History's Fall Guys
Given the media and government-directed hostility toward "speculators," many people will want proof that they are innocent. Well, for the scapegoat-seeking masses, there's the following inconvenient truth: If oil were being withheld from the market by speculators, said oil would physically have to be somewhere other than on the open market where it is being sold and bought. And yet crude inventories have remained roughly constant since 1998. If someone were hoarding oil, we would have seen a spike in crude inventories.
If we can't scapegoat "speculators" for $4 a gallon gas, who can we blame? For those who really need to find a villain in this affair, there is good news and bad news. The bad news is that one of the principal causes of high gas prices will be familiar to anyone who took an introductory economics class-supply is relatively low (not to mention relatively inelastic), while demand is relatively high. That means higher prices.
But blaming the whole thing on Adam Smith's invisible hand obviously serves no political purpose. That brings us to the good news for the politicians in the audience-the other principal cause of $4 a gallon gas is the weak dollar. Because how the dollar gets strong or weak is understood even more poorly than what "speculators" do, a crafty politician can blame pretty much anyone he wants.