An economics tutorial on oil prices

In today’s Wall Street Journal, Martin Feldstein provides a simple economics tutorial on oil prices entitled “We Can Lower Oil Prices Now”. Once you read this, you’ll understand why “Any steps that can be taken now to increase the future supply of oil, or reduce the future demand for oil in the U.S. or elsewhere, can therefore lead both to lower prices and increased consumption today.”

Of course, Professor Feldstein’s conjecture directly contradicts claims made recently by certain members of the political class who simply assert (without benefit of any corroborative economic theory and/or evidence) that increased drilling cannot possibly have any such effects; e.g., see “Obama and The Don’t Drill Democrats To America: Don’t Drive. Just Shut Up and Sweat In Your Dark House.”

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