The Nation's Pulse

Stop the Scapegoating

Oil companies do not set oil prices.

By 5.9.06

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There is something profoundly disturbing about the national craze to blame the oil companies for higher gasoline prices. It's not disturbing that people are upset about having to pay hugely more for gasoline and oil products. It's not disturbing that they are looking for someone to blame. The disturbing part is that we as a nation and as a government are blaming entities that have absolutely nothing or next to nothing to do with causing the high oil prices. It is as if we just arbitrarily decided that all left-handed people were to blame for the oil prices. That's how crazy it is.

Oil companies do not set oil prices. Oil prices are set on gigantic world markets by young millionaire hedge fund traders, by university endowments speculating in commodities, by Chinese importers seeking new sources of oil for their red hot economy, by India doing the same thing, by us Americans needing cars to make us feel big and tough.

The American oil companies pay these high prices by and large, add in the costs of refining and transporting, tack on the taxes we need to build our roads, and then sell us our gasoline. We in turn suck it down our throats and zoom around in our big huge cars as if gasoline were still $1.50 a gallon.

Yes, some of the oil the oil companies sell is in fields they bought years ago and paid a lot less per barrel for than today's prices. When the price of oil skyrockets, the oil companies make money. Lots of money. But this is how corporations are supposed to work: when prices for things they already own go up, they make money. They're not charities and we wouldn't be able to drive for long if they were. And the money the companies make goes to the shareholders, which is basically everyone in the nation with a pension plan, and most of the rest goes to find new oil for us to guzzle down in our 500-horsepower chariots of the future.

Where's the harm? There's no price fixing. There's no stealing. There are just a lot of traders getting very rich driving up the price of oil and a lot of legitimate forces making buyers willing to pay it.

You may not like it and I certainly hate paying four bucks a gallon at my local station in Malibu. But blaming the oil companies is pure scapegoating. Immense world-wide forces are at work. Immense markets are at work. The oil companies are corks in the ocean compared with those forces.

By all means, let's conserve. By all means, let's drill off the coast of Malibu. It would give me some pretty lights to look at by night. Let's also use ethanol and used cooking oil. But let's get something straight. We won't solve a single thing by blaming the wrong people for the problem. Seeing things plain is the first step to salvation. It's high time to stop blaming the messenger -- the oil companies -- and the first step to seeing things plain.

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About the Author

Ben Stein is a writer, actor, economist, and lawyer living in Beverly Hills and Malibu. He writes "Ben Stein's Diary" for every issue of The American Spectator.