Writing in The Corner, Larry Kudlow continues to make his case supply-side economic principles rule the price we pay at the pumps. Kudlow point to another $3 drop in the price of a barrel of oil as evidence. His reasoning is supported by the fact that just talking about increasing the supply of oil has caused prices to drop – again. Says Kudlow:

Isn’t it funny that news reports this morning showing that Sen. Harry Reid will in fact allow a drill, drill, drill amendment to come to the Senate floor seem to have triggered a $3 drop in oil to less than $122 a barrel. Is this a coincidence? I don’t think so. More like cause-and-effect.

Oil traders aren’t stupid. There are a dozen Democrats in the Senate who will vote for drilling, and that means future energy supplies will rise. Coupled with falling oil demand, especially by motorists, that means lower prices. Even unleaded gas futures are now dropping to less than $3 a gallon. Add in a buck for local and state taxes on average, and pump prices will drop to under $4 a gallon.

So I guess those horrible oil speculators are not so horrible anymore. Since President Bush launched his drilling-moratorium offensive oil prices are down almost $30.

But Kudlow goes further and speaks to the potential in a winning issue for John McCain and the republicans in November.

Even in the House, where Nancy Pelosi wants to save the planet, political pressures are building for a series of votes to expand drilling. Republicans are now linking Obama to Pelosi and Reid as the cause of high oil prices and the economic downturn. This is good politics and good economics.

Republicans in congress are not budging on what are at-best half measure stop gaps and it is unlikely any legislation will pass before the August recess. Democrats won’t be able to demagogue here as they have in the past as many of their MSM allies are off the kool-aid about drilling. So McCain and the republicans will have their issue and one which they can easily take to the voters.

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