With gasoline prices averaging $4.07 a gallon in the U.S., congress is holding yet another hearing on the cause of high oil prices. It’s the fortieth hearing on the topic so far this year, according to the New York Times. If holding 40 hearings without getting an answer isn’t enough to convince you that they won’t get an answer this time either, consider that the featured “expert” speaker at the hearing is Daniel Yergin, the Pulitzer Prize-winning author and the head of Cambridge Energy Research Associates. Yergin has gained fame by repeatedly making incorrect predictions about the price of oil: Three years ago, with oil at $50 a barrel, he predicted it would fall to $40 by 2007 - instead it rose to $57. One year ago, with oil at $70 a barrel, he said it would fall to $60 by the beginning of 2008 – instead it rose to $90.
So what will the Pulitzer prize-winner tell congress this time?
In an interview yesterday about the upcoming hearings, Yergin told reporters that the high price of oil was due to a shortage psychology in the financial markets. We can only hope that Senator Schumer, Chair of Congress’ Joint Economic Committee, will ask him whether this “shortage psychology” is being caused in whole or in part by the oil shortage.
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