… Barack Obama‘s number one private campaign contributor was Goldman Sachs, which is one of the two major companies that is engaged in commodity index speculation. Morgan Stanley, which is another major contributor of his, was the other. You know, both the Democrats and the Republicans receive an enormous amount of money from the industries that benefit from commodity speculation. But the flip side of it is that the public doesn‘t understand this issue, so there is really no political downside to doing the wrong thing here. There‘s a lot of political risk to reform, because they‘re going to take that hit from their campaign contributors. But there is no up-side politically because the public doesn‘t get it.
Taibbi noted that speculative activity on commodities markets — you know, where little things like food and oil are priced — was limited by government regulations until the 1990s, when Wall Street speculators began worming their way into the markets in a big way. Now the markets are like poker games. Speculation makes commodities more and more costly, driving up prices we pay at supermarkets and gas stations.
On the same program with Taibbi was Michael Greenberger, the former director of trading and markets at the Commodity Futures Trading Commission, the agency that’s supposed to oversee these matters. Greenberger, who appeared in the Academy Award-winning Inside Job, voiced a faint hope that President Obama would address the problem of excessive speculation at his press conference scheduled for the next day:
Since January 26th, oil prices have gone up almost 25 percent. There has not been a word from the White House about the input that Wall Street, the banks we saved with our tax dollars after they wrecked the economy—their influence on inflating these prices. The additional money doesn‘t go to production… It goes right into the pockets of Wall Street. No new production. I hope the president recalls his statement of June, 2008, and calls Wall Street out on this.
At the press conference, Obama said nothing about speculators driving up oil prices. To my knowledge, no one in the mainstream press asked him about the issue in the Q&A that followed. It seemed the unspoken assumption of everyone present that rising prices are, exclusively, a supply and demand problem triggered by Mideast unrest.
The president did indicate in his blase fashion that he’d be willing to tap into the country’s Strategic Petroleum Reserve, in emergencies, as we work toward energy independence. One can only imagine James Kunstler’s apoplectic reaction to our big chief’s back-up plan.