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About a week ago, when I had just filled up my tank at $1.75 per gallon, I was talking with a friend of mine and we were laughing because we wanted to know where all the grandstanding and hyperbole about "the speculators" had gone.
Why do we find this so funny? Because it wasn't that long ago (just a few months) that the Has-been Media (MSM) reported on it every 3 minutes and anyone in politics (see here and here) were "gonna do something" about THOSE speculators and all THAT speculating!
What happened? Why all the sudden silence on such an important "issue?"
No "windfall profits" tax was levied against the oil companies. Congress didn't enact a bunch of new regulations on speculators. We didn't even get a "tax holiday."
So ... without any "help" (and I use that term loosely) from Washington, and absent vengeful (but politically appealing) "crack-downs" on Big Oil and/or those stinkin' speculators, how did the price at the pump drop so low so fast?
Leftist radio talk show host Ed Schultz thinks he has the answer. Schultz, on November 12, 2008 (after the election was over) told his listening audience (emphasis added):
"You know what's gonna happen? Gasoline's gonna be a buck 47 ($1.47) when Bush gets out of office. This has just been all so pre-arranged. Oil fell 5 percent to 56 bucks a barrel today. Wow. OPEC officials concerned about the oil's steep drop from record highs of $147 per barrel in July, said the cartel could possibly decide by the end of the month to cut production again to raise prices."
Yep! You read that correctly. Schultz believes the "Vast Right-Wing Conspiracy" controls world oil prices and lowered the price to give Republican's a boost on their way out the door (huh?).
Ed, take a deep breath, because I can put your mind at ease. First the obvious ... the Republican Party got slaughtered during the elections. If "they" could control world oil prices, it would have went to oh, I don't know ... 50 cents a gallon? But that would have helped them stay in office, not leave. And doesn't the short-term political memory of Americans mean the new administration would get the credit? Ah, nevermind logic, its Ed Schultz.
More importantly ... the "Vast Right-Wing Conspiracy" doesn't meet without me. I bring the whiskey and set the agenda. Rush Limbaugh brings the cigars. We never even brought your wild theory to the table, it's too absurd.
Here's the real secret in the declining price of oil:
Markets work.
Higher prices result in less demand. According to the US Department of Transportation, "Americans are continuing a 10-month-long decline in driving habits ... In August 2008, Americans drove 15 billion fewer miles, or 5.6 percent less, than they did in August 2007 - the largest ever year-to-year decline recorded in a single month .."
Brietbart reports that "Traders are still worried that a global recession will undermine energy demand." And OPEC (the Organization of Petroleum Exporting Countries), who cut oil production last month, is talking about cutting production again. Why? Because their revenues are dropping!
It's not complicated folks. Markets work.
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