Hensarling: Don’t Let Airlines Play The Victim Card

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. 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. 

UPDATE: NR link fixed. Sorry about that.

Newsletter

Get a weekly recap in your inbox every Sunday of our best stories from the week plus a primer for the days ahead.

Find It

Search our directories for...

Restaurants

Restaurants

Bars

Bars

Events

Events

Attractions

Attractions

View All

View All

Comments

7 responses to “Hensarling: Don’t Let Airlines Play The Victim Card”

  1. Ed says:

    You can’t assume common sense will carry any weight to those predisposed to a contrary belief.

  2. Doug says:

    Your link is wrong, it goes to the Heritage Foundation, not National Review.

  3. j.d.w... says:

    “an actual increase in supply would cause prices to fall. ”

    …as would a decrease in demand…

  4. Chris says:

    Another look at the issue:

    http://www.reason.com/news/show/127738.html

    Apparently, when airlines buy oil futures on a bet that the prices will eventually go up, it’s good business practice, but when people who don’t happen to be the treasurers of airlines do the same thing, it’s “rampant speculation” that “upsets the natural relationship between supply and demand.”

  5. amanda says:

    I think we should plan to drill ANWR…just announcing it will drive prices down. Consumers will eventually adapt to other modes of transportation, but it will take 50 or so years.

    The president’s speech was, when? Two weeks ago? And we’ve dropped 20 cents since.

    The perception we are become independent either through new technologies or natural reserves will help the consumer.

    Southwest Airlines = Brilliant.

  6. Wick Allison says:

    Amanda, prices started to fall when GWB decided to negotiate with Iran instead of going to war with it.

  7. amanda says:

    Wick, did it? B/c of Iran alone? Or did the market top out? Or, or, or…

    Sure, tensions abound in the Mid East, but when in the last 500 years haven’t they? The market gets the jitters over speculation (like Iran), but when since Ferdinand and Isabella did a reson NOT exist for similar turmoil, war and worry?

    I think we need both conservation and excavation, and let the market be.