I am no economist, though I did minor in economics at some distant point in the past. I remember a visiting lecturer in my labor economics class one day preaching gloom and doom and telling us we would run out of oil in the next generation or so.
There have always been gloom and doomers and charlatans, and there always will be. There will always be a receptive audience for them. And when their predictions fail, there will always be people who still swear by them — and even more who refuse to hold them accountable.
I don’t want to mention any names — like Paul Erlich — of alarmists who were highly popular around the time I was taking labor economics and Money and Banking. Nor do I want to mention that many of their predictions were not just wrong but embarrassingly wrong — so wrong that they are walking advertisements for the incompetence of their author. Yet, Erlich remains an icon among those who prefer their secular faith of gloom and doom over facts and reality.
Though some of the stated bases for the alarmism of the Sixties and Seventies may have changed (example: from global cooling to global warming), their bogeymen/targets remain the same. No matter what environmental scare they have sported from time to time, the culprits are always the same.
The foremost villain, of course, is America, home of the rich, greedy, and voracious consumers of the earth’s resources. Next, are big corporations, whose favorite sadistic pastime is to pollute. In fact, so inherently evil are they that they would probably poison the air and contaminate the water even if it would reduce their profits to do so. And they will even exploit resources they don’t need, to make sure that Third-World countries suffer. But the worst of the black-hatted rogues are the oil companies. There are simply insufficient adjectives to describe them.
The politically correct culture has been so successful in demonizing "Big Awl" that the political class needs no supporting facts when issuing charges against them. When the price of oil rises too fast to suit our politicians — and the rest of us, for that matter — they can just accuse the oil companies of gouging, even if there is no evidence suggesting collusion or price fixing.
It is outrageous and destructive when government officials make slanderous charges like this without proof. But it takes the heat off of them for knuckling under to the scaremongers and not taking action to expand our energy resources — such as building new refineries, drilling for oil off the coasts and in Alaska, and exploiting alternative avenues — like nuclear energy.
When oil prices shoot up rapidly, my first instinct is to attribute it to supply and demand. I don’t think even "Big Awl" would have the wherewith-awl to engineer this by itself anyway, especially given the constant scrutiny they’re under. Plus, why would they want to risk incurring the inevitably punitive wrath of the political demagogues? As Thomas Sowell has noted, there have been countless investigations of Big Awl anyway and Big Awl has consistently been exonerated. And as "Fox News’" Neil Cavuto pointed out to Sen. Dick Durbin, the oil companies’ average profit on gas is 9 cents a gallon, while we pay about 50 cents in taxes per gallon to the government.
The inexorable forces driving these prices — supply and demand — are bigger even than Big Awl. No matter how many prevailing economic theories of the Sixties and Seventies (and earlier) have now been discredited — like much of Keynesian economics or the Phillips Curve, which said there was a necessary trade-off between unemployment and inflation, one fundamental law has remained constant. If demand exceeds supply, prices will rise. You can bank on it.
It is really sad, though predictable, that Democratic leaders are blaming Big Awl and demanding an investigation. It is much sadder that some Republicans are going along with them. Some of these gasbags are demanding the resurrection of the windfall profits tax. Would it be too much to ask for them to review their history books — or even the Nexis database — to see what happened the last time they tried that? Hint: decreased domestic production and increased foreign oil dependence. How refreshing it would be if we could see a little statesmanship and courage.