remember?

Well, surely you remember the terrifying oil crisis of the year 2000, when President Clinton dipped into the nation's petroleum reserves again in yet another election year — wow, what a coincidence! — in response to soaring energy costs. This time it was New Englanders facing an icy death due to crippling heating oil prices as oil shot up to the unimaginable price of $33 a barrel!

Investigations commenced, brows were beaten, homeowners in the northeast were featured in campaign ads and...

Once again, nothing happened — except that the price of oil fell to around $14 a barrel all by itself. Nobody froze to death thanks to the one government policy that has, on average, done more good than any other: Doing nothing.

And here we go again. Oil is more than $70 a barrel! Gas is approaching $3 a gallon! Don't just stand there — panic!

Why? Er, because, well, I mean, hey — don't try to confuse the issue. Big oil is bad! Prices are high! I'm not happy! Do something, dammit!

So the president, the Senate leader, and the Speaker of the House are all demanding yet another investigation into the single most investigated industry in the history of America, the energy companies. And, once more, here's what millions of tax dollars spent on these hearings will find:

• Every time the price of oil goes up, the price of gas does, too.

• Every time the price of oil goes down, the price of gas goes with it.

• Far from artificially limiting the supply to drive up prices, oil producing companies are pumping out record amounts of oil. Unfortunately, it's still not enough.

• As long as there's somebody in China, India, or Europe willing to pay $70 for a barrel of oil, nobody is going to sell it to America for $50 — not even Americans.

No scheme. No collusion. There are simply too many oil producers, refiners, and retailers in the world for a price-fixing scam to work, no matter what Oliver Stone and Howard Dean tell you.

Unfortunately for the oil industry, facts are particularly easy to ignore in an election year. Pointing out that oil companies underperformed the economy as a whole for most of the past 20 years, or that "good" corporations like Apple, Intel, and Google all earned a higher percentage of profits than oil companies last year, all this is wasted breath.

Home prices go up and it's "the market." Gas prices go up, and it's "the evil Tri-Lateral Commission!" Gas prices plunge again, as they will later this year and, uh, what were we talking about again?

Remember: Unlike every other business in the known universe, it's not the job of Big Oil to make money. It's their job to keep us happy.

Or else.

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