Of Oil and Onions

The demagogues in Congress, mostly Dems, are poised to string up eeevil speculators for high gas prices, rather than approve drilling where the oil is in America. WSJ:

Congress always needs a political villain, but few are more undeserving. Futures trading merely allows market participants to determine the best estimate – based on available information like supply and demand and the rate of inflation – of what the real price of oil will be on the delivery date of the contracts. Such a basic price discovery mechanism lets major energy consumers hedge against volatility. Still, "speculators" always end up tied to the whipping post when people get upset about price swings.

As it happens, though, there's a useful case-study in the relationship between futures markets and commodity prices: onions. Congress might want to brush up on the results of its prior antispeculation mania before it causes more trouble.

So instead of more regulation of commodities, how about lifting the regs on one--onions. In the meantime, this year I planted some in my garden. As my own hedge against inflation. Sadly, I didn't strike oil when I dug deep.