While the Obama administration's energy policy is not to blame for rising gas prices, part of the blame for failure to effectively regulate the oil commodity market can be placed on both the current administration and Congress. In recent years, a Wall Street-friendly (and Wall Street financed) U.S. Congress has passed several laws to help the banks that were interested in trading oil futures.
The Commodity Futures Modernization Act of 2000 (CFMA) was drafted by the man who today is President Obama's Treasury Secretary, Timothy Geithner. The CFMA, in effect, gave financial institutions free reign over derivatives trading in energy futures, absent any government supervision, as a result of the financially influential lobbying pressure of the Wall Street banks. Oil and other energy products were exempt under what came to be called the "Enron Loophole."
In 2008 during a popular outrage against Wall Street banks for causing the financial crisis, Congress finally passed a law over the veto of President George Bush to "close the Enron Loophole." As of January 2011, under the Dodd-Frank Wall Street Reform and Consumer Protection Act , the Commodities Futures Trading Commission (CFTC) was given authority to impose position caps on oil traders beginning in January 2011.
These limits have not yet been implemented by the CFTC because a conservative majority on the CFTC has refused to implement a mandate from the Dodd-Frank Wall Street reform bill to close oil trading loopholes and provide more transparency. While CFTC Chairman (and former Goldman Sachs executive) Gary Gensler has spoken publicly of trying to close loopholes, enforcement of the Dodd-Frank bill remains non-existent.
In a recent column for the Huff Post, Senator Bernie Sanders of Vermont stated that the CFTC doesn't "have the will" to enact these limits and "needs to obey the law." He adds, "What we need to do is"limit the amount of oil any one company can control on the oil futures market. The function of these speculators is not to use oil but to make profits from speculation, drive prices up and sell." (See video in the original posting here).
The bottom line is that consumers are paying more at the gas pump because of futures trading on Wall Street, inadequate regulation of the oil market and the ability of speculators to drive gasoline prices up every time the drums of war beat in the
The moment it becomes clear that the Obama administration is serious about market reforms and acts to prevent wars in the
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