No matter what Mitt Romney and other Republicans say, there are no easy fixes for rising gas prices. With the national average price hovering near $4 a gallon, Americans are understandably concerned, and President Obama was right to call for more scrutiny of the oil markets.
Mr. Obama made clear that not even the president of the United States can repeal the law of supply and demand. But what federal officials can do is ensure that market manipulation and speculation do not drive gas prices higher than is warranted by economic fundamentals. The question is how to turn the talking points into policy.
Research presented in Congressional testimony, academic papers, government and private studies indicate that excessive speculation, mainly by Wall Street index-fund traders, is needlessly driving up prices, with estimates ranging up to $1 a gallon in inflated gasoline costs. And Mr. Obama called on Congress to increase regulators’ budgets and powers to police the oil markets and to increase penalties for manipulation.
