Friday, July 18, 2008
The government taking more control over futures markets would do nothing to hold down the price of oil or food�in fact, such a move would almost certainly make things worse in the long run. And I am willing to bet that the folks behind Stop Oil Speculation Now KNOW that it would make things worse for consumers.All scarce goods are allocated somehow; in a market system, price serves that function. If you prevent prices from performing that function, something else will. Airlines as rentseekers would be in a position to get government to do it for them.
But they aren�t worried about that. I think they are hoping that getting the government into the oil pricing business will lead to more explicit price controls and supply management, putting their �vital� businesses at the head of the line for cheaper fuel and avoiding the inevitable fuel shortages that price controls would bring.