It seemed appropriate to drag something out of the musical archives with this song written in 1929. After all, it was the theme song for FDR in his 1932 presidential win and is also the somewhat “unofficial” song of the Democratic party. And it is to their current standard bearer, President Obama to whom we turn. The subject of this post is the price of gasoline.
You may remember an earlier post in which I suggested that I would not be surprised to see gasoline hit $5.00 per gallon during the summer. I am glad to report that I may have erred to the high side. The most anyone has reported paying is a friend who has homes both in California and Las Vegas and said that she had paid over $4.50 per gallon.
But the price of both oil and gasoline have declined significantly over the past six weeks. Oil topped out at $110 a barrel and is now trading in the low $80’s. The highest price I saw for mid-grade – my car’s beverage of choice – has dropped from about $4.05 to $3.88 or thereabouts. I expect to see a few more cents’ decline as this week moves forward.
Now what is the cause of all this movement in the petroleum market? Perhaps you remember that about three or four weeks ago, President Obama stormed out to give a speech on the very subject. It was an important speech and if you do not remember it that is probably because he has delivered twenty or so more important speeches since then.
Well, to recap the President’s remarks, “We have high gas prices because the market is being manipulated by speculators.” He went on to promise to put an end to this dirty-dealing by hiring more investigators for the CFTC – the agency which oversees commodities trading – and to root out all evil-doers.
Perhaps you have seen the Federal government in action (or is that inaction). Surely you realize that an administration which left hundreds of “important positions” open for almost six months after taking office, cannot possibly already have hired these new protectors of our welfare. So what has caused the decline in the price of oil and the amount we pay at the pumps?
They do say that politics makes strange bedfellows. I think that the President can say, “Thank you first and foremost to Greece and Spain.” Oh yes, there’s that other thing called a free market – but I would not expect the President to acknowledge that.
One final thought. If it were true that speculators drove up the price of oil and gas – why is it not equally credible that they drove it down as well? I’ll let you know when the President is ready to acknowledge them in another important speech.
In the meantime, we can all rejoice and sing a few choruses of “Happy Days Are Here Again.”