Anti-corporate demagoguery. Is there anything it can’t solve?
President Obama says he is ready to go after gasoline price gougers announcing today a new task force to “root out any cases of fraud of manipulation” of oil markets… “Folks are out there dealing with gas at $4 a gallon,” he told the Nevada crowd, “it’s tough.” He said he had already asked the Attorney General “to look into any cases of price gouging.” The Attorney General’s new energy fraud team will… “root out any cases of fraud or manipulation in the oil markets that might affect gas prices, and that includes the role of traders and speculators. We’re going to make sure that nobody’s taking advantage of American consumers for their own short-term gains.”
Coming from a trailblazer of union-friendly crony capitalism, you’d expect more circumspection about taking advantage of American consumers for short-term gain. Maybe the oil industry isn’t heavily unionized, or perhaps the issue is too pressing to be picky about who gets thrown under the bus. In any case, oil companies are this week’s designated target for grassroots outrage and — if reports of $5 gallons don’t go away soon — that’ll be true for some time to come.
But before we kick off this latest round of scapegoating — scapegoating being the necessary relief valve for populist leaders who mix impossible promises of utopian “unity” with impractical prescriptions for radical “change” — some context from the beginning of the year might not be out of the question:
Domestic oil production faces a long-term decline in the wake of curtailed offshore drilling in the Gulf of Mexico, stemming from the BP oil spill last year. In four to five years, a loss of several hundred thousand barrels a day from the Gulf is likely, enough to significantly boost U.S. reliance on imported oil. It’s no surprise, really. New deepwater drilling has largely come to a standstill in the Gulf of Mexico. Despite the October end of the White House moratorium on deepwater drilling, not a single new permit has been issued for drilling in waters more than 500 feet deep. And even permits for shallow-water drilling are currently taking twice as long to complete — roughly 60 days — as before.
The expired moratorium had been justified in the first place by misrepresenting the administration’s expert panel.
After the formal moratorium became merely de facto, Abe sarcasically noted that “what America needs right now is a loss of jobs and a constriction of the economy in response to a one-off accident.” And while that was a fair point, one could hardly have expected the Obama administration to take the logic seriously. Why bother, when there are corporations that can be blamed for counterproductive policies? That’s so much easier than coping with the cognitive dissonance of balancing unsound ideology and economic reality.