Attacking The "Greed" Meme

Cafe Hayek's Don Boudreaux has a hilarious post today that challenges the absurd notion that rising gasoline prices indicate nothing more than oil executives' "greed."

The price of 87-octane gasoline here in southern Maryland has been $2.09 for almost two weeks now, and this relative consistency is no surprise to people like me and many others who understand that prices fluctuate with supply and demand.

Incidentally, one term that I've heard thrown around a lot down here is "normal" - i.e., that prices have returned to "normal." This is inaccurate. All prices are normal so long as they are determined by market forces (as opposed to extraneous factors such as government-induced price controls). After Hurricane Katrina, a cost of $3.39 per gallon of gas was no less normal than $2.09 is now, now that the volatility caused by the instant reduction in refining capacity has been stabilized.

Alas, it's unlikely that this will be acknowledged anytime soon by talking heads in the media or other critics of private enterprise. Just today Roger Friedman pens a review of George Clooney's new movie "Syriana," which, if a recent trailer is any indication, is certain to be an eye-roller for anyone not of the Michael Moore mold. Indeed, as Friedman writes:

[T]he actors are so uniformly good from the start that they all seem very real, as does the situation. This is "Fahrenheit 411," meaning full of urgent information that rings true in every scene. Liberals and conservatives all have to put gas in their cars. One look at the prices, and you know that "Syriana" is not far off base.

It should be telling that Friedman has acknowledged similarities to Moore's "Fahrenheit 9/11," which to anyone but die-hard leftists was nothing but a propaganda piece due to such widespread absence of contextualization. If I remember correctly, the "Syriana" trailer asks its potential audience to imagine what it would be like to have to pay $20 a gallon for gas. Whether this is a major theme of the movie or an underhanded jab at "greedy" oil companies is beyond me; I think I'll be passing on this movie.

If Roger Friedman really thinks current gas prices are so absurd, it's no surprise that he thinks "Syriana" isn't too far off base. But as much as I'm inclined to disagree with his assessment, this movie probably isn't even as off base as Friedman's understanding of economics.