Sunday, May 20, 2018
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Pumped-up rhetoric

President Obama is fond of saying there is no silver bullet to bring down gasoline prices. This week, however, he went into the silver-bullet business.

With gas prices high and an election looming, the President announced a very public "crackdown" on "those who manipulate the market for private gain at the expense of millions of working families." He asked Congress to spend $52 million on more oversight, allow regulators to set higher capital requirements in oil markets, and mandate a few other steps.

Many of the policies Mr. Obama proposes are fine, such as technology upgrades at the Commodity Futures Trading Commission (CFTC). Yet the administration can't offer a satisfying explanation of why they are so necessary as to require emergency congressional action.

The only emergency seems to be a mindless election-year war over who's to blame for sustained high gas prices. Mr. Obama has repeatedly given the most reasonable answer: those shadowy actors called supply and demand.

The White House insists that high volume and volatility in oil markets suggest that regulators need more tools to monitor and control them. But a senior administration official deflected questions about whether regulators have detected any hint of manipulation, and would not give an example of the sort of rigging the President suspected regulators might find with more resources.

The official instead repeatedly pointed to Enron -- a scandal involving electricity, not oil, markets. So the argument boils down to: "Maybe the CFTC will find something; we don't really know what."

No one should imagine that this will help much at the pump, no matter how much the White House talks of the urgent imperative to protect vulnerable consumers. America has been down the "blame price manipulators" road before.

In 2006, President George W. Bush ordered an investigation of gas-price gouging that had trouble finding even credible complaints of price manipulation. In 2008, the CFTC said speculation wasn't systematically driving price increases.

Recent history shows that gas prices over time depend on a range of factors, predominantly supply and demand fundamentals, that the U.S. government can't easily control. And even if bona fide Wall Street manipulation were a primary force moving prices, the United States alone can't police the world market.

As the President has said, the real answer is not to give voters hope in false solutions -- which Mr. Obama's rhetoric this week can't help but do -- but to get America off oil, slowly but surely.

-- Washington Post

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