April 22, 2012

Regarding the April 18 Business story “Obama targets oil and gas speculators with new penalties”:

The Obama administration is proposing to penalize behavior that every first-year economics student knows has a useful social purpose. When prices are predicted to rise tomorrow, speculation raises prices and leads to compensating behaviors today: Consumers are encouraged to use less, thus stretching out supplies and suppliers are encouraged to produce more. Our national policies should not ignore basic economics.

Dan Levine, Arlington