In 2005, as the price of a gallon of gas soared to $2.50 and beyond, Capitol Hill started talking about price manipulation, and why we were "subsidizing oil companies earning record profits." Responding to a price per gallon that many of us would gladly pay today, Hawaii slapped a price cap on gasoline, the only state to so succumb to temptation.

Here we go again.

As polls increasingly show that Americans blame the President for rising gas prices, the White House's resident Hawaiian seems to be launching his own crusade against oil profits. On Thursday, President Obama sicced Attorney General Eric Holder on the industry, demanding an investigation into "any cases of fraud or manipulation in the oil markets." Neither Holder nor Obama cited any cases of actual fraud. Holder even acknowledged "there are lawful reasons for increases in gas prices, given supply and demand."

Still, according to the President: "The big five oil companies over the last five years, the least they've made in profits is $75 billion. The most they've made is $125 billion." I had difficulty verifying those numbers -- but what is true is impressive enough.

Over the time period Obama mentioned, ExxonMobil (NYSE: XOM) alone earned $175 billion. The other four weren't hurting, either. Royal Dutch Shell (NYSE: RDS-A) earned $115 billion, Chevron (NYSE: CVX) $89 billion, BP (NYSE: BP) $78 billion -- even after Deepwater Horizon -- and ConocoPhillips (NYSE: COP) $26 billion.

As gas prices surge to $4 and beyond in 2011, are we set for a repeat? Airlines are already reinstituting fuel surcharges on ticket sales, while auto industry pundits worry that high gas prices will depress high-margin truck sales at Ford (NYSE: F) and General Motors (NYSE: GM). Consumers are getting pinched, and times seem ripe for a demagogic attack on the folks profiting from it.

It's the economics, stupid
However, absent proof to the contrary -- which the FTC disclaimed in 2005, and for which neither the Prez nor the AG have as of yet provided any evidence -- there's no reason to assume manipulation. The supply-and-demand factors that Holder cites explain much of the rise in price. Trouble in Libya has curtailed oil exports from that country. Meanwhile, economic growth here and abroad is increasing demand. Those factors combine to raise oil prices -- no fraud or manipulation required. 

Another factor Holder avoids mentioning also plays a part. Internationally, oil is priced in dollars. Here in the U.S., we've been printing dollars like mad, shrinking the value of the greenback. So of course oil sellers want more dollars for each barrel of black gold they sell us. And of course, that makes gas more expensive.

It's not "fraud," Mr. President. It's economics.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.