Saying that high-priced oil isn't a bubble doesn't mean that oil prices will never decline. I wouldn't be shocked if a pullback in demand, driven by delayed effects of high prices, sends the price of crude back below $100 for a while. But it does mean that speculators aren't at the heart of the story. Why, then, do we keep hearing assertions that they are? ... But there's also a political component. Traditionally, denunciations of speculators come from the left of the political spectrum. In the case of oil prices, however, the most vociferous proponents of the view that it's all the speculators' fault have been conservatives -- people whom you wouldn't normally expect to see warning about the nefarious activities of investment banks and hedge funds. The explanation of this seeming paradox is that wishful thinking has trumped pro-market ideology.
Why, then, do we keep hearing assertions that they are?
...
But there's also a political component.
Traditionally, denunciations of speculators come from the left of the political spectrum. In the case of oil prices, however, the most vociferous proponents of the view that it's all the speculators' fault have been conservatives -- people whom you wouldn't normally expect to see warning about the nefarious activities of investment banks and hedge funds.
The explanation of this seeming paradox is that wishful thinking has trumped pro-market ideology.
It's only when conservatives start saying things that they start to matter.
