Sunday, February 22, 2009
In a column about carbon emissions, Ben Stein lances yet another popular conspiracy theory (and without mentioning Bill O'Reilly at all!):
Whenever I pull up to my neighborhood service station in Rancho Mirage, Calif., or anywhere else lately, I have a strange feeling. Because gasoline is so incredibly cheaper than it was just eight months ago, I almost feel as if I am getting something free.
I keep wondering when someone in government will award some kind of stimulus prize to the oil companies for that. After all, by cutting the price of gasoline and other fuels by roughly half, the oil companies are giving consumers hundreds of billions of dollars in new purchasing power for other goods and services. Isn’t that worthy of praise?
What’s that, you say? It isn’t the oil companies? It’s just the free market correcting itself after a huge oil price bubble last year? Well, I agree. But I have a lot of angry e-mail burned into my brain from readers insisting that those high prices were an oil-company conspiracy.
So, are the lower prices now a conspiracy to help the consumer? If that’s silly — and it is — then let’s go back to the free-market explanation. It might actually work. The free market can make us crazy, but it can also explain a lot.
Exactly. But wait, you might say: If there was no conspiracy to drive up gasoline prices, why did oil prices hit $147/bbl in July? Well, why was your house worth 40% more in 2006, or why did Citigroup stock fetch 25 times its current value a mere 20 months ago? Things change quickly in our world. Just because markets are volatile does not mean they are not functioning. The trick is to iron out the costs of volatility by hedging against it in your daily life. I am not suggesting that you trade futures or anything exotic, but it might be time to buy a couple of oil stocks. So, you know, you make a little money the next time gasoline prices go up.