By OcJim
In The Wealth of Nations, Eighteenth century economist, Adam Smith spoke of the invisible hand that benefits humanity by self-regulation of the marketplace, though guided by individual ambition. Seeking unbridled privilege by government, huge corporations have consistently used this concept, most recently when their own invisible hands confiscate 56 cents from us, for every gallon we purchase at the gas pump.
Are beleaguered Americans not tired of being swindled by banks that we bailed out during the economic crisis and speculators who have turned our economy into a personal lottery in which the rich are the only players, and we are the sure losers?
Forbes Online (2/27/2012) calculates that speculation has added about 56 cents to every gallon of gas you purchase at the pump. Some might talk about welfare among the poor, but how about welfare for the rich. How do you like contributing 56 cents to the rich for every gallon of gas that you purchase?
How do we stop it? Supposedly the somewhat weak Dodd-Frank Wall Street reform bill, with the Volker Rule, was supposed to stop banks like Goldman Sachs or companies like Koch Industries from engaging in proprietary trading of commodities (including all things of value) with the firm’s own money, all for self-profit. As usual, Republicans have hamstrung the Volker Rule and Democrats have equivocated until regulation was delayed until July of 2012.
Don’t get your hopes up. There is really no surety that the Democrats or Obama will overcome Republican attacks to protect campaign benefactors so that crude oil speculation cannot continue.
In the meantime, Goldman Sachs, the Koch brothers and other speculators can put billions of dollars into oil futures, which in effect bids gasoline prices up, hoping that a conflict with Iran can make them billionaires many times over, at our expense. Before the George H W Bush administration, speculation other than for end users (for example, airlines, who want to assure a certain price guarantee for the future) was forbidden.
Think Progress actually uncovered a series of Koch Industries corporate documents that revealed Koch Industries’ notorious scheming, manipulations, and bribe activities that helped pilfer money from consumers and rob voters of a voice:
| 10/6/1986 | First oil derivative is introduced to Wall Street by traders at Koch Industries. |
| 1990-1992 | Koch, along with several oil companies and Wall Street speculators, form a coalition lobbying group to deregulate oil speculation. Partners included Koch, Enron, Goldman Sachs, BP and others |
| 1/21/1993 | George HR Bush administration makes first move to deregulate oil speculation. |
| 1997 | Koch is shifting from oil refining and pipelines to financial products. |
| 12/12/2000 | Sen. Phil Gramm (R-TX), after lobbied by Koch and Enron, creates the Enron Loophole. |
| 2008 | Rampant oil speculation spikes prices. |
| 2009 | Koch presentation to the Crude Oil Exchange (ICE) boasts that Koch Industries is one of five top oil speculators |
| 2010 | Koch’s Tea Party lobbies to reign in energy market regulations of Dodd-Frank Bill. |
| 2011 | Koch allies fight to undermine any reform of unchecked speculation |
You can bet that by this summer, you will be paying over $5 a gallon for gasoline. And don’t bet that the July date given for starting Commodity Futures Trading Corporation (CFTC) regulation will come to fruition.
Again we bear the burden: a death warrant for small struggling businesses who can’t pay the additional transportation costs, an impossible expense for low-wage workers who commute more than 10 miles to work, less food on the table for millions who live hand to mouth, and a cold winter without affordable fuel, especially for the vulnerable – and this for a redistribution of income and wealth from the middle class and the poor to the wealthy, income which means abject poverty for too many Americans.
In spite of the dire consequences to so many Americans, Republicans will be fighting for their rich buddies against the Volker Rule — tooth and nail — and there is no assurance that the Obama administration and the Democrats will battle as well for the people.
Christine
28 Feb 2012We’re nearly at 4 for the first time. I have no idea how some of the families I know are going to make it work and even we will have trouble.
Tracy
28 Feb 2012at this rate I think i’ll have to trade in my truck even though i really don’t want to 🙁
Angela
28 Feb 2012*faints*
Rosannah
28 Feb 2012In Australia we’re already paying $1.60+ per litre which is $7.20+ per gallon…
Erika
28 Feb 2012This topic makes me physically ill….it literally becomes a matter of paying bills, getting groceries OR filling the gas tank. But if you drive to work (if you are fortunate to be employed) then the choice is complicated that much more….gotta go to work to earn the $ to pay for gas to go to work to get the $ to……….
Iyam
28 Feb 2012i predicted $5/gal back in january. something tells me it’ll go higher, at the rate they’re pumpin us all blind now
Leah
28 Feb 2012well here in the UK , we are already paying over $10 US dollars per gallon …. I have a 1.6 litre petrol car , I get 100 miles for approx $32 US …..
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Tuo11
10 Mar 2012Western Europe…the place the progressives want us to be more like…have even higher gas prices. Yet they still push for bigger government to remedy all of our problems. The free market isn’t perfect, but if we could ever get back to it, it would be far more effective at getting essentials to the most amount of people than a centrally planned economy. A centrally planned economy is what we have now. Regulation, taxation, and collusion have given us the prices we have now. Not just on oil…food prices are higher than they need to be…healthcare prices have been driven up with quality being driven down…and the same with college tuition.
The strategy is to distort the free market as much as possible and weaken the dollar of the hard working people so much that they have no choice but to come to the thieves in Washington with their hands out.