Tuesday, April 25, 2006

The Fox Is Guarding the Henhouse

In the wake of recent oil industry profits and recent gasoline price increases, President Bush has ordered an inquiry.


April 25 (Bloomberg) -- President George W. Bush has ordered the Justice Department to look for possible manipulation of gasoline prices and announced he is halting deposits to the nation's strategic oil reserve in response to rising prices.

``The first thing to do is to make sure Americans are treated fairly at the gas pump,'' Bush said. ``This administration is not going to tolerate manipulation.''

Well, okay, perhaps the administration will tolerate some manipulation. But not
too much.


"The prices that people are paying at the gas pump reflect our addiction to oil," he said in an address to an industry group in Washington.

No, George, the prices that people are paying at the gas pump reflect the depth
to which the oil industry is essentially involved in the operations of our government. This "inquiry" is merely theater for the masses, a shocking assertion, I know.


The oil industry is one of the biggest donors to Republican election campaigns. In 2004, the industry gave 80 percent of its $26 million in campaign donations to Republican candidates, including $2.6 million to Bush. That was the Republicans' biggest share in at least a decade, according to the Center for Responsive Politics, a Washington-based research group. In 2005, the industry gave 84 percent of $7 million to the Republicans, and the top 20 congressional recipients of the industry's giving were all Republicans.

Ah, the appearance of actually doing something.

U.S. Attorney General Alberto Gonzales and FTC chief Deborah Platt Majoras today sent letters to state attorneys general pledging cooperation on investigations and saying the agencies ``have substantially increased our efforts at the federal level to monitor, detect, pursue and prevent any violations of the law in this industry.''

The FTC will send a final report to Congress by May 19 on whether businesses have manipulated gasoline markets and prices.

Here is one reaction.

Past investigations of priced gouging have ``come to the same conclusion, the industry is reasonably competitive and the explanation for price
increases lies in other causes,'' said Bert Foer, president of the American Antitrust Institute. ``The prospect of either agency at this time coming in with a report that blames the industry strikes me as fairly low.''

Fairly low or not at all? Hmm.

But this is encouraging.


Spitzer blames President Bush for rising gas prices

ALBANY, N.Y. -- Democrat Eliot Spitzer on Monday said he's investigating whether oil producers are price gouging and blamed Republican President Bush for rising prices at the pump.

"This is, once again, demonstrative of the complete failure of energy policy that we have seen out of Washington over the last five years and, frankly, it goes back farther than that," said Spitzer, a candidate for governor.

Spitzer said he is investigating recent price increases by the complicated
"vertically integrated" oil companies that drill, refine, distribute and sell gas retail. Spitzer announced his investigation as gas prices become a more prominent political issue. Crude-oil prices hit record highs in recent weeks and average gasoline prices nationwide neared $3 a gallon.

"We have to go through that analysis to see whether increased costs are any
rationale for those increased prices," Spitzer said.

I wish Attorney General Spitzer the best of luck.


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