By Rick Manning — In his latest attempt to seem relevant to the economy that is sinking his re-election chances, President Obama demanded that Congress give him $52 million to seek out and end oil market manipulation.
“None of these steps by themselves will bring gas prices down overnight,” Obama said. “But it will prevent market manipulation and make sure we’re looking out for American consumers.”
However, in looking at the quote, one has to wonder who is responsible for “manipulating” the oil market?
Dictionary.com defines the term manipulate as, “to manage or influence skillfully, especially in an unfair manner.” When someone buys the commodity at a high price and the market brings the price down, they lose money, sometimes lots of it.
When someone buys the commodity at a low price and the market takes the price up, they make money, sometimes lots of it.
And while sometimes so-called speculators can drive prices up, the President of the United States can have a much greater impact on these prices simply by the policies he embraces.
This definition makes one wonder if the markets were being manipulated or if they were responding rationally when Obama appointed an Energy Secretary who publicly argued to the Wall Street Journal for higher gas prices only months before his appointment?
The definition of manipulate makes one wonder what the President himself is doing as he continues to threaten to veto a highway funding bill that would mandate approval of the Keystone XL pipeline. Is he manipulating the market by denying the Keystone XL pipeline that will allow the vast oil reserves in Alberta, Canada to reach the market, and increase the overall supply of oil?
The truth is the oil market is neutral. Investors and consumers compete to purchase the commodity in the open market making individual judgments on how the supply, demand, inflation and other factors will impact the price in the future.
If there is anticipation of a potential war in the Middle East, then concerns about supply will drive prices up, as they should.
If, there are significant new sources of oil coming on line, and investors believe the supply is secure or even abundant, the prices come down.
While Obama has attempted and failed to impact the demand for oil by throwing billions of taxpayer dollars at various failed new age energy schemes, he has succeeded in cutting the anticipated supply of oil that is being produced on federal lands, even as those sources he doesn’t control are increasing production overall.
All this leads to the obvious question: would a government assigned to root out manipulation of the oil market which has led to politically untenable high gasoline prices investigate someone who:
- Had a high ranking executive express a strong desire to have gasoline prices significantly higher; and
- Engaged in policies that are designed to choke off the supply of domestically produced oil?
If so, then perhaps the first person perp-walked for manipulating the oil market should be the man who lives in the big White House on Pennsylvania Avenue in Washington, D.C..
Of course, that would require that this President engage in some self-examination of the wreckage created by his policies rather than constantly seeking someone else to blame.
Rick Manning is the Communications Director of Americans for Limited Government