If you watched Keith Olbermann last night, you would know how to get the gas prices to drop 50 percent. The solution is also found in the hearings held in early June 2008.

Isn't there a small problem of enforcement here? Let's suppose the U.S. sues OPEC (what's the venue? Some U.S. District Court?) and wins.

Who's gonna make OPEC pay up? I very much doubt Saudi Arabia et al will pay billions to the U.S. just because some U.S. judge orders them to. Or are we planning to seize assets?

There must be something I'm missing here, because otherwise, this all just seems like a lot of pointless talk.

Actually, the arguments for treating OPEC as an illegal cartel are pretty good. It's just that both the politicians (particularly those named Bush) and the oil companies feel we're better off (or at least they're better off) playing footsie with OPEC rather than dealing with them at arm's length. Since we've been playing footsie with them for the past 60 years with pretty good results, the odds are that we'll keep it up, particularly in light of the recent developments in Iraq. As an Exxon shareholder, I gotta smile.*

*I don't know if I'm really an Exxon shareholder, but it's likely.

Our support for the Ruling classes in the OPEC nations IS the number one Al Queda recruiting tool to date. Do a little research for Pete's sake.

I'm not about to read the article, but let me guess it could be summarized as follows:

"Scary brown people are sitting on OUR oil!"

I find it amazing that many people think the oil fields in the Middle East somehow belong to Americans - God's chosen people.

Ooops, WAS the number one tool, then our own ruling class tool invaded Iraq.

Imagine criminal charges filed against key cartel individuals when they come to the U.S. And imagine Justice Department officials compelling OPEC and its co-conspirators to disclose documents that might bring to light exactly how this cartel has functioned. Might this information show a relationship between OPEC and U.S. oil companies?

Here's how I imagine one OPEC nation might eventually respond. (Not really, but you never know.) Imagine criminal charges filed against key American military, government, and corporate individuals when they come to Iraq. And imagine Iraqi Justice Department officials compelling these individuals and their co-conspirators to disclose documents that might bring to light exactly how their organizations have functioned.

Hmm. . .

Given that we don't really think much of international court (let alone our courts) the only option is to convert a tanker in mid-ocean to a jail/courthouse, extraordinarily rendern OPEC ministers to the tanker, waterboard them into a settlement, and then get them to pay us in the then worthless US paper dollar. Sounds about right to me.

Then comes the next suit against China and India who have the gall to try to industrialize to the use levels close to ours. How dare they bid up the price of our oil!

1. Denial: "This is just temporary. Gas prices will fall back to $1.50 a gallon soon."
2. Anger: "OPEC, Chevron, and oil speculators [add others]are greedy bastards who are artificially driving up the price of oil! We should sue/invade/regulate..."
3. Bargaining: "OK, maybe we could just open up some parts of ANWR and the coasts. I'll get a smaller SUV. Maybe we could burn corn or how about this algae thing, that sounds cool. Just let me keep driving 3 blocks for a Slushee."
4. Depression: "I loved my SUV. This SMART car hurts my ego. How could this happen to me?! I might as well become a vegetarian and start shopping at the farmer's market with the hippies :("
5. Acceptance: ...too far away I'm afraid...

Can Iraq sue W. Bush?

The Sherman Antitrust Act doesn't apply for foriegn governments, both because they are foriegn, and because they are governments.

And OPEC is no more an illegal conspiracy in restraint of trade than NAFTA, or the EU, or the United States of America.

There's a similar op-ed the NYT today. I saw the headline, thought, "whatever", and moved on. The authors may be deluded into thinking this is a viable strategy in the real world, but trust me, the editors at the NYT and LAT are not so deluded. This is all about the entertainment value of these op-eds and nothing more. It's truly sad that this is all the popular press has left.

Leaving aside the legal issues, the idea itself is simply dumb. OPEC does not need to sell us the oil directly, and they do not need to invest any proceeds in the US, and they won't if there is any danger of confiscation. Also, they don't even need to take dollars in exchange for oil. Anyone who supports the idea is a complete idiot.

Actually demand in the US has dropped 1.4% in Q1-2008 [due to high prices] and refinery output hss risen 1.5%.

There are no lines at the gas station to buy fuel.

With the relative cost of energy now near or exceeding levels seen during the 1980 oil crisis, it finally appears that the economy is crying “uncle.� When crude oil prices have risen to over 90% year-over-year (YOY), the economy has crumbled every time. The economy buckled in 1973, 1980, and 2000 when crude rose more than 90% YOY, a level breached two weeks ago as crude oil is currently up 96% YOY.
http://www.financialsense.com/Market/wrapup.htm

I, respectfully disagree that speculators are a small part of the problem, but about half of the problem of high prices. Nearly every commodity has shot up since the subprime crash and devaluation [40%] of the dollar as investors seek safe investments in commodities.

Please read www.Juancole.com, "Wednesday, June 18, 2008, John McCain's Oil Scam" to have a better idea of what OPEC can/cannot do to relieve prices.

Take a little time to read up on the Enron Loophole, ie, unregulated commodities trading (very simplestic article can be found at http://jimhightower.com/node/6514 )for why current pricing has very little to do with supply/demand.

And for one of the "by the oil industry for the oil industry" books to give you a better understanding of the fact that OPEC's money stays in the US banking system .. it basically floats our dollar ... I would recommend "The Color of Oil: The History, the Money and the Politics of the World's Biggest Business" by Michael Economides & Ronald Oligney.

All of these are short fast reads. Well the book is 220 pages, but for a oil industry view of the history of the industry and it not being in technical language I consider it a short fast read. It is the one I normally loan out.

Then come back and argue this topic.

I started reading the NYT piece to my husband on the way to work today, but stopped because it was just too silly. Aside from the many other good points already raised, the argument was that cartels are illegal under US law. And OPEC is subject to US law in what universe?

I don't think the member nations of OPEC would regard any ruling by a US court as legitimate in any way if it purported to rule them liable for exercising their sovereign powers over their own resources. Indeed, I think they would view it as naked piracy or even as an act of war. Now, the US may be powerful enough to throw its weight around like that; indeed, we could always send aircraft carriers to Saudi Arabia or Venezuela to collect on the judgment. Is that what you all want?

Sue OPEC??? How September 10th!! Let's just BOMB' em!

Wait... Did we try that already? Are we friendly with most of them??? I'm confused.

Actually, Mark Thoma, I think, makes a really good point. Assuming OPEC exercises monopoly control, that doesn't explain the price of oil or gas. OPEC has been here all along, and oil has gone from $50 to $140 a barrel. It's monopoly power hasn't changed the price, that's a product of increased demand and stagnant supply.

Kevin raises good criticisms.

The authors of both the NYT and LAT pieces miss another key point here. The case of OPEC is not comparable to the case of lysine or computer chips. In these markets, where control is achieved via ownership of the dominant share of production facilities, and competition is impeded by the delay and capital requirements of making new facilities, and by the knowledge of potential competitors that the cartel could then ruin them by bringing prices back down, antitrust enforcement serves the cause of economic efficiency.

I believe these conditions do not apply in the oil market, and there is no reason to believe that production restraint that keeps the price at $130 (and I am inclined to agree that there is no good reason to believe that production is now restrained) impedes economic efficiency.

In the absence of an economic-efficiency argument, complaining about price-fixing is just whining.

By pretending that the oil problem is caused solely by a greedy cartel (takes one to know one?), these people can ignore the real cause: booming demand and stable or shrinking supplies.

Antitrust legislation does not apply to industries which a state- any state- decides to nationalize. Are these law professors going to be consistent and say that antitrust legislation applies to any and all industries which a state decides to nationalize? Does that mean I can sue, say, the American government for not allowing free market competition in air traffic control services? Or force the Canadians government to break up its national highway system "monopoly?" The last five centuries of international legal practice have, for better or worse, allowed states to take over companies or industries if those states find it in their interest to do so, and then to run those industries in any way they choose.

Kevin is completely wrong when he says "OPEC members are pumping at full capacity and prices are skyrocketing anyway." The largest and most powerful member of OPEC is Saudi Arabia and it is pumping less today than it was two years ago; in addition, there is a lot of credible evidence that it can pump a tremendous amount more than it is now pumping--see Ray Learsy's article on today's Huffington Post. Kevin needs to go back and review the history of OPEC's and particularly the Saudis' behavior during the 1970s and 1980s. The lesson of that era is that the so called oil shortage of the time (that led to hour long waits on lines to get gas) was bogus, and when the world responded to OPEC price gouging with energy conservation, fuel standards, much higher mileage standards in automobiles, etc., etc., the price of oil dropped from $40/bbl to about $12/bbl, and stayed there for a couple of decades, until the Bush/Cheney crowd took over.

There is no oil shortage, there is only a lack of political will.

Yeah this is a truly great idea. Let's look at some additional fallout you didn't mention:

(a) The US can refuse to buy OPEC oil. That'll make them suffer! I'm sure the Chinese and Europeans have no interest in signing long term deals that will make up the difference.

(b) The US can threaten the various OPEC countries, which will persuade them that it might be a good idea to get their money out of treasuries and into Yen and Euros. While this might be great for the US in the long run, forcing us to finally confront our debt, I imagine it will not be pleasant in the short run.

The larger issue is what has the world come to when three supposed academics view the world through lenses so disconnected with reality that this sort of nonsense is considered worth proposing? It's the sort of stupidity you'd expected to hear in a low-end bar among some advanced drunks.

Or to put things slightly differently, the US has tried mightily to create a world in which power (including economic power) is all that matters. Not law, not common sense, not human rights, not decency; only power.

But when it comes to oil the US has ZERO economic power. There are plenty of other people willing to buy it; there are plenty of other safe havens for oil money.

The US has created its bed; it will now have to lie in it.