Speaking of Jeb Hensarling, he has an article up on National Review blasting the “Coaltion To Stop Oil Speculators,” a lobbying effort in Congress which is the brainchild of 12 major airlines.Â Here’s the key paragraph, delivering a dose of economic common sense:
The reality is that commodities investments are not based on finger-in-the-wind guessing; but on analyses of trends in supply and demand. If investors see trends pointing toward increasing world demand (skyrocketing demand from India and China) and constrained supply (restricting exploration for American energy, limiting government procurement of unconventional fuels from North America, and constraining American refinery capacity), they are likely to bet on price escalation. Conversely, an actual increase in supply would cause prices to fall.Â
UPDATE: NR link fixed. Sorry about that.