Perception: Increasing oil prices may be a complicated issue, but we know that certain parties – i.e. oil companies and President Bush – are exploiting the situation.
Economic Reality: Oil prices are not immune to increased demand price pressures. The incentives to address the problem politically [identify bad guys] differ from potential economic solutions – decrease demand [kill Commies] or increase supply [kill environmentalists]. Gee, can’t we do both Santa? See the column by economist Thomas Sowell – an excerpt below:
“Is there anything complex about the fact that with two countries– India and China– having rapid economic growth, and with combined populations 8 times that of the United States, they are creating an increased demand for the world’s oil supply?
The problem is not that supply and demand is such a complex explanation. The problem is that supply and demand is not an emotionally satisfying explanation. For that, you need melodrama, heroes and villains.”