Quote of the day

Suppose the dollar were still at parity with the Euro, as it was on 11/23/2002 (actually 1.0030, but who's counting?). In that case, a dollar would buy you (1/.6451)=1.55 times as much. So a gallon of gas would be only $2.667. Whatever way you slice it, though, the effect of the exchange rate on the price of gas turns out to be enormous. Our present search for scapegoats is deeply misguided, but a few people really are personally responsible for the high price of gas. Contrary to popular opinion, though, they aren't CEOs in the oil industry; they're the leaders of the Federal Reserve System. It's easy to point fingers; but sometimes finger-pointing is right on target.--Bryan Caplan

UPDATE: Arnold Kling has a nice response:

The fact that the depreciation of the dollar caused some of the increase in the dollar price of oil is correct. However, I tend to shy away from Fed-bashing. The problem is that the Fed has only one instrument (intervention in the short-term money market), and in the economy there are many targets. Anybody can blame the Fed for missing target X. But to be useful, such a criticism has to say what other targets the Fed would have missed had it hit target X.