Just like Hugo Chavez, Obama is now blaming high gas prices on “speculators”. Is he right about the cause of the high gas prices?

The Heritage Foundation investigates, using studies from the Federal Reserve.

Excerpt:

Yet the allegations of speculators manipulating the market occur every time gas prices rise. They have been investigated numerous times by the Federal Trade Commission and others and found to be without merit, but few critics are ever convinced. Several Federal Reserve studies found no correlation between speculation and the price of any commodity. Yet President Obama remains unconvinced and seems to believe this time the speculators are getting away with something.

In fact, speculators can also help lower costs in the near term, and one way for that to happen is to increase supply, signaling lower future prices. As my colleague David Kreutzer points out, “A better solution is to increase access to new energy sources. If new sources of oil are allowed to be used, futures markets and speculators will lower the future cost of oil, which will translate into lower fuel prices at the pump.”

The reality is oil prices have been rising steadily for a year as the global economy is on the mend and countries are using and demanding more oil. A weak dollar is also playing a role. While “Drill Here, Drill Now” is not a panacea and won’t bring gas prices down dramatically, increasing access to oil reserves in the U.S.—both onshore and offshore—would help offset rising demand, increase jobs, and stimulate the economy. Unlike the President’s solutions of increasing biofuel production and bringing more electric vehicles into the market, drilling can be done without the taxpayer’s help. Subsidizing uneconomic sources of fuel and transportation is a bad deal for the consumer and the taxpayer and will do nothing to offset high gas prices.

Blaming speculators and creating unnecessary task forces is a good way for the Administration to signal it is “doing something” about high gas prices. But the truth is that the federal government is merely diverting attention away from its bad policies.

Obama’s anti-speculator speech is just a way of deflecting the blame to someone else, to make it look like he is doing something. But actually, he is causing the problem, because he is ignorant of the most basic rules of economics.

Director Blue notes that this is exactly the kind of anti-capitalism rant that the communist Hugo Chavez has given in the past – right before the onset of hyperinflation in Venezuela.