Gasoline Price Politics

On Cafe Hayek, Don Boudreaux attacks conspiracy theorists under the headline,

Do People REALLY Believe that Gasoline Prices are Manipulated by Powerful Elites?

The AP recently reported that…42 percent of respondents agreed with the statement that the Bush administration “deliberately manipulated the price of gasoline so that it would decrease before this fall’s elections.”

…I suspect that most of these people, including Mr. Jones, really don’t believe what they claim to believe. Here’s a letter I sent yesterday to the Washington Post in response to Mr. Jones’s missive:

Dear Editor:

Alleging that today’s falling gasoline prices result from a fiendish plot to keep the GOP in power, Kenneth Jones is certain that “gasoline prices will go right back up to $2.75-plus after the [November] election” (Letters, October 2).

If Mr. Jones is correct, he can make a financial killing. All he need do is to invest all of his assets going long in gasoline futures (which are today about 30 percent lower than they were in late July). Indeed, he ought even to cash out all the equity in his house, max out on his credit cards, and borrow heavily from his brother-in-law so that he can invest as much as possible in these futures.

He can then contribute his post-election financial bounty to the Democratic National Committee.


Donald J. Boudreaux

Don Boudreaux is right. Who on earth would believe in these stupid conspiracy theories?

Well, here is one person who believes that gasoline prices are manipulated by powerful elites. In a review of Bob Woodward’s State of Denial, the LA Times reports,

During a meeting in the Oval Office, according to Woodward, Bush personally thanked [Saudi Prince] Bandar because the Saudis had flooded the world oil market and kept prices down in the run-up to the 2004 general election.


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