The pain at the pump is going political this week. The President and his wannabe successors are pushing pie-in-the-sky proposals--more drilling in Alaska (Bush), gas tax holidays (McCain) and new taxes on oil companies (Obama)--but Congress is taking aim at one of the underlying reasons for skyrocketing prices--speculation.
"(A)s gas reaches a national average of $4 a gallon for the first time in the nation’s history," reports The Hill, "some see the makings of a consensus on Capital Hill: making it harder for investors to buy crude on the commodity futures markets.
"Critics say the increased participation of non-commercial investors that don’t intend to use the commodity--as opposed to, say, airlines that also buy crude--has helped raise prices."
The focus of Congressional pressure is the government agency charged with overseeing the gambling on oil. According to a spokesman for the Senate Energy and Natural Resources Committee, “More and more senators are questioning the adequacy of the [Commodity Futures Trading Commission’s (CFTC)] regulatory oversight and...are bothered by the role that speculation and non-commercial, institutional investors are having in preventing energy markets from functioning properly.”
The quickest fix would be new curbs on pension funds, endowments and other institutional investors that pump money into commodities index funds, driving up demand and prices. The Goldman Sachs fund attracted $260 billion last year, compared to $13 billion five years earlier.
According to the McClatchy newspapers, complicating any effort to harness speculation is the 30 percent of trading in crude oil in "dark areas"--markets in London and Dubai--not regulated by the CFTC but could be by the President with "a snap of his fingers."
A former CFTC director of trading is quoted as saying, "Essentially this could be ended this afternoon if the Bush administration had the stomach to do it."
But with an army of oil company lobbyists besieging the White House and Congress, don't bet your gas money that it will happen.
Showing posts with label rising food and gas prices. Show all posts
Showing posts with label rising food and gas prices. Show all posts
Tuesday, June 10, 2008
Saturday, May 17, 2008
Abandoning Bush
The rush to get off the S.S. Bush turned into a stampede this week as John McCain, Congressional Republicans and even the Saudis headed for the lifeboats.
King Abdullah, who used to hold his hand, gave Bush the royal finger when asked to pump more oil to ease gas prices.
John McCain backed away from the Imperial Presidency, not only by promising to emulate British prime ministers and regularly going to both houses of Congress to answer questions but also, as a New York Times editorial put it:
"McCain said, if elected, he will...work in 'concerted action' with other nations to counter the nuclear threats of Iran and North Korea; and eliminate a tax meant for the rich that is crushing the upper-middle class. He promised to not 'subvert the purpose of legislation,' as Mr. Bush has done, with signing statements."
Meanwhile, Congressional Republicans were jumping ship by joining Democrats in ignoring Bush's veto threats with lopsided votes to boost food stamps and farm subsidies and to order the Administration to stop pouring oil into the nation's emergency reserves.
Over vocal White House opposition, 35 of 49 Senate Republicans voted with Democrats to pass a $290 billion farm bill to increase food aid for the needy. A hundred House Republicans had voted the same way after the party's third straight loss of a long-held GOP seat on Tuesday.
After seeing the results of Dick Cheney's help in that special election, Congressional Republicans have a sinking feeling about November. If George W. Bush is looking for friends until then, he will have to turn to his dog Barney.
King Abdullah, who used to hold his hand, gave Bush the royal finger when asked to pump more oil to ease gas prices.
John McCain backed away from the Imperial Presidency, not only by promising to emulate British prime ministers and regularly going to both houses of Congress to answer questions but also, as a New York Times editorial put it:
"McCain said, if elected, he will...work in 'concerted action' with other nations to counter the nuclear threats of Iran and North Korea; and eliminate a tax meant for the rich that is crushing the upper-middle class. He promised to not 'subvert the purpose of legislation,' as Mr. Bush has done, with signing statements."
Meanwhile, Congressional Republicans were jumping ship by joining Democrats in ignoring Bush's veto threats with lopsided votes to boost food stamps and farm subsidies and to order the Administration to stop pouring oil into the nation's emergency reserves.
Over vocal White House opposition, 35 of 49 Senate Republicans voted with Democrats to pass a $290 billion farm bill to increase food aid for the needy. A hundred House Republicans had voted the same way after the party's third straight loss of a long-held GOP seat on Tuesday.
After seeing the results of Dick Cheney's help in that special election, Congressional Republicans have a sinking feeling about November. If George W. Bush is looking for friends until then, he will have to turn to his dog Barney.
Tuesday, April 15, 2008
Recession Rolls On
As Americans mail in tax returns and wait for their economic stimulus checks, they will find fewer places to spend the money when it arrives. Retail chains are closing stores and going out of business in the face of declining sales and mounting debt, the New York Times reports:
"Since last fall, eight mostly midsize chains--as diverse as the furniture store Levitz and the electronics seller Sharper Image--have filed for bankruptcy protection...
"But the troubles are quickly spreading to bigger national companies, like Linens ‘n Things, the bedding and furniture retailer with 500 stores in 47 states...
"Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said it would close 140 stores, Ann Taylor will start to shutter 117 and the jeweler Zales will close 100."
As food prices rise at a record rate and gasoline prices keep climbing, they crowd out other purchases--people are spending less on furniture, clothing and electronics. As jobs disappear in these contracting companies, the recession may worsen and snowball beyond the pathetic efforts of a clueless Congress and President to affect them.
Meanwhile, billions of American dollars keep disappearing into the sinkhole of Iraqi corruption. At least business is booming at banks in Switzerland and the Cayman Islands.
"Since last fall, eight mostly midsize chains--as diverse as the furniture store Levitz and the electronics seller Sharper Image--have filed for bankruptcy protection...
"But the troubles are quickly spreading to bigger national companies, like Linens ‘n Things, the bedding and furniture retailer with 500 stores in 47 states...
"Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said it would close 140 stores, Ann Taylor will start to shutter 117 and the jeweler Zales will close 100."
As food prices rise at a record rate and gasoline prices keep climbing, they crowd out other purchases--people are spending less on furniture, clothing and electronics. As jobs disappear in these contracting companies, the recession may worsen and snowball beyond the pathetic efforts of a clueless Congress and President to affect them.
Meanwhile, billions of American dollars keep disappearing into the sinkhole of Iraqi corruption. At least business is booming at banks in Switzerland and the Cayman Islands.
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