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Wednesday, September 07, 2005

Oil Prices vs. Agricultural Commodity Prices

While driving yesterday, I came across a Senate hearing where they were grilling some official of the CFTC (the Commodity Futures Trading Commission). There was the usual noise about gas and oil prices being too high and about "speculators").

I mentioned this to a former colleague of mine who was a fairly highly placed economist at the CFTC some years back. He made an interesting observation - politicians make noise when oil and gas prices are too high, but they also squawk when corn, wheat, or other agricultural commodity prices go too low. It all depends on who their constituency is.

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