OPEC Helps Cure Our Oil Addiction

By John Aloysius Farrell, Thomas Jefferson Street blog.

That is an interesting meeting going on in Algeria today.

Our good friends the Russians are joining our good friends the Saudis and our good friends the Iraqis and our good friends the Iranians and our other good friends in OPEC, seeking to raise the price of oil in the midst of a worldwide recession.

We're down, and they are going to put it to us.

Aside from low interest rates, the low cost of oil was about the best economic news we've been getting these days. Oil that was once $144 a barrel is selling now for $44.

It's helped ease the hurt on consumers, truckers, fishermen, manufacturers, farmers and the travel industry—even cash-strapped local governments—as the price of motor fuels dropped by half. And families up north who heat their homes with oil were breathing a little bit easier at the thought of approaching winter.

As with several other essentials—cars, airplane tickets and mortgages to name a few—a slump in demand was pushing prices down. This is the normal pattern in economics. Unless you belong to a cartel.

At first glance, it may seem like folly. Why would oil producers want to cripple and delay an economic recovery that they need, as much as anyone, to trigger renewed demand? Well, if you're running a petro-dictatorship, and you've got your compliant masses addicted to government subsidies, you don't even think about dipping into your own Swiss bank accounts for cash. You hike the price of oil and make the Europeans and the Chinese and the Americans pay.

It is our own fault, of course, for being addicted in the first place.

There's been concern, as the price of gas sunk down toward a buck a gallon, that Americans would forget the pain of last summer, and drop all the resolutions that we made with our political leaders to break our oil jones once and for all.

The new Obama administration, anxious to encourage green technology and energy independence, must have been worried, or even wavering itself.

And so, since it is the declared policy of this writer to see silver linings in every passing cloud ("Oh the sun will come out, to-morrow...") during this recession, perhaps we should be grateful for our "friends" in OPEC, for the reminder they are sending us.

Think about it. They had us where they wanted us—falling in love again with cheap oil. And now, greedy fools that they are, they re-fuel our resolve.

• Read more by John Aloysius Farrell.
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