Another Supply and Demand Success Story

Earlier this year when oil was at $150 dollars a barrel, and congress forced oil executives to testify about price-gouging and other nonsense, there was talk of trying to control the price (W. Bush included).  Many of my favorite economists, including Thomas Sowell, explained that supply and demand will (and should) dictate the price.  They explained that with higher prices will come change in behavior and reduced consumption which could lead to lower demand and lower prices – which has happened (though this was not a certainty since much of the demand was from China and India, and verily out of our consumers control).

Well many of us are thankful for the current $60 dollar price of a barrel.  It might be too much to hope that this lesson will be remembered by our leaders next time things get dire, but here’s hoping anyway.

MARK ADDS: Further confirmation that supply and demand are the true forces to be reckoned with.  Now that demand is down, the only way to raise or stabilize prices is to reduce supply.  Thanks OPEC.  Glad you have a near monopoly on that stuff.

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