When oil prices surged to a ridiculous $147 a barrel in the summer of 2008, conventional wisdom held that normal supply and demand issues were the cause. Both the Bush administration (in the form of the Commodity Futures Trading Commission) and most of Wall Street (through both media figures and market analysts) blamed such factors as increases in oil demand from the Chinese industrial machine, and the failure of Americans to conserve, for the surge in crude prices.Matt Taibbi goes on to provide more details. Read the whole article.
Goldman Sachs, while outrageously predicting a "super spike" that might cause oil to reach as high as $200 a barrel, blamed piggish American consumers and preached conservation as a bulwark against oil supply disruptions. The bank's "Oracle of Oil," Arjun Murti, even broadcast the fact that he owned two hybrid cars.
Well, thanks to Wikileaks, we now know that when the Bush administration reached out to the Saudis in the summer of '08 to ask them to increase oil production to lower prices, the Saudis responded by saying they were having a hard time finding buyers for their oil as it was, and instead asked the Bush administration to rein in Wall Street speculators.
I'm guessing the current price spike is just another "manipulation of the market". The good news is that the US has anti-trust laws that stop this illegal manipulation of the market. So don't hold your breath. I'm sure that Obama will sick the Justice Department out there to investigate all those Wall Street firms (think Goldman Sachs) that are milking the market. I'm sure the feds are eager to put the squeeze on Obama's main political backers, you know, the ones who provide lots of campaign "donations". Obama is just as eager as the Republicans before him to stop this illegal behaviour because the politicians in Washington hold their duty to the American citizen as their highest duty, their solemn obligation, way up there... almost as high as their obligation to keep their business buddies who provide the soft funds and under the table money happy.
The wonderful thing is that America has finally rid itself of the ugly side of democracy, where you have to go out and meet & greet people, make promises to the electorate, and actually serve as a "representative". They've streamlined this into a one-stop shopping service for the ultra-rich who simply buy and sell politicians. No fuss, no worry.