Retraction

I’ve said that there isn’t anything we can do to bring gasoline prices down in the near future.  I was wrong.
 
According to the Washington Post a few oil traders controlled 81% of the oil futures market driving prices up artificially to profit from exchanges that had nothing to do with the delivery of oil or fuel.  “It is now evident that speculators in the energy futures markets play a much larger role than previously thought, and it is now even harder to accept the agency’s laughable assertion that excessive speculation has not contributed to rising energy prices,” said Rep. John D. Dingell (D-Mich.). He added that it was “difficult to comprehend how the CFTC would allow a trader” to acquire such a large oil inventory “and not scrutinize this position any sooner.”
 
How did this happen?  A little thing called the Commodity Futures Modernization Act of 2000, a little amendment slipped into a 2000 spending bill by Phil Gramm.  It became known as the “Enron Loophole” because it was written by the good folks at Enron to allow them to speculate on electricity supplies without federal oversight.  That was when Phil’s wife, Wendy, was on the board of directors at Enron. 
 
Ah, Phil Gramm!  You remember him, the one who said we weren’t in a recession, that it was only a “mental recession” brought on by a “nation of whiners”.  You know, the one who John McCain tried to distance himself from only to have him back on board a month later as his number one economic advisor.
 
According to Wikipedia, Democrats tried from 2000 to 2006 to close the loophole but were blocked by the Republican majority.  This year the Democratically controlled congress again tried to close the loophole but Bush vetoed the bill.  
 
The Washington Post article says that pure speculation is responsible for $20-25 a barrel in oil costs.  Hmmm, without speculation the current price of oil would be under $100 a barrel and gasoline would be under $3 a gallon. 
 
You really need to read the Washington Post article start to finish.  See, things aren’t going to get any better and in fact may get a lot worse as the same players who have made $billions running up the cost of your gas and electric bill will soon begin trading US oil contracts in Dubai and the Commodity Futures Trading Commission, the “watchdog” over futures speculation, has said it does not plan to stand in the way of this new wave of speculation.
 
If you liked the last 8 years, you’re gonna’ love life under McCain.