Another jump in oil prices.

Think it has anything to do with the fact that both presidential candidates favor a hidden tax on energy and oppose expanding domestic oil production?

You know, in the past, when I’ve said that prices in this range are not sustainable, I always assumed that, at least at some point, sanity would reign in Washington. What a dumb assumption.

[Thursday morning update]

Wise words from Lileks:

…there’s hope. An article in the paper last week said that the gyrations in the oil market may indicate that the laws of supply and demand no longer apply. Well, clever us, to live in an age where immutable laws are abolished with ease; no doubt faster-than-light travel is now possible as well. Whenever someone says that the old laws no longer apply, it’s a sure sign that the laws are about to reassert themselves with brutal force.

Three-buck gas by October? Likely.

As Carl notes in comments, even when you know you’re in a bubble, you don’t know when it’s going to pop.

[Update a few minutes later]

Four-dollar gasbags:

Anyone wondering why U.S. energy policy is so dysfunctional need only review Congress’s recent antics. Members have debated ideas ranging from suing OPEC to the Senate’s carbon tax-and-regulation monstrosity, to a windfall profits tax on oil companies, to new punishments for “price gouging” – everything except expanding domestic energy supplies.

Amid $135 oil, it ought to be an easy, bipartisan victory to lift the political restrictions on energy exploration and production. Record-high fuel costs are hitting consumers and business like a huge tax increase. Yet the U.S. remains one of the only countries in the world that chooses as a matter of policy to lock up its natural resources. The Chinese think we’re insane and self-destructive, while the Saudis laugh all the way to the bank.

And unfortunately, both presidential candidates are economic ignorami:

Recent weeks have seen some GOP stirrings on Capitol Hill, but John McCain has so far refused to jettison his green posturings, such as his belief in carbon caps and his animus against offshore development. A good reason for a rethink would be $4 gas. At present, it is charitable to call Mr. McCain’s energy ideas incoherent, and it may cost him the election.

Of course, Obama’s even worse, but even if McCain wins, it will be a lot closer than it need be. And prices will continue to soar. Needlessly.

No, even the premise was crazy:

While the premise of the 55mph speed limit was a perfectly valid one, the effectiveness of the rule was debatable. There is certainly no doubt that driving at a lower speed would consume less energy. The problem lies in the fact that the national 55mph speed limit was perhaps the most universally ignored law in history apart from prohibition.

Just what was it about the premise that was “valid”? That if everyone drove fifty five instead of seventy that it would save gas? Well, I guess. But so what? Why fifty five? Why not fifty? Why not forty five?

I have never seen any kind of quantitative analysis that provided a rationale for any particular speed limit (at least one designed to save gas and lives). What’s magic about the double nickel? (In this regard, it is subject to the same reductio ad absurdum as the minimum wage). Hey, I have an idea that would save a lot of gasoline. Let’s ban cars, motorcycles and trucks from the highways. Don’t allow anything on them with an internal combustion engine. That would solve the problem. And it makes just as much sense as an arbitrary federal speed limit. The only difference is that the absurdity of the proposal is much more obvious.

Despite their lack of analysis, proponents also claimed that arbitrarily capping legal speeds at fifty five promoted “safety.” The only rationale for this notion basically boiled down to “speed kills,” which is a pithy phrase, marred only by the fact that it doesn’t correspond to empirical reality. Even ignoring the very real fact that there was no significant increase in traffic fatalities after the idiotic law was repealed in the nineties (in fact, I think they went down), it doesn’t take into account the fact that time is money. If truckers followed the law, it would add a day to a cross-country trip, which means a day’s delay in the delivery of needed goods, and either more cost for the driver’s time, if he’s paid by the hour, or a cut in his profits if he’s paid by the mile. If a long-distance commuter did so, it might add fifteen or twenty minutes each way. He might have to get up earlier, so the extra time spent behind the wheel might come out of sleep time, thus increasing the possibility of an accident due to drowsiness. Also, slower speed means longer trip times, which might mean driving later into the night to get to the same destination, again increasing the chance of drifting off.

At four dollars a gallon, if gas is really saved at fifty-five, there is plenty of incentive for individual people to slow down on their own, if it makes sense to do so overall. But they’re in a position to make the trade off in a way that no legislator in Washington can ever be. We had a couple of decades in which to experiment with this foolish notion, and it was found wanting. Like Prohibition, let’s leave it in the dustbin of history.

One other point. I remember when the Republicans won the Congress back in 1994. I had some hope that there would be at least some rollback from a lot of the statist nuttiness that had been accumulating since The New Deal and The Great Society. Those hopes were mostly forlorn, with the rare exception of welfare reform, and George Bush has put the final nails in the coffin of the Gingrich revolution. But one other rare exception was the repeal of the fifty-five speed limit. If that particular bit of idiocy is reinstated, I’ll really feel that it was all for naught.