Gas Pump Thievery: Who's Really Behind the Rising Prices at the Pumps?
Gas Pump Thievery: Who's Really Behind the Rising Prices at the Pumps?
By Jim Hightower, AlterNet
Posted on June 25, 2009, Printed on June 25, 2009
http://www.alternet.org/story/140889/
Like a Fourth of July crescendo of fireworks, our gasoline prices are rising higher and higher. While this is tough on consumers, we're assured by a covey of tongue-clucking industry analysts that nothing can be done about it, for it's simply the law of supply and demand in action -- so suck it up, and pay up.
But hold your BPExxonMobilShellChevron horses right there. Supply and demand? The supply of crude oil has risen this year to its highest level in nearly two decades, even while the demand for gasoline has dropped dramatically, having fallen this month to a 10-year low.
Let's see -- supply up, demand down. That's a classic market formula for cheaper prices at the pump. Yet our prices have steadily moved up, rising by two-thirds since the beginning of the year (and by 60 cents a gallon in the past two months alone).
What's going on here is not the "magic of the marketplace," but some hocus-pocus by brand-name dealers. What might surprise you, though, is that the wheeler-dealers now j****** up our pump prices don't operate under the BPExxonMobilShellChevron brands -- but the logos of Goldman Sachs, Morgan Stanley and other Wall Street traders that have been placing vast, unregulated, secretive bets on the future price of oil. They're playing an electronic c***** game in a global "dark market" of exotic derivatives and credit swaps.
If this sounds vaguely familiar to you, it's because this is the same game that Wall Street played with subprime mortgages, leading to the present crash of our economy. And, yes, these are the exact same banksters that you and I are presently bailing out with our trillions of tax dollars.
Yet, there they go again. By pooling money from sheltered hedge funds, sovereign state funds, offshore accounts and other super-wealthy investors, speculators like Goldman and Morgan have quietly been buying trillions of dollars worth of oil derivatives -- which essentially are bets that oil prices will rise to a certain level by a certain date.
Unlike those investors who actually purchase contracts for future delivery of oil, there is no limit on how much money these gamblers can put into the oil market. Nor do they have to report to anyone how much they have bet, even though their massive infusion of money is totally and artificially distorting the real value of petroleum.
As CNBC television's top energy correspondent, Sharon Epperson, reported last month, "It's this money flow -- rather than the fundamental supply-demand data -- that's driving oil prices higher."
Why is this allowed? Because the Commodity Futures' Modernization Act of 2000 included a provision that was quietly tucked into the law by then-Sen. Phil Gramm, R-Texas, specifically prohibiting any regulation of such commodity-based derivatives. Among the enthusiastic backers of this legalized thievery were Robert Rubin, the Wall Streeter who was Bill Clinton's treasury secretary, and his protege, Larry Summers, who is now Barack Obama's chief economic advisor.
This bipartisan cabal created a speculative mechanism that's presently sucking money out of your pocket with every gallon of gas you pump. Meanwhile, every dollar that Goldman, Morgan and the rest use to inflate oil prices is a dollar they are not investing in real economic activity that could create middle-class jobs.
Of course, Wall Street culprits are trying to keep their involvement hush-hush. When a McClatchy newspaper reporter approached Goldman Sachs about it, the response was terse: "Goldman Sachs declines to comment for your story."
As Woody Guthrie wrote in a song about outlaws: "Some'll rob you with a six-gun/Some with a fountain pen." It's time to regulate Wall Street's gas-pump thievery -- and to put a few of the perpetrators in jail.
To find out more about Jim Hightower, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.
COPYRIGHT 2009 CREATORS SYNDICATE INC.
Jim Hightower is a national radio commentator, writer, public speaker, and author of the new book, "Swim Against the Current: Even a Dead Fish Can Go With the Flow." (Wiley, March 2008) He publishes the monthly "Hightower Lowdown," co-edited by Phillip Frazer.
© 2009 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/140889/
By Jim Hightower, AlterNet
Posted on June 25, 2009, Printed on June 25, 2009
http://www.alternet.org/story/140889/
Like a Fourth of July crescendo of fireworks, our gasoline prices are rising higher and higher. While this is tough on consumers, we're assured by a covey of tongue-clucking industry analysts that nothing can be done about it, for it's simply the law of supply and demand in action -- so suck it up, and pay up.
But hold your BPExxonMobilShellChevron horses right there. Supply and demand? The supply of crude oil has risen this year to its highest level in nearly two decades, even while the demand for gasoline has dropped dramatically, having fallen this month to a 10-year low.
Let's see -- supply up, demand down. That's a classic market formula for cheaper prices at the pump. Yet our prices have steadily moved up, rising by two-thirds since the beginning of the year (and by 60 cents a gallon in the past two months alone).
What's going on here is not the "magic of the marketplace," but some hocus-pocus by brand-name dealers. What might surprise you, though, is that the wheeler-dealers now j****** up our pump prices don't operate under the BPExxonMobilShellChevron brands -- but the logos of Goldman Sachs, Morgan Stanley and other Wall Street traders that have been placing vast, unregulated, secretive bets on the future price of oil. They're playing an electronic c***** game in a global "dark market" of exotic derivatives and credit swaps.
If this sounds vaguely familiar to you, it's because this is the same game that Wall Street played with subprime mortgages, leading to the present crash of our economy. And, yes, these are the exact same banksters that you and I are presently bailing out with our trillions of tax dollars.
Yet, there they go again. By pooling money from sheltered hedge funds, sovereign state funds, offshore accounts and other super-wealthy investors, speculators like Goldman and Morgan have quietly been buying trillions of dollars worth of oil derivatives -- which essentially are bets that oil prices will rise to a certain level by a certain date.
Unlike those investors who actually purchase contracts for future delivery of oil, there is no limit on how much money these gamblers can put into the oil market. Nor do they have to report to anyone how much they have bet, even though their massive infusion of money is totally and artificially distorting the real value of petroleum.
As CNBC television's top energy correspondent, Sharon Epperson, reported last month, "It's this money flow -- rather than the fundamental supply-demand data -- that's driving oil prices higher."
Why is this allowed? Because the Commodity Futures' Modernization Act of 2000 included a provision that was quietly tucked into the law by then-Sen. Phil Gramm, R-Texas, specifically prohibiting any regulation of such commodity-based derivatives. Among the enthusiastic backers of this legalized thievery were Robert Rubin, the Wall Streeter who was Bill Clinton's treasury secretary, and his protege, Larry Summers, who is now Barack Obama's chief economic advisor.
This bipartisan cabal created a speculative mechanism that's presently sucking money out of your pocket with every gallon of gas you pump. Meanwhile, every dollar that Goldman, Morgan and the rest use to inflate oil prices is a dollar they are not investing in real economic activity that could create middle-class jobs.
Of course, Wall Street culprits are trying to keep their involvement hush-hush. When a McClatchy newspaper reporter approached Goldman Sachs about it, the response was terse: "Goldman Sachs declines to comment for your story."
As Woody Guthrie wrote in a song about outlaws: "Some'll rob you with a six-gun/Some with a fountain pen." It's time to regulate Wall Street's gas-pump thievery -- and to put a few of the perpetrators in jail.
To find out more about Jim Hightower, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.
COPYRIGHT 2009 CREATORS SYNDICATE INC.
Jim Hightower is a national radio commentator, writer, public speaker, and author of the new book, "Swim Against the Current: Even a Dead Fish Can Go With the Flow." (Wiley, March 2008) He publishes the monthly "Hightower Lowdown," co-edited by Phillip Frazer.
© 2009 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/140889/
Views: 4
Replies to This Discussion
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Permalink Reply by Scott Baker on -
It's actually far, far worse than you make it out to be. In fact, Goldman Sachs has been behind every major bubble since the Great Depression. See this month's Rolling Stone article here:
http://zerohedge.blogspot.com/2009/06/goldman-sachs-engineering-eve...
to see how GS has systematically taken over the commodity markets (not just oil), the housing market, and garnered Trillions (yes, Trillions), in bailout money from us, the taxpayers.
If we don't curb this speculator robbery, we won't have a country left. Unfortunately, with GS in every significant financial position of government, there seems little chance of that for now.
There is a way; it's called Geonomics and it would end speculation by taxing away 100% of the value of a commodity (which rightfully, belongs to all of us - Exxon or GS didn't create the oil in the ground, after all), and returning that money to the community. Then, after pollution and other resource costs are paid too, oil companies could make profits on their true production of usable oil - i.e. after refinement, distribution etc. Speculation would be nearly impossible because the "fuel" for it would be taxed up front. Untaxing wages and capital, under the Single Tax, would free up productivity and innovation unlike anything we've seen in a hundred years.
If you agree, sign my petition here: http://www.change.org/actions/view/a_new_form_of_capitalism_geonomics
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Permalink Reply by Scott Baker on
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For more about the Single Tax, and Geonomics (formerly called Georgism), see my article on Op Ed News (where I am a writer and editor): http://www.opednews.com/articles/The-Single-Tax-The-true-r-by-Scott...
Seriously, folks, the Money Masters have come out with MORE power, not less, after nearly bankrupting the country. They are setting up to do it again, and this time they plan to replace the U.S. currency with a global version, when the world gets fed up with loaning us out of debt - which they already are. The bankers care not which country survives as long as their pockets are lined.
See "The Money Masters" if you have 3.5 hours to watch a movie (it's not boring, trust me), or read Ellen Brown, or even the best selling economics book of all time, "Progress and Poverty" by Henry George. We are being duped, hoodwinked and swindled. The last President to tell the bankers to Go to Hell was Lincoln, when he refused to take loans at 24% interest to fight the Civil War (see, NY bankers, like any other, have no patriotism either), and started printing U.S. Greenbacks for the first time, which Article 1, Section 8, of the U.S. Constitution gives explicit right to the government to do (actually, to Congress, but they weren't doing the job, either, at the time). The Founders were well aware of what would happen if private bankers were allowed to coin money, as they do now by creating money out of debt (that is, out of thin air) and Ben Franklin even said the true cause of the Revolution was because England suddenly forbade the Colonies from printing money on their own, and made us use English money instead, of which there was too little. This caused a depression and eventually, a revolution. The idea that it was over a Tea Tax, or Stamp Tax etc. is ridiculous.
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Permalink Reply by Jim Martin on -
Yes, the price we currently pay for gasoline is high largely because many people believe the price of oil will continue to increase. That is what makes many economic bubbles. One way to punish speculators is to cause the price to drop. Housing speculators planning to flip homes got stuck last year. Those speculating in tech stocks got stuck in 2000. We can make the price of oil drop by reducing demand. Use less by driving smaller, more efficient cars. Insulate homes to reduce heating and cooling costs. Alternative energy becomes more attractive as the price of oil increases. Installing windmills makes sense some places now. Solar cells make sense with some subsidies that now exist. The carbon pollution control in legislation now being considered can help. We can also be sure we are not part of the many people who jump on the band-wagon of bubbles. Buying oil futures may look like a good investment to some, but investing now could lead to big losses when this bubble breaks, as most bubbles eventually do.
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Permalink Reply by Debra Goldenberg on -
See "The Big One" by Michael Moore.
The middle class is indeed getting squeezed.
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