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Friday, February 24, 2012

One More Time... Gas Prices Edition

Feb 24th, 2012

It's the speculation in commodities markets which is to blame for the recent explosion in gas prices.


While the "conservative" media is blaming the President, the irony here is that the solution is the exact sort of regulation his detractors would scream bloody "Communism" over.

Kevin G. Hall lays out the facts:

"U.S. demand for oil and refined products — including gasoline — is down sharply from last year, so much that United States has actually become a net exporter of gasoline, unable to consume all that it makes.

Yet oil and gasoline prices are surging.

On Tuesday, oil rose past $106 a barrel and gasoline averaged $3.57 a gallon — thanks again in no small part to rampant financial speculation on top of fears of supply disruptions."

The solution, and there is only one, is simple: gut the entire commodites industry. It serves no good. It manipulates and exploits the markets for everything from energy to food with something less than the dignity of backroom bookies. It is the reason more people starve than is necessary. It is also the reason the GOP's darling war criminal, Allen West, had to pay more to fill up his Hummer.

Not so, say Republicans. It's all the President's fault. At least, in their increasing state of Presidential Panic, they sure as hell plan to spin it that way. Alex Seitz-Wald explores the GOP bullshit:

"Speaker John Boehner (R-OH) “instructed fellow Republicans to embrace the gas-pump anger,” while Rick Santorum conspiratorially claimed Obama is intentionally pushing up prices to cut carbon emissions. Not to be outdone, Newt Gingrich released a 30-minute video today about how “the Obama administration is so anti‑oil” that they’ve forced the price of gas to go up."

As I said, this is bullshit.

Robert Reich notes some of the rational factors in supply and demand but writes:

"Neither of these would have much effect were it not for the third reason — overwhelming bets of hedge funds and other money managers that oil prices will rise on the basis of the first two reasons.

Speculators have pushed crude oil to $105.28 per barrel, up 35 percent since September. Brent crude, Europe’s benchmark, is now $120.37 a barrel – also worrisome because many East Coast refineries use imported oil.

Funny, I don’t hear Republicans rail against speculators. Could that have anything to do with the fact that hedge funds and money managers are bankrolling the GOP as never before?"

Bart Chilton of the CFTC speaks out to ABC.

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