A couple of weeks ago, this post noted the news stories about some pundits were floating the theory that the recent slide in energy prices was a dark conspiracy of powerful political forces that were attempting to ensure the victory of the evil capitalist roaders in the upcoming mid-term elections. Bill O’Reilly was probably pleased with these reports.
Subsequently, a week or so ago, Clear Thinkers favorite James Hamilton shot down a similar report that Goldman Sachs was really behind the price decline.
But absurd conspiracy theories do not die easily in American society. Last Friday, this Washington Post article again channels the conspiracy theory, this time pointing toward a new bogeyman, Saudi Arabia:

According to this theory, the Saudi government is doing Bush a favor by trying to bring down prices before the election. The evidence? Some say the Saudi government has a long-standing relationship with the Bush family. They also cite the 2004 book by author and Washington Post assistant managing editor Bob Woodward, “Plan of Attack,” which said that then-Saudi ambassador to the United States, Prince Bandar bin Sultan, promised to keep oil production high enough to moderate fuel prices and bolster the U.S. economy during the presidential election year.

Professor Hamilton dutifully tries to keep up with the latest conspiracy theories:

So let me see if I’ve got this straight– the evidence is that (1) Bob Woodward says that somebody told him that the Saudis made a promise in 2004 and (2) the Saudis could have reduced production by even more than they already have, if they really wanted to keep prices from falling. As for (1), the Saudis have made plenty of promises — publicly, for all the world to see– that came to nothing. And as for (2), what sort of economic theory is this? That the Saudis have been decreasing production over the last year is indisputable. If an even bigger production cut than the Saudis have already made would have been necessary in order to keep prices from falling, doesn’t that prove rather conclusively that the cause of the price drop must be something other than what the Saudis have done?

Meanwhile, following up on a thought from this earlier post, Don Boudreaux over at Cafe Hayek chimes in with the following letter to the editor that responds to an earlier letter by an advocate of the energy price conspiracy:

Dear Editor:
Alleging that today’s falling gasoline prices result from a fiendish plot to keep the GOP in power, Kenneth Jones is certain that “gasoline prices will go right back up to $2.75-plus after the [November] election” (Letters, October 2).
If Mr. Jones is correct, he can make a financial killing. All he need do is to invest all of his assets going long in gasoline futures (which are today about 30 percent lower than they were in late July). Indeed, he ought even to cash out all the equity in his house, max out on his credit cards, and borrow heavily from his brother-in-law so that he can invest as much as possible in these futures.
He can then contribute his post-election financial bounty to the Democratic National Committee.
Sincerely,
Donald J. Boudreaux

Keeping up with nutty conspiracy theories regarding fluctuation in energy prices is a full-time job.