Everyone is freaking out about $5 gas, but the Chicago Tribune has an idea: Take a chill pill, it asserts in an editorial. "All those bad memories of oil soaring to $147 a barrel three years ago tend to crowd out the vague recollection that, oh yeah, prices came tumbling down just as fast." Fear, not supply and demand, is mostly to blame for the rise in oil prices as we worry that the unrest in the Middle East could "threaten the oil production of Saudi Arabia and other nations that pump far more crude than war-torn Libya." We need to squash the impulse to overreact.
It’s frightening to hear the Obama administration discuss the possibility of using our strategic reserves, or the Atlanta Fed President talking about a stimulus to offset rising prices at the pump—both are bad ideas. Yes, if the price really hits $5, it will be "agonizing." But we’re currently "a long way from the levels that would prompt a double-dip recession." Three years ago, "we didn't tap the Strategic Petroleum Reserve. We didn't over-regulate the commodity markets. We didn't declare war on any other country. We didn't open every nook and cranny for drilling. We didn't need to. The market, as it has before, corrected itself. We should give the market a chance to do the same this time."