With gasoline prices falling, shouldn't Congress be singing Big Oil's praises?

Driving yesterday past the gasoline station where I usually buy fuel, I noticed that the price of the lowest grade of unleaded — the one I buy — was down to $2.09 per gallon. Registering this perception as a little piece of good news in an unhappy world, I drove on.

Later, however, I began to mull over the altogether unsurprising fact that, to my knowledge, Congress has held no televised hearings to look into the tremendous fall in fuel prices since last summer, when I paid more than $4.00 per gallon for a while. Oil company executives have not been summoned to Washington so that they can be applauded for sloughing off the greed that (allegedly) impelled them to charge so much for their products in June and July. No member of Congress has apologized for calling the businessmen there last spring to berate and threaten them while angrily mouthing sentiments that can only be described as idiotic.

These congressional show trials, which are held whenever gasoline prices rise substantially, always adhere to a tight protocol and a traditional script for each of the actors. Members of Congress huff and puff, demand to know how much the executives are earning, threaten new taxes and controls, and  suggest ominously that the government may have to take over the companies unless something gives. Company executives do not laugh at these antics or dismiss them as the foolishness they are, but rather respond in solemn seriousness, explaining how changes in supply and demand have brought about the price increases.

Yeah,  yeah, supply and demand. Isn't that just the sort of excuse you'd expect a robber baron, caught red-handed, to invoke?

It's no wonder the public always believes that conspiracies among the companies explain the high prices, and hence that the public supports government action to whip the conspirators into line or to impose price controls. It's a perfect match: ignorant (and immoral) members of the public and ignorant (and immoral) members of Congress to represent them in Washington. We are witnessing democracy in action. As H. L. Mencken said, "votes are collared under democracy, not by talking sense but by talking nonsense."

I first became aware of this moronic charade back in the 1970s, during the first "energy crisis." William E. Simon, whom Nixon appointed to be the "energy czar" at that time, later gave a hilarious account of it in his book A Time for Truth (1978). Simon described "the demogoguery that is often unleashed at these hearings and is a gross caricature of the process of seeking information." He illustrated his claim by reproducing the transcript of an exchange he had at one of the hearings with Congressman Joe McDade, who was certainly among the most corrupt members in the history of the corrupt House of Representatives. Read it (on pp. 62-64) and weep. "I knew," wrote Simon, "I was faced with an economic illiterate or with a political hypocrisy so great that it stunned me."

I challenge you, however, to read the transcript of the hearings the House conducted to bully the oil company executives as recently as last spring and reach a conclusion any different from Simon's.

In his book, Simon noted "the compulsion in a dominantly liberal Congress to believe any rumor, however baseless, from any source, however absurd, which suggested that the shortage was 'unreal,' a product of a vicious oil company plot, and the compulsion to 'demagogue' whenever the red light of the television camera lit up."

The more things change . . ..

Republished with permission of the Independent Institute.