Those apologizing for the greedy oil companies say it's a supply and demand issue, but that's bogus. When you keep the supply down, capitalism flies out the window.
OPEC intentionally keeps the oil harvest as low as it can in order to drive up demand. And here in the USA, oil companies regulate refining capacity, hiding behind the chaotic environmental regulations and a variety of other excuses.
Bottom line: Oil is being artificially marketed, and because we all need oil to live, we must pay what the industry dictates because there is no competition.
Add to this the oil speculators. These are people who buy oil contracts for delivery in the future. Only they don't really want the oil. They want the paper.
Speculators bet that oil prices will go higher, and if they do, they sell the paper to concerns that will actually take the oil. If prices go lower, the speculators lose their money.
But get this. The speculators don't have to pay cash to buy the paper contracts. They use credit, so it is easy to play this Las Vegas-type game.
Now, every time the speculators bid up the paper price of an oil barrel, companies like Shell and Exxon Mobil raise the price of gas at the pump, justifying the increase by pointing to the paper price.
That's why the price of gas is rising so quickly in the USA. Speculators gamble, and big oil goes along for the ride. But when the paper price of oil drops, the pump price often does not because the speculators can always bid the price up again. So the oil companies just wait.
This is obviously a rigged game, and working Americans are getting hurt big time.
Again, OPEC keeps production down, the refineries regulate how much gas they make, and the speculators gamble on credit, driving the paper price of oil up and down.
And we get hosed.
Congressman John Larson of Connecticut has introduced legislation that would, by law, make any speculator who bids on oil actually take delivery of those barrels. Many backyards would then be crowded.
If Congress would pass Larson's bill, the speculators, the gamblers would be forced out of the oil trading industry.
"Talking Points" likes that very much. But Congress has been in the pocket of big oil for decades. So hope is dim.
In the Senate, hearings were held Tuesday on oil speculation. Again, we'll see.
There is no doubt that the U.S. economy is getting hammered by oil prices. Almost every product and service we need is going up in price. Unless Congress gets control of the situation and begins strict oversight, this country will enter a very bad economic period for a very long time.
We can't drill our way out of this. Alternative energy is years away. And if Iran does anything stupid, speculators will double the price of oil from what it is now. We are all at grave risk.
And that's "The Memo."
Pinheads & Patriots
As you may know, PETA, the animal rights people, try to intimidate Americans into not eating meat.
Enter Jessica Simpson. She was recently seen wearing a "Real Girls Eat Meat" shirt, which teed off PETA.
While we respect vegetarians, totalitarianism is not accepted here. For fighting against that, Jessica Simpson is a patriot.
On the pinhead front, Newsweek has really gone off the rails with its far-left posture.
For the third time in recent weeks, it has attacked me, your misunderstood correspondent. Editor Jon Meacham apparently thinks I'm shameless for entitling my upcoming book "A Bold, Fresh Piece of Humanity," even though Meacham hasn't read the book. This is a pure ideological play.
For destroying a once-fine magazine, Meacham is a pinhead. We'll have more on Newsweek in "Reality Check" on Thursday.
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Bill O'Reilly currently serves as the host of FOX News Channel's (FNC) The O'Reilly Factor (weekdays 8PM/ET), the most watched cable news show for the past 13 years. He joined the network in 1996 and is based in New York. Click here for more information on Bill O'Reilly.