Economics and Government

You should remember that earlier this semester we talked about Bill O'Reilly's analysis of gas price increases following Katrina. You may also have noticed that our fearless leaders in Congress are still talking about "windfall profits," while the prices you are paying for a gallon of gasoline have fallen significantly of late. Well, apparently O'Reilly is still holding to his earlier analysis. Here is a transcript of O'Reilly recently in a conversation with Neil Cavuto:

"CAVUTO: Okay. Gas prices are down a lot. Why do you think that is?


O’REILLY: Because they’re afraid they’ll go to jail. And those C.E.O.s who manipulated them–

CAVUTO: Why are you sure that they manipulated them?

O’REILLY: I have guys that are inside the five major oil companies - my father used to work for one of those oil companies, by the way - who have told me that in those meetings they look for every way to jack up oil prices after Katrina, every way. When they didn’t have to. And they got scared because in my reporting and some other reporting, they said –

CAVUTO: Wait, you’re taking credit for gas prices being down?

O’REILLY: My reporting and reporting of others.

CAVUTO: Has nothing to do with refineries that came back online or the crisis calmed after the hurricanes?

O’REILLY: The demand for oil in this country is the same now as it was one day after Hurricane Katrina. It’s the same. Selling the same amount of gas and oil.

CAVUTO: But the supply has increased, right?

O’REILLY: The supply has increased? Who knows.

CAVUTO: And it’s traded like a stock, correct?

O’REILLY: It’s traded by speculation, and the bottom line is they were afraid of a federal investigation and they said–

CAVUTO: I think you’re crazy, but you're right on the Christmas, but wrong on this."

Hasn't O'Reilly often mentioned his masters degree in public policy from the Harvard Kennedy School of Government? I've got to ask what sort of school of public policy neglects to have their students learn Econ 101?