For a while this week, the nightly news could have been "That
Ď70s Show," as consumers griped about skyrocketing oil and gasoline
prices, and TV journalists wondered what the Democrat in the White
House would do to fix the situation.
Itís not 1979, of course. For one thing, oil prices finally were
completely de-regulated in January 1981, shortly after President
Ronald Reagan took office. That means that even if it wanted to, the
federal government couldnít tell oil companies how much they can
charge, although there are a variety of indirect ways the government
can influence oil and gas prices.
And measured in constant dollars, crude oil prices are only about
half as high as they were at their peak twenty years ago, which
makes the current spike in prices more of an inconvenience than a
even if the facts were different, many of the stories could have
been identical, as network reporters interviewed disgruntled
customers and flocked to regulators and other government officials
to deal with the situation.
On February 15, NBCís Mike Jensen told Nightly News
viewers that "gasoline prices that averaged 90 cents a gallon a year
ago [are] today $1.36, the highest in almost 10 years. Some experts
predicting an additional twenty-cent increase by summer, if crude
oil prices donít come down.... All this a potential threat to the
economy. Higher oil prices could set off a wave of inflation,
President Clinton concerned."
After showing a clip of President Clinton promising action
("Thereís going to be some important meetings with the oil-producing
countries in the next few days"), Jensen showed "angry motorists"
and "consumer advocate" Wenonah Hauter, who asserted that "the real
winners are the big oil companies and the people selling oil and gas
products." Hauter works for Public Citizen, a Naderite group that
was not identified as liberal by Jensen.
The next night, "politicians were scrambling to respond to cries
from the Northeast, where higher prices and lower temperatures have
tripled bills for people like Helen and Albert Masciocchi,"
according to CBSís Jeffrey Kofman on the Evening News.
According to Mr. Masciocchi, because of the higher prices, the
elderly couple had been forced to choose between cutting back on
their food, prescription drugs, or their home heating oil.
"Energy Secretary Bill Richardson admitted that everyone was
caught off guard," Kofman continued before quoting Richardson at a
meeting with angry Boston consumers.
"I think states were unprepared, the government was unprepared,
the industry was unprepared," Richardson said. "Everybody was
Unmentioned by any network was the fact that Richardson had
welcomed OPECís decision to slash production last spring, a move
which led to depleted inventories and higher prices this winter.
"We feel that lower oil prices are good for consumers, but we
recognize they can have a negative impact domestically and on some
of our friends like Venezuela and Mexico," Energy Secretary Bill
Richardson told the New York Times last March. "So far,
OPEC's response has been responsible and restrained."
In September, according to The Oil Daily, an industry
newsletter, former Saudi Arabian Oil Minister Sheikh Ahmed Zaki
Yamani told a Houston conference that Richardson had actually
encouraged the price hike by persuading the Saudis to cut their
production by 600,000 barrels per day. However, an Energy Department
spokesperson told The Oil Daily that "Secretary Richardson
believes that market forces should dictate oil prices."
In an election year, thereís never a shortage of politicians
eager to use consumersí misfortune to score a public relations point
-- and from the journalistís perspective itís easier to interview a
government official than it is to explain the laws of supply and
demand. But the mediaís tendency to put the onus on government
officials during exceptional economic times undermines the notion
that free markets, not further government intervention, offer the
best assurance of long-term stability and prosperity.
One action that government could take that would help consumers
would be to lower or eliminate excise taxes on gasoline, which keeps
prices artificially high. According to Americans for Tax Reform,
federal and state excise taxes amount to an average of 37.7 cents
per gallon of gas, or about a fourth of the total price. Connecticut
Governor John Rowland, in fact, is urging a seven-cent cut in his
stateís notoriously high gas taxes.
But if you watched the evening news this week, the most-talked
about idea was for the federal government to sell off a portion of
the U.S. strategic petroleum reserve. Amid all of the alarmism at
the networks, ABCís Bob Jamieson uniquely reminded viewers of
Wednesdayís World News Tonight that, "the politicians may
have forgotten that the oil [that forms the nationís strategic
reserves] is stored in salt domes along the Gulf Coast. It must
first be pumped out, then shipped to refineries, and there processed
into heating oil, something that couldnít happen before the end of