President Obama, apparently frightened by his reelection prospects dimming, attacked “oil speculators” today in an attempt to find someone to blame for high gas prices. He asked Congress for $52 million so the Commodity Futures Trading Commission (CFTC) could clamp down on supposed speculators. “We can’t afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage, and driving prices higher — only to flip the oil for a quick profit,” he said. Obama wants the traders investing in oil to be forced to increase the percentage of their investment.
Of course, since this is a political ploy, Obama wanted action immediately: “Congress should do all of this right away,” he said. He carefully hedged his bets, however, saying that following his plan “will not bring down gas prices overnight.”
There is one problem: Obama’s own party has been the obstacle to the very measures he is championing now. In speculation, investors could conceivably invest a very low margin, like 5%, on something that could yield millions. The CFTC was given the power by the Dodd-Frank bill to raise the margins. This is what Obama is talking about, and the CFTC could have been taking action for the last two years. But they didn’t. The CFTC has five members, three of whom are Democrats.
The current price of oil is $102 per barrel; gas hovers around $4 a gallon. This is because the Obama Administration has flooded the market with money and inflated the currency. In addition, geopolitical tensions in the Middle East contribute heavily to the rise in oil prices.
House Speaker John Boehner called the Obama power grab unnecessary:
Where is his Federal Trade Commission? Where is the SEC? … He’s got agencies there, so instead of another political gimmick why doesn’t he put his administration to work to get to the bottom of it?
The political ploy hatched by Obama has two purposes; to scapegoat Wall Street in order to obfuscate his own role in destroying the economy, and to seize more control over the free market.