This is a rush transcript of "Special Report With Brit Hume" from June 24, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

SEN. SUSAN COLLINS, (R) MAINE: Massive new holdings of oils future contracts by pension funds, university endowments, and other institutional investors, who neither produce nor take delivery of oil, also appear to be driving up prices.

JAMES NEWSOME, NEW YORK MERCANTILE EXCHANGE CEO: We believe that the case has not yet been made to support a finding that institutional investors are contributing to the high prices of crude oil. It would be premature to adopt a legislative solution for an unproven and unsubstantiated problem.

(END VIDEO CLIP)

BRIT HUME, HOST: A funny thing seems to have happened to Congress on the way to legislating against investment in oil futures contracts, the so-called speculation in energy prices that, it is argued by some, has been driving up prices.

It turns out some of these evil speculators are people like the California Public Employees Pension Fund and other pension funds that are holding assets for the benefit of retired people across the country.

It also turns out that the argument about whether pension funds or other investors in the futures markets are really driving up price is, well, not as settled as some observers think.

Some thoughts on this now from Fred Barnes, the Executive Editor of The Weekly Standard, Mort Kondracke, Executive Editor of Roll Call, and the syndicated columnist Charles Krauthammer, FOX News contributors all.

Congress is having another go at legislating something that will bring down the price of energy. When it comes to the futures market, Fred, is Congress on the right track, or what?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: This is another dry hole, like those 68 million acres that the oil companies have leased and are not looking for oil in even though the price is the highest it has ever been in the world.

Look, I'm glad Senator Collins said it appears that these speculators have something to do with driving up the price, because there is certainly no evidence of that happening.

And all you have to do is look at way the futures market works. Now, they call it the "futures market" for a reason. People are betting on the price of oil or other commodities five years from now or beyond. And it is a gamble. The way it works is —

HUME: They are putting money at risk.

BARNES: Sure, you do.

Look what happened earlier this month when the stories first came out that the Israelis had had a huge military maneuver that looked like they were getting ready for an attack on Iran. And what happened — oil shot way up. It shot up $15 a barrel, or something, in a day.

And the reason was very simple — because the futures market looks around and sees whether the places where oil may be accessible to drilling of oil and gas, whether they're restricted, whether they're shrinking. And in that case, they think, gee, look, if the Israelis do that, there will be a whole war in the Middle East, and we really will have a shrunken oil market. So they were trying to lock in higher prices, assuming those would be lower than the higher it got.

Now, what happened? On the other hand, and this is happening right now, if you think the price of oil is going to go down, the Saudis are putting more oil on the market, and there are other things as well, then you bid it down. You think, gee, I have these futures for $160 barrel oil or something like that. They're worthless now. I don't want that because the price is going down.

So they buy it and they go low, because they think, particularly, if the United States were opening up all these brand new places for oil exploration, then they think the price will go down in five years, I'm going to go low.

So they play it both ways. They don't drive the market either way. They follow what they think is going to happen.

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: Supply and demand.

You know, the fact is that there is not enough supply, and there is constantly increasing demand in the world for this oil, and, as Fred said, every once in a while the market gets scared because they think that there won't be enough oil around, and that drives the price up more. But that is a marginal thing, a fluctuation thing.

The U.S. Energy Information Agency, which is a straightforward reporting agency, explains the high price of oil because of supply and demand. And it does not attribute it to the speculation.

And the speculators buy futures. They don't buy oil. They don't buy real oil. Nobody is hoarding oil because — or very few people are hoarding oil, because they use up everything that they get. So it is a supply and demand thing by all the evidence, not speculation.

We should be increasing supply in order to drive the price down.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: In its search for scapegoats, the Congress seems unable to understand what the futures markets are for. It's a place where risk is traded. If you're an airline or a trucker, and you want to know what the price of oil will be in a year or two, because it fluctuates, you buy a contract so that you don't have a risk.

There's somebody at the other end with a lot of money, who can gamble, who purchases that risk. So one side is acquiring certainty, and the other is acquiring a risk and making a profit, but with a risk that he can actually lose if the prices decline.

The minute you intervene in the markets, as the Democrats, or a few Republicans as well, want to do in the Congress, you create situations in which people will not be able to unload risk who need it and want to, which is insane. That's why you have these markets, and liquidity will dry up.

I think the Congress are being unreasonable pikers here. If you want to bring down the price of oil, you do, as you suggested at the top of the show — abolish the law of supply and demand.

HUME: Or repeal it. Who passed that law anyway?

KRAUTHAMMER: With an exemption, which I'm sure Democrats would insist, on those making less than $20,000 a year.

The House will pass a law repealing the law of supply. The Senate will give us a law repealing the law of demand, and they'll get it together in conference and with a majority. I'm sure that the president will not override it. He will stand.

HUME: He will veto it? It could be overridden. If that happens, folks, you will find out about it first here.

We he will take a break — when we come back, what's going on in Zimbabwe. The presidential candidate, the opposition candidate, has withdrawn, apparently afraid for his life. There has been all kinds of slaughter. Do we care about this in America? Coming up next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, SECRETARY OF STATE FOR THE UNITED STATES OF AMERICA: We in the international community yesterday with the U.N. Security Council called on the government of Zimbabwe to stop the violence against the opposition, to give the Zimbabwean people a chance to form a decent government that would be a legitimate government and would represent them all.

ROBERT MUGABE, ZIMBABWEAN PRESIDENT: They can shout as loud as they like from Washington or London, or from any other quarter. Our people, our people, only our people will decide.

(END VIDEO CLIP)

HUME: So there you see it, Robert Mugabe. What a great guy. He just wants the people of his country, Zimbabwe, who have done so well under his regime to decide who they want to be the president next.

Of course, the field is narrowed. It's down to one candidate, and he's it, because the opposition leader, Morgan Tsvangirai, has withdrawn from the race and taken refuge in the Dutch embassy, which seems like a peculiar thing to do if the people are going to decide, but that's what he did.

What about this whole situation? The administration, Charles, has not done much but certainly shows a lot of interest in this country. What has happening here?

KRAUTHAMMER: We have issued a strong statement, the Security Council has issued a weak statement. The Europeans are deploring it, and editorialists all over America are saying the man must go.

HUME: Mugabe?

KRAUTHAMMER: Mugabe must go. Mugabe has declared that only god will remove me, and god appears otherwise occupied.

But the history of the last quarter century tells us that god has one agent on us when it comes to ridding the world of dictators and ending their degradations, and that is the United States. No one else acts.

Who was it who liberated — who stopped the slaughters of the Serbians in the Balkans? It was the United States after the U.N. had obstructed and the EU did nothing. Who liberated Kuwait? Who liberated Afghanistan? Who tried a liberation of Somalia and failed.

And who liberated Iraq from a dictator who killed hundreds of times more people than Mugabe and who constructed an apparatus of murder and terror that makes Zimbabwe look like a picnic. It was Iraq which we liberated.

And what happened? We earned the opprobrium of the world, the scorn of the Europeans. And the Bush administration has earned the opprobrium of the liberal and foreign policy establishments in the United States.

If anybody is serious about the suffering in Zimbabwe or Burma or Sudan, all these conferences and sanctions will achieve absolutely nothing. If you are serious, it will require military action, and that will require the United States.

But after our experience in Iraq, we are going to think twice.

KONDRACKE: Look, we didn't go into Rwanda. I think that fundamentally the establishment of the United States and most of the people in the United States do not want to go to the rescue, ultimately, of any African country. I don't know whether it is racism.

HUME: Is that a race thing?

KONDRACKE: Probably race and probably there are no resources involved, and we don't have the connection —

HUME: So there's no oil, we won't —

KONDRACKE: And we think that they're backward, a hopeless continent, and stuff like that

HUME: That's interesting, but let me ask this question — which United States interest are engaged in Zimbabwe?

KONDRACKE: There are none.

HUME: Could that be the reason why people —

KONDRACKE: Of course, that is part of it. And so it is not going to happen.

The only way that this is going to happen — we didn't invade South Africa when it was an apartheid government. The only way something will happen here is for the South Africans, actually, to treat Zimbabwe the way the rest of the world treated South Africa when it was an apartheid regime, to basically cut it off, make sure that Mugabe and his henchmen get no commerce directly.

It's got to be sanctioned, and stuff like that. But the South Africans won't do it, and that's the problem.

BARNES: It's not going to work anyway.

What I laughed when I heard it after this non-binding, watered- down resolution was passed by the U.N., the British ambassador to the U.N. said he found it incredible that Mugabe would thumb his nose at that. He thought it was incredible.

I didn't think it was incredible. I bet nobody here thought it was incredible.

HUME: They thought it was natural.

BARNES: That's natural.

Mugabe has been doing this stuff — Mugabe is not a newcomer to the scene doing this stuff. He has made brought economy and made it a basket case and killed all kinds of people, and this is par for the course for him.

HUME: That is it for the panel,

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