How many times do we have to explain this one? Over and over nominal conservatives tell us they normally support the free market but concerning oil "the market isn't going to work" and "the market got us here".

First, yes, the market did "get us here", but that is a good thing. What we are seeing is a sudden increase in demand without a commensurate increase in supply, so prices rise. THAT is a good thing. It forces us to examine the uses we made of oil during a relatively low price era and adjust our consumption. If prices didn't rise, we would continue consuming oil at the old rate and shortages would develop. Increasing prices when demand increases is the proper function of the market, it ensures that the most important uses get first shot at the oil, while less important uses get pushed to the back burner.

In other words, if oil prices did not rise, jet skis and electrical generation and ambulances and plastic action figures would all get equal access to oil. With prices rising, people will tend to cut back on jet skis and plastic action figures and oil will be diverted to those uses people think important enough to spend their money supporting. More oil is left for industry and essential travel, less for hobby racing, vacations and plastic knickknacks.

In other words, the market is functioning perfectly. Just because you can't get all the oil you want it doesn't mean the market failed, it means you want more oil than you can afford. That is not a sign the market is failing. Disappointment is a fact of life, not a failure of the market.

The other way this is intended is the theory that somehow there is plenty of oil, yet evil speculators are somehow driving up the market. I dealt with this already. It is paranoia of the first order. Prices are rising because demand rose without an increase in supply, because Mexico's corrupt socialist and aging oil company is producing less efficiently, and because congress continues to cut off oil supplies in the US. And let us not forget the corrupt kleptocratic oligarchs who control the massive supplies in the former Soviet Union. The world demand is simply outstripping supply at the moment, and prices are responding. There is no need to imagine some evil "speculators" who, against all common sense, hope to get rich by buying and never selling. Supply and demand explains it all.

And, as far the market "failing" to push us toward alternate energy sources, the fact is, none are cost effective outside of certain limited areas. Where there is cheap geothermal or wind power, it is in use. Otherwise it is still more expensive than oil or cheap, abundant coal. Consumers make wise decisions, using the easiest and cheapest means available. Because that goes against environmental dogma does not mean the market failed, it just means environmentalism does not outweigh convenience in most people's minds.

So, in summary, the market is working perfectly, it just doesn't care what people's wishes and dreams are unless they are willing to back them with dollars. Some want to call that a failure of the market, but it is really just an unwillingness of the rest of the world to comply with their dictatorial daydreams. The market works fine.

POSTSCRIPT

A related topic is covered in my post "Authoritarian Oil Talk".

UPDATE

In a reply to a comment on this article, I raised one question I cannot answer. I understand why politicians support this lie. It gives them a  villain, evil speculators, and draws attention away from their obstruction of exploration, drilling, new refineries, etc. And by creating a villain, it allows them to do something. They can pass laws against speculators the way they threatened windfall profit taxes when the villain was "big oil". Speculators function for our politicians the way Jews did for the Nazis, capitalists did for the communists, and Snowball did in Animal Farm.

But, I can't explain why anyone else would buy into this. It was not so long ago the script called for the villain to be "big oil", and everyone was buying into that. Are people really so mindless they jump form one lie to another without even recalling the previous lie? And, though it sounds plausible, doesn't even a moment's thought reveal that the villain du jour just makes not sense, even less than "big oil"?

Then again, perhaps people really aren't buying it. After all, I am trusting the press and some TH posters. The press reports what they want to report, and perhaps they buy the speculator excuse, but the average American doesn't. And the TH posters can be explained by being simply those anti-capitalist anti-trade Buchananites and CFR conspiracy nuts who claim to be conservatives while parroting a line not too far from Obama's when it comes to foreign affairs.

Funny. I generally point out such misleading press. Yet, from time to time, even those aware of the biased press sometimes fall for it as well. Kind of a humbling experience, though, being taken in by the MSM.