I return to town and find that someone named Lester Salt has been combing your Letters to the Editor over the past six months or so for letters to you I have written. Here is my response.
I never commented on the farm bill itself, but only on the portion of it which constituted the “Close the Enron Loophole Act,” which John McCain specifically opposed, with the advice of his economic advisor, former Senator Phil Gramm, who got the “Enron Loophole” enacted into law in 2000.
The Masters study of the crude oil futures speculation which occurred earlier this year is controversial only to the Wall street speculators who enriched themselves at consumers’ expense by running up the price of crude oil futures from $65 a barrel in June, 2007, to almost $150 a barrel at the height of the speculation frenzy in July, 2008. Many of these same speculators also were involved in the derivatives market regarding subprime mortgages which led to the recent meltdown and the bailout. So not only did they cause us pain at the gas pump, but they caused us pain in our stock and mutual fund portfolios this year, as well as causing a huge increase in the deficit.
There is no such thing as “overly burdensome regulation on speculators” as Mr. Salt calls it. We desperately need more regulation of Wall Street speculation and other greedy, harmful Wall Street conduct.
Demand for oil had some impact on the price of crude oil in the first six months of 2008, but the major force driving up crude oil futures prices was Wall Street speculation. During this period, there was often excess crude inventory available, not a shortage of crude.
The Commodity Futures Trading Commission, now constituted with Bush appointees, has absolutely no credibility. After Barack Obama is elected, these Wall Street cronies will be removed from the CFTC as their terms end or they resign.
Other commodities also saw increases in futures prices during this period; the speculators were at work in these areas too. But crude oil had the largest impact on the economy and got the most publicity, as Americans were seeing gasoline prices that sometimes reached $5 per gallon.
Ted Vaill