This is the week when President Obama captured headlines and prime television coverage by assembling his team in the Rose Garden and finally employing the bully pulpit against speculation in the oil markets. He demanded action to curb the clear impact of rampant speculative trading of energy on the prices paid for gasoline every day by all Americans. He also renewed the case against the outrageous subsidies to big oil companies that are nothing short of shameful.
And yet, for BP, Shell, Chevron and the rest, this was a week of tremendous success in Washington. How could this be so?
The President’s pronouncements, for the most part, are a call for Congress to act to empower the Commodity Futures Trading Commission to impose stronger limits on trading activity and to fund the cash-starved Commission. With an increased budget, the CFTC would have at least some prospect of monitoring the devilishly complex and massive derivatives markets, especially the markets that are so influential on gas prices. While these proposals are wholly justified and define a position that may be important in the fall election, one wonders what level of calamity or scandalous activity would be required to make Congress actually act against the interests of the big oil companies and Wall Street banks.