For the few weeks now, I’ve received an increasing number of calls from reporters and TV & radio producers to discuss the latest of a never-ending spate of conspiracy theories regarding “Big Oil.” This one has it that somebody — oil companies, the Saudis, and/or Goldman Sachs — is manipulating the gasoline market downward in order to reduce public anger over pump prices. Lower prices = less angry voters, and the less angry voters are, the less likely they are to throw Republicans out of office. Or so the theory goes.
I’ve been content to dismiss this stuff as not worth my time, but lo and behold, the Washington Post thinks the story so significant that it warrants a spot on the front of today’s Business section.
To be fair, Post reporter Steven Mufson does a nice job gently deflating this nonsense, but the fact that these claims need to be addressed is depressing. You know a market-conspiracy theory is really and truly whacked when even Tyson Slocum over at Public Citizen isn’t buying it.
While Mufson’s piece is fine, an even sharper rejoinder was made the other day by Professor James Hamilton, a noted economist who engages in energy economics (among other things) over at the University of California at San Diego. While Hamilton concentrates most of his fire on the Goldman Sachs variation of the conspiracy, he makes a nice point about these sorts of claims in general. To whit, no evidence is ever provided. To believe things without evidence is to be the world’s all-purpose dupe.
Unfortunately, this particular conspiracy theory will probably continue to gain traction because I suspect gasoline prices will continue to drop at least until the Thanksgiving holiday. That’s because (i) gasoline prices have historically behaved in exactly this fashion for reasons that are utterly unmysterious to energy watchers, and (ii) the drop in crude oil prices has not yet been fully reflected in the drop in gasoline prices (and if you want to know why that probably is, check this out). Accordingly, pump prices may well continue to decline even if oil prices stabilize at current levels.
That ought to really drive the Dems around the bend. Expect a spate of “Big Oil Robbed Us!” stories if the Democrats fail to seize the Congress in November.