John Tamny at National Review Online talks about why oil prices are so high. He notes that the price is a function not only of increased demand but even more importantly, the falling value of the dollar. Since the barrel price of oil is pegged to the dollar, oil producers' profits suffer when the value of the dollar sags. In order to keep their profit margins up as the worth of the dollar sinks, producers charge more for the oil they sell.
Tamny asserts that the problem actually began back in the 70's when President Nixon took the dollar off the gold standard and set it afloat, a point that Bill () has emphasized in his posts here at Viewpoint on numerous occasions.
This last assertion is interesting. If it's true that shortfalls in oil availability are not the consequence of limited supply in the ground, then they're obviously the result of factors like manipulation of supply or, less insidiously, limited drilling or refining capabilities. We haven't built a new refinery in twenty years in this country, and we're told that our present capacity can't keep up with the demand. We might ask our profit besotted oil executives why they haven't plowed some of their enormous cash harvests from the last two decades back into production enhancement. Or is that a silly question?