- The Washington Times - Friday, March 10, 2006

The Supreme Court’s recent 8-0 decision (Justice Samuel Alito not yet participating) shot down a claim oil companies were colluding in setting prices. That claim was upheld by the far-left U.S. 9th Circuit Court of Appeals but neither liberals nor conservatives on the Supreme Court were buying it.

This unanimous vote should also tell us something about those politicians forever blaming rising gasoline prices on oil company collusion and “greed.” There is no point exposing a lie unless we learn to be skeptical the next time the liars come out with the same story.

After hurricane Katrina destroyed a lot of oil processing capacity around the Gulf of Mexico, there was — surprise — less oil being processed. With less oil supplied — surprise again — gasoline prices rose.

However much economists rely on supply and demand to explain price movements, politicians need villains, so the pols can play hero. Big Oil is a favorite villain and has been for decades.

There is nothing like the political melodrama of summoning oil company executives to televised hearings before a congressional committee, where politicians can wax indignant at Big Oil’s profits.

It so happens Big Government takes more money in taxes out of a gallon of gas than Big Oil takes out in profits. But apparently somehow taxes don’t raise prices. They certainly don’t raise indignation from the politicians who voted for those taxes.

After the oil processing facilities were repaired and put back in operation — yet another surprise — prices came back down. Supply and demand have been doing this for centuries but apparently the word has not yet reached some politicians.

There is another aspect to supply and demand. As countries like China and India have in recent years begun allowing more market transactions to replace government controls, their economies have begun growing much more rapidly.

Growing economies mean rising demand for food, for shelter, for more of the amenities of life. That in turn means a rising demand for oil, leading to rising oil prices around the world.

Those who think in supply-and-demand terms suggest — do surprises never end? — we ought to supply more oil to meet the rising demand. But the very politicians noisiest about the high price of oil are most bitterly opposed to increasing the supply.

Drilling for more oil might disturb some animals or birds or fish. Worse yet, on a clear day people with beachfront homes might be able to see an offshore oil rig out on the horizon.

Even those who can’t see oil drilling in some isolated hinterland in Alaska would know the drilling was going on. That would upset their sensitive natures.

So we are left with nothing we can do about the rising demand for oil around the world, nothing we are willing to do about increasing the supply of oil, and angry denunciations of rising oil prices.

The politically correct answer is that we must have “alternative energy sources” and “conservation.” At what cost — in money, in jobs, in constraints on people’s lives — is too crass a question for delicate souls dead-set against producing more oil.

These souls are apparently not so delicate, however, that they are bothered by coal miners killed producing one of those “alternative energy sources” that sound so nice when you don’t count the costs.

Many of the same delicate sensitivities have kept nuclear power plants or hydroelectric dams from being built in the United States for decades. Some in liberal political or media circles talk ominously about the Three Mile Island nuclear power plant “disaster” in which no one was killed, as compared to coal mines, in which lives continue to be lost, year after year.

Meanwhile, the fetishes of a self-congratulatory few, who demonize others as selfish, impose staggering costs on the country as a whole. Facts get nowhere against these fetishes because the fetishes provide a badge of identity for wonderful and special people.

Thomas Sowell is a nationally syndicated columnist.

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