Posted on 04/18/2012 6:20:55 AM PDT by Kaslin
So many imaginary villains and so little time.
This week, President Barack Obama is taking the fight to "oil speculators" and "market manipulation" (nee "free enterprise"), demanding that traders put up more money for transactions and government ratchet up enforcement and monitoring. "None of these will bring gas prices down overnight," Obama helpfully explained in his news conference. "But they will prevent market manipulation and help protect consumers."
No, they won't. They'd probably hurt consumers, and they would doubtlessly raise the cost of doing business. So for a few hundred words, let's treat populist agitation as if it were earnest policy.
Let's start by being thankful for oil speculation -- no matter what the motivation of those involved might be. To begin with, speculation allows companies with exposure to fluctuating commodity prices to hedge against rising costs by locking in. Sometimes the bet pays off; other times it doesn't. But risk and profit are not yet crimes.
Oil speculation also offers consumers and investors information about the future that can help them make informed long-term decisions. Speculators trade commodities based on the information available in the marketplace. They reflect reality; they don't create it.
But sometimes, unfortunate as it is, prices will rise. "Gouging," the close scaremongering cousin of "speculation," helps persuade consumers not to use what they don't need. It incentivizes to modify behavior -- our driving habits or the size of our cars. We conserve more when prices are higher, so we avoid shortages, and producers intensify their production. (Funny how Democrats get this concept when writing energy policy designed to artificially spike fossil fuel prices.)
The president surely understands, as well. He knows that a fungible commodity's price is driven by demand and geopolitical events beyond the control of speculators or, for the most part, Washington. There are billions of people in China, India and elsewhere who are new consumers of oil -- and they are better off for it. We are better off for it.
Or put it this way: Natural gas prices are trading so cheaply that it's no longer profitable to drill for most companies. According to Businessweek, there are only 624 operating drills in the United States, the fewest since April 2002. So I guess natural gas speculators forgot to manipulate the world market this month. Or do oil manipulators only work part time? Confusing.
Where, after all, is the president's evidence that oil speculation is driving up oil prices? The White House "Fact Sheet" on the matter offers plenty of solutions to a problem it hasn't even proved exists. Why are we going to spend another $52 million -- and who-knows-what in political witch hunt trials -- on a theory that plays on assumptions and flourishes in the progressive blogosphere?
Obviously, much of this is driven by political realities and accusations by Republicans that the president isn't doing enough to curb rising oil prices. George W. Bush also talked about manipulation nonsense, and I'm sure it's gone on forever.
So it's also worth noting that Washington, regrettably enough, already has the power to enact the counterproductive regulations the president is asking for. Nothing needs to be passed. It was only last year when Obama formed a special task force designed to find manipulation in the oil market and to ferret out incidents of gas gouging.
It is rare when Washington gives a topic what it deserves. But the Oil and Gas Price Fraud Working Group has given the American people exactly what the topic deserves: zip.
You got it half right, David. Urkel is demanding traders put up more money for transactions, etc., but he didn't denounce "oil speculators" and "market manipulators".
He denounced ILLEGAL "oil speculators" and "market manipulators".
Don't aks me why there have been no arrests if he knows there has been illegalities taking place but that's the beauty of Obonics. It means never having to explain yourself.
We always allow ourselves to get sucked into their narrative.
ILLEGAL immigrants becomes "immigrants" and we play along. ILLEGAL "oil speculators" becomes "oil speculators" and we play along.
Will we never learn?
Free markets work every time they’re tried.
Free markets are indeed the true path.
However, I think it would be really COOL to require anyone purchasing OIL (or futures) to take delivery of said OIL at their place of business...
Imagine those Wall Street desks and a delivery truck driver, “Where do you want it, Mac?”
A sack of rocks is more intelligent that the phoney occupant of the Oval Office.
There is no other explanation for some of the outrageous positions he takes on subjects which should be common knowledge among most intelligent individuals.
His "minions" (see FR thread today re Van Jones) now are attacking the American Legislative Exchange Council, a conservative organization which has advocated for legislation supportive of the Constitution and individual freedom for many years.
Censorship, threats, coercion, and redistribution are marks of a kind of government arrangement which is distinctly different from that which was structured by the U. S. Constitution. The President and his "progressive" followers must be confident that through their "education" system, they have sufficiently prepared a voter population that is ignorant of the ideas of freedom, else there would not be such an undisguised attack during this election year.
That would be tough to do, as would coffee, orange juice, corn, soybeans, etc.
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