Bush’s friends in the oil industry

* from scotts place, an interview with joe stiglitz:

Stiglitz: When demand rises so does supply — that’s how markets usually work. Now we’re seeing that demand for oil is rising but we’re not getting a commensurate increase in supply. And there’s a simple answer, it’s Iraq. But it’s not just because it production has been down.

SPIEGEL: Why else?

Stiglitz: The Middle East is the lowest cost producer in the world. They can produce oil for $10, $15 or $20 a barrel. Now we have the technology to produce oil elsewhere for $35 to $45. But who wants to develop fields or invest in new technologies elsewhere if they know that in five years’ time, the Middle East may be supplying oil at previous prices?

SPIEGEL: In other words, were peace and stability re-established in the Middle East, the oil price would be back to maybe $25, despite the huge global hunger for energy?

Stiglitz: Yes. By the way that’s the price level oil traders were speculating on in futures trading before the outbreak of war.

SPIEGEL: There should be huge economic pressure on Bush to end this conflict.

Stiglitz: The only people benefiting in this war are Bush’s friends in the oil industry. He has done the American economy and the global economy an enormous disfavor, but his Texan friends couldn’t be happier. The price of oil is up, and they make money when the price of oil goes up. Their profits are at record levels.”"

as i've argued repeatedly, i think that Blinky's oil friends are very happy. i'm not sure they're all from texas.