High gas prices induce lunatic "solutions"

Radley Balko observes the rancid combination of political ambition and economic ignorance in action:

Obama's opponent John McCain has smartly opposed a tax on oil company profits — and Obama has promptly attacked him for it.

But McCain isn't much better. McCain has proposed an equally ridiculous "gas tax holiday," which will also do almost nothing to provide relief at the pump. Obama has smartly opposed the idea — and McCain has promptly attacked him for it.

Economic ignorance is nothing new in politics. Neither is the idea that a candidate would perpetuate economic idiocy he knows to be false because it plays into the narrative he's pitching to the voters. But no issue seems to prompt more jaw-dropping sophistry and anti-capitalist demagoguery than gas prices.

Both candidates have promised to crack down on so-called "oil speculators," who are really only commodities traders wagering on whether the price of oil will go up or down. Speculators are an important part of the market process because they're generally knowledgeable about what they're trading, and their collective wisdom sends useful signals about supply and demand. "Cracking down" on speculators is silly. In the first place, it isn't possible. Oil futures are traded all over the world, well outside of U.S. jurisdiction. In the second place, if you own a 401(k), you're likely an indirect "speculator" yourself.

It's totally understandable why politicians are flapping their gums about high prices at the pumps: it's causing the public to feel pain, so they need to harness that for their own ends. Our best hope is that they're just tossing out the rhetorical "something must be done" notions and have no real intention of doing anything if/when elected, because almost nothing they can do will make the situation better . . . and so many of their options would make things worse.