Promoted by Steven D

As John Amato points out over at C&L today, the GOP battle plan on politically exploiting $135+ oil and a $4 national average on gas is simple.

Suddenly, it’s all our fault because we won’t let them drill in the Arctic National Refuge. We’ll be hearing a lot more on that topic as the general election goes forward.

You see, it’s the Democrats’ fault.  If we had drilled in ANWR back in 2000 when Bush took over, why, oil would be where it was in 2000 still, yes?
The average consumer hears this and is convinced.  He knows he has to blame SOMEBODY for a tank of gas running three times what it was in 2001, but he’s not sure who the problem is.

The GOP says the problem is simple supply and demand.  They couldn’t be further from the truth.  Why the Democrats aren’t educating the public on the real culprit — a massive speculation bubble created by the GOP refusing to regulate the industry — I do not know.

There is no logical supply and demand reason for oil being $135 a barrel.  That’s because oil has passed beyond the boundaries of logic into bubble territory.  Bubbles are created when prices inflate artificially.  The artificial pressure in this case is a hedge against the plummeting US dollar, and billions in investment dollars pouring into oil as the dollar itself becomes increasingly worthless.

Supply and demand have nothing to do with the price of oil right now.  That’s the definition of a bubble: the commodity in question, dot-com stocks, housing, oil, do not follow logical rules of supply and demand anymore.

To say that more supply will fix the problem is ludicrous.  Taking the speculators out of the game would certainly lower the price of oil, but the GOP is beholden to the energy companies, and the President and Vice-President are especially beholden.

This is Bush’s true legacy, oil going from $25 a barrel to $150 during his two terms in office.  A recent investigation into the practice has largely drawn little notice.

Federal regulators — in a highly unusual move — revealed Thursday they have been conducting a wide-reaching probe into oil trading practices for the last six months.

And in response to growing concerns about the role speculators may be playing in driving up oil prices, the Commodity Futures Trading Commission said it will require energy traders to begin providing more information so the government can better assess what effect they may be having on the markets.

“Perhaps the CFTC has gotten some religion,” said Michael Masters, of Masters Capital Management LLC, who has called for tighter regulation. Although, he added, “it’s just a start.”

With oil futures diving more than $4 Thursday, the commission went public about its probe. It is examining the purchase, transportation, storage and trading of crude oil and futures contracts — agreements to buy or sell commodities at a later date that are central to the energy markets.

The agency provided no other details about the investigation.

“Although the commission ordinarily conducts enforcement investigations on a confidential basis, the commission is taking the extraordinary step of disclosing this investigation because of today’s unprecedented market conditions,” agency officials said in a prepared statement.

This issue should be the finishing blow to the GOP in this country, but only if the Democrats are willing to go after Big Oil on this issue.

Many of them are not.  And because of that, you’re paying the price for their record hundreds of billions in profits.

2009 is going to be a disaster.  Who do you want in the White House and Congress when the need to fix the problem can no longer be put off?

Be prepared.