It was good to see, in this week’s congressional inquisition of oil company executives, that Republicans still have among them someone willing to defend markets.
That would be Federal Trade Commission Chairwoman Deborah Platt Majoras, who also testified. She opposed a proposed federal price-gouging law as “an indirect form of control, which would be detrimental.”
Otherwise, the hearing on oil prices and oil company profits represented a dark moment for the party of free markets.
“Most Americans want to know how the price of oil is set,” said Sen. Pete V. Domenici (R-NM), chairman of the Energy and Natural Resources Committee. “Many think that somebody rigs the prices and somebody else is getting ripped off.”
And they’ll continue thinking that way as long as elected leaders able to explain market phenomena resort instead to blame-shifting publicity stunts. Domenici’s committee and the Senate Commerce, Science and Transportation Committee conducted the hearing.
Republicans should know markets set oil prices and be willing to explain the relevant complexities, which aren’t all that difficult, to Americans-forcefully, if necessary.
Testy hearings professing to explore the subject do nothing but sustain reflex “gouging” suspicions. The suspicions, which history discredits, raise unwarranted doubt about market economics and keep the US as a political body from learning anything about energy. The consequent ignorance, subject of Domenici’s timid commentary, produces costly mistakes.
Republicans are supposed to believe in markets. National leaders are supposed to have spines enough to act on their beliefs. The price and profit hearing, prompted as it was by phenomena altogether characteristic of severely strained markets, never should have been held. Lawmakers-especially Republican ones-should challenge antique suspicions directly, explain to those still needing the education how markets work, urge government restraint, and note the inevitability of price declines.
Indeed, even before lawmakers opened their shameful blamefest, oil prices were falling. Just as inevitably, the Republican-controlled House withdrew from a budget bill approval of leasing of the Arctic National Wildlife Refuge coastal plain.
So lawmakers lacking conviction err again on energy. Consumers will pay for their failure, as they are paying now.
(Online Nov. 11, 2005; author’s e-mail: [email protected])
