Senate Oil Manipulation Hearings: Placebo or Incitement?

It’s pretty hard to find an economist who doesn’t scoff at the Senate’s latest hearings on oil price manipulation. But these hearings raise an awkward question for me: Since I’ve praised the gas tax cut (in print and on t.v.) as a placebo that helps placate the masses, I’ve got to wonder: Is it possible that senatorial grandstanding against “gouging” is a placebo too? Perhaps senators can placate the public’s wrath by sneering at a few scapegoats.

It’s possible, but I’m skeptical. The more likely result of denouncing a few scapegoats is to pave the way for harsher measures against a larger body of scapegoats. Attacking oil and hedge fund execs on t.v. might seem cathartic, but I fear that it only makes the public angrier.

I’m still keeping my fingers crossed against price controls and even stranger forms of populist folly. Oh well, I guess in the worst case scenario I can bike to work and tell my students that if they don’t like how I smell, they should blame the public’s economic illiteracy.

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