There was a staggeringly important article on the front page of the Wall Street Journal on Tuesday. Briefly, it said that the immense run up in oil prices in 2008, from roughly $33 a barrel to roughly $150 per barrel was not caused by an oil shortage, was not caused by an immense upsurge in demand from China and India and Brazil, not caused by bandits in Nigeria.
This finding was from President Obama’s Commodity Futures Trading Commission, hardly a mouthpiece of Big Oil.
The staggering 2008 run up in price, which beggared hundreds of millions of people throughout the world, was caused by the sinister machinations of a few dozen oil traders and speculators in the commodity pits and lush offices of hedge funds and investment banks. (Think Goldman, Sachs at its worst.) The shortage, which terrified innocent people and literally killed the U.S. automotive industry, made a few dozen or maybe a few hundred people very rich. It also made the nation believe we actually faced a major oil shortage. (I was briefly taken in before I realized that nothing in the supply demand situation had changed even remotely enough to justify the kind of price moon shot we had been through. When I wrote that the spike was the work of some oil speculators and I knew their names, one of them sent me threatening e-mails.)