Another Day, Another Administration Witch Hunt

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.

David Harsanyi is a columnist and senior reporter at Human Events. Follow him on Twitter @davidharsanyi.

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  1. “None of these will bring gas prices down overnight,” Obama helpfully explained in his news conference.

    Wait, I thought there was no point in drilling because it won’t bring down gas prices overnight.

    1. Yeah, but that’s “drilling”, which is bad. This is about punishing evil investors who gets rich on da backs of da poar. Don’t you see the difference?


        1. CHILRENZ!

    2. Or the Keystone XL pipeline. That wouldn’t bring gas prices down overnight either.

  2. And embargoing supply of oil from Iran has no affect on price either. And I’m sure that war in the gulf will bring down the price of oil….

    1. Stop bringing supply and demand into this. You know that is an antiquated theory used by the wealthy to enslave the poar.

      1. global supply n demand remain in balance before and after the run-up per the saudi oil minister…who might know just a wee bit moar than H&R posers…ahh, posters.

        1. Explain what you think this means.

          1. the saudi oil minister made it clear that production & availablity hadnt changed.

        2. Supply and demand always balance at the market-clearing price.

  3. I can see my comment under the crack cocaine sentencing thread really should’ve come over here.

  4. “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.”

    Actually, Mr. Obama, you’re just guaranteeing an oil shortage.

    Here’s a hint: Prices are a signal of the scarcity of the resource + the demand for the resource. If you artificially reduce the commodity price, you WILL run out of that commodity.

  5. the CEO of Exxon testified that light, sweet crude should be ~$60-70/brl.

    the saudi oil minister said global supply n demand remains in balance before & after the speculative run-up.

    >the best reg is the threat of SPR release which cuts the legs from under the parasites…hopefully AFTER they’ve taken long positions!

    1. the CEO of Exxon testified that light, sweet crude should be ~$60-70/brl.

      And the CEO of Exxon has absolutely nothing to gain from the Government manipulating the price of oil, right?

      Fucking idiot.

      1. Don’t respond to it. Just walk away. It’s a sockpuppet, designed to suck you in. Just walk away, and there can be an end to the suffering.

        1. Very apropos for this thread. And give me vehicle and all juice I can carry.

          1. Be still my dog of war. I understand your pain. We’ve all lost someone we love. But we do it my way!

            1. You can run! But ‘cha can’t hide!

              1. We do it my way. Fear is our ally. The gasoline will be ours. Then you shall have your revenge.

                1. No deals. I want to drive that truck.

                  1. I never cease to be amazed at the ability of commenters on this board to quote that movie. Thinking about it, I guess I really shouldn’t be that surprised.

                    1. and several on this board never cease to be amazed at POTUS’ ability to make the most fantastical creations seem possible. Let’s see: America is sitting atop vast reserves of natural gas, oil, and coal so what does Obama do? Blameshift.

                      One reason prices were as low as they were when The One took office was Bush’s lifting of the moratorium on domestic drilling. When people have the ability to do something but refuse to use it, we call them slackers. What is the word for a country that does that?

                    2. Fair.

        2. Yeah I know Epi, it just amazes me that someone can even claim such stupid shit.

          I really hate economics-ignorant people.

          1. It’s specifically being ignorant to tweak you and suck you in. Don’t fall for it.

      2. u mean he was “incentivized” to advocate reduced prices?! >its mental gymnastics astound. moar please

        1. Exxon buys oil from Saudi Arabia, refines it and sells it as Gasoline. Why wouldn’t they want the price of unrefined oil to be low?

          1. it also follows they want retail as high as possible, and “talking-down” the market is antithetical. >since supply n demand remain in balance, & the dollar is stable, explain away the wholesale price run-up disconnected from both.


      1. Needz moar Joooz

        1. Goes without saying.

    3. the CEO of Exxon testified that light, sweet crude should be ~$60-70/brl.

      And speculators are using their intuition, based on the factors that affect the price of energy (like, say, having a none of the above energy policy) to estimate the price of oil in the future.

      I know that whole deductive reasoning is tough for you liberals Orin, but please try to keep up.

      1. speculators contribute none of these: drill, extract, transport, refine, or market yet i deduce you carry their water for free!

        1. Speculators cause future prices to be realized in the present, thereby increasing the incentives to increase production now, when there is a long lead time to bring production on line. That ultimately leads to lower oil prices in the future when the production comes online.

          Speculation on futures contracts is a key mechanisms for smoothing prices over time.

          Otherwise, you end up with a price shock if something bad happens and you didn’t let people speculate on the probability of it happening.

          1. “Speculators cause future prices to be realized in the present,”…

            …if they can profit from the future prices.

            1. And if they are wrong and prices go down, they lose money.

              Let the market keep speculators in line by popping the bubble. Encourage shorts.

    4. “CEO of Exxon testified that light, sweet crude should be ~$60-70/brl”

      Yes, it should be. It is not, because of politically imposed reasons- governments fucking around with the stability of the market. Not because of evil capitalism.

      1. govt doesnt bid-up the price on the futures market, ur benevolent speculators do.

        1. $

          1. show me where the $ trendline correlates to the speculative run-up.


            1. You must have missed the memo.

              $ = you are too fucking stupid to waste time arguing with, FUCK OFF!

              1. thanks, you’ve played ur hand as well as you could. next ante

            2. Link leads to trends in dollar to Euro conversion. That is no more relevant as point of proof than if you had linked to pictures from the Hubble telescope. Distractions, I like that. Mighty good trolling.

              1. Before you ask, the euro is not a stable base line. If their central bank is issuing currency and ours is doing so at the same time, the trend will be different than if one or no parties were QEing out the wazzo. Feel me?

                1. wanna do USD vs gold instead?

        2. Traders respond to the perceived security of the investment as it is affected by policy. Therefore, when Obama talks about subsidizing this, regulating that, it does in fact fuck with the market.

          On another issue, why do you insist on looking ignorant if you believe you have a valid point to make? You can’t expect retarded thoughts combined with a retarded appearance to be considered seriously.

          1. read above ^ know-it-all…before dismissing the exxon CEO, the saudi oil minister, & the $ trendline.

            1. First of all, I am really more interested in a response to my inquiry. I am curious about your problem. What makes your dumbass brain function? I bet it has something to do with an Apple corporation cellular telephone.

              If the CEO and the shah are able to sell their oil for more money, this is acceptable. They have the right to trade their resources as they wish. We are not entitled to it costing any particular price. If they were actually able to charge whatever they want, fuel would be as expensive as possible without making mass use of other forms of stored energy economical to use. But the suppliers are not only Exxon and A-rabia. They are not all in cahoots. The market price exists because of competition.

              “Oil should be $60 bbl” does not mean “we’re charging more because we’re evil”. It means there is some reason the market price is being distorted above what it should be.

              1. one presumes anyone self-described as “death rock and skull” would know all about “dumbass brain function” (sic)

                and death rock, the CEO wasnt being complimentary to speculators…which u would know if u had watched his testimony. but alas, ur memes will suffice eh?…death rock.

                1. What are you “sic”ing? You are displaying more stupidity.

                  If the CEO is saying the price for oil is higher than it “should” be, it does not matter what he is saying about speculators. The fact is those speculators are using information to form reasonable predictions about the future costs relating to the commodity.

                  1. so “reasonable” = disconnected from supply n demand & dollar valuation?
                    >is it “reasonable” to anchor tankers at sea to reduce inventory in the face of demand reduction? explain how that is a natural market function. please show ur work

                    1. Immediate demand increases when political bullshit causes future difficulty in the supply of the commodity. As there is a finite amount of the commodity immediately available to consumers, the amount of fuel present in the corner gas station’s tanks for example, the price can quickly go up if future deliveries will cost more.

                      If suddenly the price drops, it may be an economically wise choice to store some of the oil currently in transit for a time when it will command a higher price. Farmers were doing the same thing with grain a few years back. What is unreasonable about freely making decisions about trading a resource that I own?

    5. the CEO of Exxon testified that light, sweet crude should be ~$60-70/brl

      If it should be – it would be.

      Both parties you mentioned have a strong self-interest in keeping oil prices high.

    6. If the CEO of Exxon was talking about WTI crude that is trading today around $102.60/brl then that sounds about right. A $30 premium per brl sounds right given the uncertainties about taxes, regulations, and what is going on in oil producing countries.

  6. What entity does the most to manipulate markets? It’s not the oil companies. It’s something bigger, more corrupt, more full of shit, and more debt ridden.

    1. Hmmm. This is a toughie…so many to choose from. Is this based on a matter of scale?

      1. Think big. And really huge tracts of debt.

        1. Still fuzzy…

          1. Impossibly huge tracts of debt.

            1. Latveria! Of course! Doctor Doom never was very good with the books.

        2. Debt? I want to change my answer to The Sierra Club then.

    2. Greenpeace?

    3. What entity does the most to manipulate markets? It’s not the oil companies. It’s something bigger, more corrupt, more full of shit, and more debt ridden.

      Romeny’s super pac.

  7. “risk and profit are not yet crimes.” We’ll have that fixed soon enough.

    1. Give it a few more years and that disgusting practice called “making a profit” will be ended once and for all. Then there’ll be love and laughter and peace ever after.

      1. I almost hope they do achieve their goal just so they’re all left with the miserable shithole they’ve created. Fuck it, I can always off myself, and I don’t have any children.

        1. Don’t do that. The misery will be mostly confined to urban centers and the coasts. You should be able to find somewhere in the middle to hole up.

          1. You all have a place in my compound in Montana. (except for o3)

            1. Address?

              1. You’ll be contacted when the time is right.

                1. you know who else had a secret compound….

                  1. Batman?

        2. That place is called California.

  8. How come no one complains when the speculators drive the price of oil down?

    1. Because people like o3 will state that the markets are vindicating his masters policies then.

    2. Steven Chu does.
      He hates the nasty gasssss.

  9. Oh, also Speculator = Jooos!

    1. Space Jews?

      To this day I’m still amazed no one calls Berman and Braga on that.

      1. “Just what we need, a druish princess”

        1. “He’s an Asshole too, sir. Major Asshole.”

        2. “Druish princesses are attracted to wealth and power…and I have both!”

      2. To this day I’m still amazed no one calls Berman and Braga on that.

        They were ripping on [their idea of] free marketers. If they’d made the Ferengi statists who loved government, while being equally as loathsome, you’d have heard it.

      3. I thought the Ferengi and them being an anticapitalist caricature was Rodenberry’s doing? I mean TNG allowed him to really let loose his Utopian Communist vision.

  10. Does the president object to futures and commodities exchanges in general? Or is it all markets?

    1. Liberals despise everything that smacks of freedom – it’s all so messy, you see.

      Is it any wonder that our modern liberals are the descendents of the early 20th century “progressive” movement – and their partners in crime, fascism and communism?

      Neat, orderly, and as homogenous as possible, in thought if not in race.

  11. No matter how bad the corn harvest, burning witches won’t improve matters.

    However, it distracts the hoi polloi.

    1. “Hoi” is a definite article; therefore, “the hoi polloi” is redundant.

  12. Some earnest young lady was trying to convince Bill O’Reilly last night that his pro-Obama position on this was wrong. O’Reilly couldn’t see it.

    Let me ask, “If I fill up my tank today, because I think the price of gas will be up 2 cents by Friday, am I a speculator?” We can’t have a hundred million motorists speculating, so let’s pass a law that you can’t have more than 1/2 tank in your car.

    1. At least Bill O is willing to admit he’s completely economically illiterate. Eric Bolling should be given the same leeway though.

      1. *shouldn’t be given

    2. Some earnest young lady was trying to convince Bill O’Reilly last night that his pro-Obama position on this was wrong. O’Reilly couldn’t see it.

      I’m pretty sure O’RLY’s father got royally screwed over, or is convinced he was screwed over, by Big Oil or something like that. He’s held that irrational grudge for years. Decades.

      1. That’s not the only irrational grudge. His talking points memo said that ‘in a free society people have the freedom to be foolish,’ yet he’s one of the biggest Drug Warriors on Fox.

    3. Huh, I didn’t know O’Reilly bought into this anti-capitalist crap.

      1. Always count on O’Reilly to take the stupid position. He’s the walking, talking example of the idiocy of “common sense”.

      2. Of course he does. O’Reilly is a nearly 100% efficient perpetual wrongness machine.

        1. The heat loss and noise could be counted as wrongness byproducts and actually seem to add up perfectly to 100%.

    4. O’Reilly’s default position is to blame the speculators re: oil. Without fail. Doesn’t matter if every economic expert on the planet walks him through how the process works. It’s always speculators.

      1. O’Reilly is of his time. If he had lived in the 1600s, he’d be burning witches. If he’d lived in the 1700s, he’d be in the slave trade. He was raised in the “because I said so” style, and accepts what he was taught as a child, and questions nothing.

      2. I’m sorry to point this out but O’Reilly and the president do have a point seeing that anyone who participates in a futures market is a speculator and they are reasonable for the prices in that market? And moving on.

  13. whats up with the intern stuff at CATO?

    1. What, were they ordering hookers to go too?

      1. As good free-marketers, I’m sure CATO interns would have paid the $47 bucks and not gotten busted.

        1. Indeed!

  14. Has Obama been talking to Fernandez-Kirchner recently?

    1. Hey, she’s doing a lot of great stuff. Given enough time, it’s all really going to pay off.

  15. “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.”

    He does? How do you know? From the evidence, he doesn’t.
    Why do people think this guy is so smart when he hasn’t shown any brillance in the last five years?
    In fact, when has he shown any brillance ever?

    1. Because he’s charming, black, and electable.

      1. Not to mention “clean and articulate”, Restoras.

        1. with no trace of the negro dialect.

    2. Unless, he’s brilliantly evil. (which I suspect, as not even Tony is that stupid.)

      1. Under estimate the stupidity of Stinky the Itchy Anus at your own peril.

      2. ‘Brilliantly’ is a bit of an overestimation, IMO; let’s say competently evil.

    3. He edited the Harvard Law Degree.

  16. Trying to block Iran from selling oil and threatening war have no effect on oil prices ???

  17. “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe” – Steven Chu

    “under my plan, electricity rates would necessarily skyrocket” – Barack Obama

    I thought they wanted higher gas prices? Am I missing something?

    1. You forget that politics is the art of saying completely contradictory things to different voting groups, and hoping nomebody finds out.

      1. Mitt Romney ALSO approves this message!

        1. But Mitt Romney told me he disapproves of this message!

          1. Obama’s three cent titanium tax goes too far, but Mitt Romney’s three cent titanium tax doesn’t go too far enough!

    2. AFTER the election, when he has more flexibility.

    3. Yes, the part where they added ” but we dont want to be blamed for it.”

    4. “Am I missing something?”

      Only vintage Obama and further proof that liberalism cannot survive without a massively uninformed population. He literally counts on a large chunk to be either apathetic or stupid, and knows that the bulk of the media will parrot whatever he says.

    5. $5/gallon (or pick your arbitrarily high price) gas is wicked if the money goes to Small Oil, but it suddenly, magically becomes virtuous if the money goes to Big Government.

  18. Sounds like a win win for Obama; he gets gas prices to increase while seeming to fight the increase in gas prices.

  19. Life once again imitates an Ayn Rand novel.

    Who else do socialists usually blame when the market doesn’t obey the government’s dictates?

    1. Anyone that is an Other. This always seems to include dah joooz.

    2. when the market doesn’t obey the government’s dictates

      “Market Failure” ALWAYS mandates MOAR GUMMINT. That’s the issue with the market – it’s ALWAYS failing, therefore always requiring MOAR intervention.

      Mmm, mmm, mmmm – BHO.

  20. In all this, let’s not forget that a factor in prices going up is the devaluation of the dollar. The more printed, then the more prices of everything must rise correspondingly.

    1. ^^also, this^^

      1. Holy motherfuck

        Well, now we can see the problem – haven’t printed enough dollars. Duh!

        Thanks for the chart – it points the way to the solution…

        /The Bernank

    2. Yeah, really, maybe the real “speculation” is the speculation that the dollar will be worth 10% of it’s current value in a few years. So the speculators are demanding more dollars to offset the risk that those dollars will not hold their value long.

  21. SO glad to see Urine bring his unique brand of stoopid to the conversation.
    Thanks for the entertainment as always, dumbass.

      1. Aw, but he he’s such a CUTE little feller!

  22. I find myself increasingly stumped on why so many adults seem to actually believe the “Great and Powerful OZ”-style pretentions of presidents… Genuinely convinced that they “create jobs”, “control the price of oil” and perform many other magical feats of omnipotence. People seem to suddenly forget elected officials are really just lawyers with ego-issues.

    I mean, this may sound cynical and elitist… but for fucks sake, people are just dumb as rocks. I suppose next on Obama’s re-election agenda is to throw bread to the masses, and host a month long series of chariot races and gladitorial events. That, or follow Fernandez-Kirchner’s lead and establish price caps… then nationalize the oil industry after they point out that price caps disincentivizes investment.

    1. “control the price of oil”

      When given control of the means of production as presidents certainly have in the energy sector to a great extent, than such ubermensh claims to presidential power are not only true but it is stupid to ignore them.

      Or, are you suggestion supply does not effect price?

      It is like saying Stalin had no control over the gulags. Our energy sector has been thrown in a gulag of regulation where the chief regulator can simply say ‘no activity there.’ Clinton did it for California’s greens, he did it for the Maylasian clean coal industry, Bush did it for Jeb, and Obama did it for himself.

      1. Or, are you suggestion[sp] supply does not effect[sp] price?

        Me no speek chinese, solly.

        Not sure I grok how US presidents magically can manipulate supplies provided by OPEC, et al, but I’m sure you can explain further.

        Look man, my simple point was the president can *propose* policies that might have some effect (or, ‘affect the market’)… but it has no impact on the actual real global price of a barrel of oil, or – probably more important – change actual refining capacity…

        Gulag, ay? Your ideas are intriguing to me and I wish to subscribe to your newsletter.

        1. effect[sp] price?

          Verb form of ‘affect’ means ‘to influence.’

          Verb form of ‘effect’ means to ’cause to happen.’ ‘Effect’ is closer to what I meant.

          The other, ‘suggestion’ was indeed my own retardation.

          I implied you were ‘stupid’ without meaning to; I’ve seen the unwashed masses of punditry make the excuse for Obama that he can’t change the prices, and that was the vision in my head at the time I wrote. Sorries.

          The purpose of OPEC is to liberate price from the mundane concern of supply so they can maximize their profits, so that doesn’t really wash as an explanation except as a short term matter if the right policies are put in place.

          If the right policies were put into place, the back of OPEC would be broken.

        2. Gulag, ay? Your ideas are intriguing to me and I wish to subscribe to your newsletter.

          Yep, energy policy as political prisoner, a simile of my own design, glad you approve.

    2. If we got bread and circuses, at least we’d be getting something of value.

      1. Bread is bad for you, and i hate circuses as a form of entertainment. Clowns, elephants, guys on stilts, trapeze acts, so much to hate.

        1. Oh, but the aerial silk artists make up for the clowns.

      2. More like tofu and performance art…

    3. The same reason they go to church. Too lazy to contemplate life on its own terms.

  23. But risk and profit are not yet crimes.

    Just wait.

  24. It’s good David touched upon it here, but since this is written for us, he doesn’t fully go into how the commodities markets works. Maybe Stossel can do a “futures trading 101” type of show and what would happen without such types of contracts. People think about oil, but the agriculture biz works in the same way. …. although problem is again, it’s still mostly preaching to the choir. The people who need to hear it most won’t be in the audience!

    (ironically, if he was given free reign, he’d be of more use on ABC than Fox Biz)

    and actually due to the petro dollar, purple_persuader and Hazel above made good points about inflation and hedging considerations as well

    1. Yeah, agreed. The futures market is vital to companies that want to hedge and gives signals to producers and consumers on the direction commodities are going. It can also tell producers and investors that it might be worth it to start storing commodities for forward sales, if the forward price is in deep contango.

      By letting the investors and the traders make bets in the futures market, we add way more players to the market. So rather than just producers and consumers entering the market to hedge, we get players entering for pure profit. With more people entering the market, we get way more eyes on the market and these eyes are way more vigilant. The hedgers basically just buy insurance if it seems to make sense for their real business model, but the traders and investors just want to make money on the actual market. So they watch for signs of future spikes and falls more than the hedgers ever will.

      Letting traders get into the game completes the market, allowing the dealers to make the market (dealers like to have equal bets on both sides, so they are market neutral) but more than that it means more people are pushing the market to be efficient.

      If a speculator tries to push the market way up there have to be buyers on the other side making the opposite bet. And if the price ever gets clearly inflated, then there’s a huge pile of money waiting for the first traders who jump in to short the commodity.

  25. Obama doesn’t need to solve anything. He doesn’t even need a policy to be enacted. He just needs to be seen criticizing powerful and distant forces that are malevolently manipulating our lives. That way people can vote for him as a symbolic reinforcement of their own views.

    Which is the same reason Bush didn’t need to do jack-shit to get a Federal Marriage Amendment added to the Constitution. He just needed to be seen criticizing the move by judges to force religious institutions to accept homosexuality as normal, and that was enough to make the politics work. Powerful and distant judges manipulating the rules to force people to reject their personal social views.

    Fortunately, lots of people have gay friends to counteract the excesses of anti-gay politics. Far fewer people have a positive view of commodities and futures traders (though Chicago is the center of commodities work, so you’d think an ex-Chicagoan President would be more circumspect).

  26. This is one of the few times I don’t agree with an article on Reason. I don’t care for Obama and have a list a mile long on how he sucks however… Speculating does move oil prices just search 60 minutes they did a huge expose showing how Goldman Sachs was trading 25 contracts for every one barrel in circulation. This author must be smoking something when he wrote this. How can you say speculation does not affect the price of gas, all we have to do is look cross eyed at a country in the Middle East and Wall Street jacks it up 30 cents. The five biggest traders of oil commodities are investment banks! The whole reason they started trading it was so companies could hedge their bet, we are a long way away from that at this point. Make Goldman Sachs and the other investment banks actually take ownership of the oil they trade and you will see the barrel drop. Why the hell do we even allow them to trade it if the main players are all investment houses???

    1. It’s not like it’s some secret that the market has investors who aren’t hedging. In fact, the tax regime has all sorts of rules to allow people to decide whether they are or aren’t hedging and in many cases the default assumption is that a contract is NOT a hedge.

      The investors and traders are there to make money betting on where the price will go. By aggressively pushing each other, these investors are forcing the market to find prices more accurately.

      More liquid markets are more efficiently priced markets, all else equal. A market that only had hedgers would be far less traded. And hedging consumers and producers pay way less attention to the market than investors and traders (who are incredibly aggressive and seize on any possible rumor or information to try to correct prices).

      The best way to get good prices is to allow highly liquid markets with lots of trading.

      And the libertarian argument: they are buying and selling things that you do not own. It is not your business, even if it raises or lowers the price of things you buy. Just like it’s not your business if a Walmart opens or closes a store on private property near your house – even though the presence or lack of a Walmart may have a noticeable effect on retail prices in your area.

    2. Judge please see “Economics in One Lesson”, which touches on commodies speculation several times, and explodes myths about it. Don’t try to learn economics from NBC.

      1. “Don’t try to learn economics from NBC.”

        Especially seeing as they don’t know any.

    3. I think the operative point here is that jug-ears is, on principal, against low gas prices. Low gas prices and cheap energy leave people with more discretionary income, and that makes them uppity. They begin to imagine that they don’t need jug-ears and his illiberal intellectual friends. One can conclude, therefore, that whatever this move against “speculation” will do, bringing down the price of gas won’t be it.

      1. Pep talk for Bam Bam:
        1. Stop pretending you want gas prices to fall, people see through that.
        2. Just because you say “speculators are causing gas prices to rise” doesn’t make it true. You have to show how it is true, because your credibility is lower than snail feces on this issue.
        3. Give up on argument entirely, and just say “all problems are caused by greedy rich people”, so that you don’t have to pretend to be for or against specific positions, or prove anything.

        1-2-3 GO PARASITES!!

  27. It’s amazing the power speculators have to do whatever politicians claim to be against. Politicians say that speculators push oil prices up, crop prices down, …

    1. Here is Henry Hazlitt from 1946 on crop price stableization.

  28. Good post.Mac MTS Converter will make you have the nice moment.

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