The economics of oil

Thomas Sowell provides us a lesson in the economics of oil.

After hurricane Katrina destroyed a lot of oil processing capacity around the Gulf of Mexico, there was -- surprise! -- less oil being processed. With less oil being supplied -- surprise again! -- gasoline prices rose.

However much economists rely on supply and demand to explain price movements, politicians need villains, so that the pols can play hero. Big Oil is a favorite villain and has been for decades.

He also talks about taxes:

It so happens that Big Government takes more money in taxes out of a gallon of gas than Big Oil takes out in profits. But apparently somehow taxes don't raise prices. They certainly don't raise indignation from the politicians who voted for those taxes.

There's more. Recommended.