Slick money

The free market is working in the oil industry, but not very well. The abundant flow of credit is getting in the way. How should it work? Well, in a smoothly functioning market, a big change in prices is a sign of a big shift in either supply or demand. That was certainly the case for oil in 1974. Arab producers cut their output by 25%. It then took a big price increase to reduce demand to match supply. The oil price went up fourfold and US consumption dropped by 7%. But this time around, ther...