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.

Obama is now saying that he wants to cut subsidies to oil companies (H/T Lonely Conservative), which will just increase their costs for extracting and processing oil. They will pass those costs directly on to the consumer. Obama will then blame the oil companies, even though he is the cause of the higher costs in the first place.

Excerpt:

The White House has sent officials to the G20 summit in Seol, South Korea and part of the message those officials are carrying from the PResident is a promise to join “joint efforts to phase out fossil fuel subsidies.”

But, what subsidies to fossil fuels get? Mostly tax breaks, which are hardly subsidies at all. Letting people or companies keep more of their own money isn’t “subsidy.” It’s tax relief. America’s policies amount to tax breaks aimed at driving capital investment in the energy markets, and frankly these sort of tax breaks are available to a lot of industries.

[…]What’s going on here is a bit of sleight-of-hand. Obama and other world leaders are talking about “ending subsidies” for fossil fuels. What they really mean is raising taxes on fossil fuels so that the so-called “green energy” projects they’re all so drippy about are more competitive in world energy markets.

What this means for you and me is higher energy prices and, by extension, a higher cost of living across our entire economy as those higher energy prices translate into higher prices for goods and services (everyone has to pay their power/fuel bills).

And it won’t just be the taxes adding to our expenses. If higher taxes drive more fossil fuel producers out of the market (and that’s clearly the goal here), they will be replaced by much more expensive and much less reliable “green energy” producers. That, again, means a bigger hit to the wallets of Americans.

Meanwhile, this report concludes that cumulative US subsidies of biofuels could reach $1 trillion over the next two decades. And that’s just biofuels, not other initiatives like wind power or solar power.

In summary, these people want to hamstring cheap, reliable fossil fuels in order to promote heavily-subsidized, expensive, unreliable green power.

Next time, don’t vote for a Marxist community organizer to be President. Pick someone who actually has run a business and met payroll.

UPDATE: A commenter adds:

What the President is talking about when he mentions oil “subsidies” is not a “subsidy,” it’s fair accounting. The primary “subsidy” is the oil depletion allowance, which is simply proper accounting for depleting in-ground assets.

The oil depletion allowance is nothing more than how the oil company computes how much an oil well decreases in total value when they pump oil out of it. There’s a finite amount of oil in a well, but the total amount is really an estimate. When it drills the well, the oil company declares what the oil in the ground is worth. When it pumps the oil out of the ground, the company takes a “depletion allowance” to account for the reduced value of the oil in the ground, and subtracts that value from their profits, thus reducing the amount of profit they have to declare for tax purposes. This is no different from, say, a paper company subtracting the cost of the logs they used in making paper from the profit they earned selling the paper. It’s calculated something like depreciation because the actual amount of the oil in a well is impossible to measure.

What’s happening is that the President, in an attempt to create demons that his dupes can hate, is deliberately misleading people into thinking that oil companies get special treatment. Just using the word “subsidy” regarding the depletion allowance is a lie, plain and simple. Worse, even: it’s defamation, and a declaration that the government really owns everything.