Economics

Save Oil Speculation Now!

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Oh no! Not our families!

I wasn't alone in my impotent ink-stained fury over the Stop Oil Speculation Now! website. Normally when an industry creates a write-your-congressman-today rent-seeking front group, they usually try play down their own self-interested agenda, or at least conceal their role in funding the campaign. Oddly, the airlines slapped their names all over the bid to stop everyone else from speculating on the price of oil, even as they carried on with their own fuel hedges.

A competing site has sprung up tearing down the airlines' spin on the oil speculation issue. It's called, with a certain literalmindedness these kinds of sites tend to have in common: The Airline Oil Spin.

While airlines rail against the negative impact of speculating commodity traders on oil prices, it is often overlooked that airlines themselves engage in a form of oil speculation that has been vital to their survival: fuel hedging.

By speculating on the future cost of jet fuel, some airlines have managed to save billions of dollars in potential fuel costs. It seems that airlines are now trying to have it both ways, by condemning the "bad" speculators (the commodity traders) and ignoring the "good" speculators (themselves).

This site has its own non sequitur agenda as well, something about passengers' and workers' rights, which pops up when you click a link that somewhat deceptively suggests that you'll be emailing your congressman in defense of speculators. But at least on the speculation issue, their grasp of economics is slightly better than the gang at Stop Oil Speculation Now!