Obama and others (including my congressman, George Miller) make the inane argument that offshore drilling would take 20 to 30 years to impact oil prices. On the other hand, they say that costs skyrocket mainly to fuel “speculators” (actually investors, their politically charged word). They say about anything that they think will work to calm especially the undecided voters who likely vote their pocketbook. The high gas prices hurt the Democratic largest demographic more than any people group and they must convince them that gas prices are higher, not because of government regulation, a barrier to oil production built by the Democratic party and their inseparable relationship to radical environmentalists, but because of greedy rich Wall Street “speculators,” who are actually Republicans. We will see if this line coming from the Democratic presidential candidate, his party, and his surrogates will work on the American people. It isn’t true.

You actually can’t have it both ways. When people “speculate” about, that is, invest in oil, they must determine what the oil prices will be based on supply and demand. If we aren’t doing more drilling and refining of oil, then the prices are bound to go up. If we escalate the process of oil production, investors will see the future increased supply and see the price of oil going down. Some bidders will “speculate” cheaper oil prices and the dollar amounts of bids will decrease. The reality of drilling will lower gas at the pump.

A former Reagan economist makes this point about commodities, including oil, in this week’s Wall Street Journal.