Tuesday, September 19, 2006

Conspiracy theories trump economics

My husband had predicted that it wouldn't take long for people to start blaming the drop in gas prices on the Republicans' manipulating the market. And sure enough, as he indicates, CNN's Bill Schneider was quickly out the door floating that story.

Now that prices are coming down, the media is noticing the drop. USA Today has a story on how the average price is now below $2.50 a gallon and some gas stations are even starting price wars to lower their prices. However, they also show a Gallup poll result to show that conspiracy crazies have not given up blaming everything on those evil Republicans.
A hefty 42% of Americans polled over the weekend said they think fuel prices are being manipulated by the Bush administration to help Republicans in an election year. The USA TODAY/Gallup Poll has a margin of error of 3 percentage points.
USA Today is quick to report that this is just malarkey.
Petroleum analysts say the reasons are less Machiavellian: Supplies are above average, partly because summer's high prices attracted record imports. Hurricanes haven't knocked out Gulf of Mexico production. U.S. regulations permit a cheaper-to-make fuel blend in fall and winter.

“Without a shadow of a doubt, there is not any manipulation, and it has nothing to do with the approaching election,” says Peter Beutel, head of energy-price consultant Cameron Hanover. The petroleum market is “too big a market to manipulate. The price just … could not sustain itself.”
It just goes to show how ignorant of simple economic principles the mass of the American people are. And of simple logic. If the Republicans had such massive powers over the market price, why would they have allowed it to go up so sharply the past 12 months. Undoubtedly, those high prices contributed to the funk and anti-incumbent mood that many voters seemed to have been in. Why couldn't the Republicans have waved their wizard wands and kept the prices low in the first place? Of course, if the media and irresponsible politicians hadn't spread the word in the first place that there was some evil cabal behind the price increase in the first place, perhaps people wouldn't be so ready to believe the Republicans were behind every fluctuation. But then that wouldn't suit the blame Republicans for everything.