If the United States Senate’s dimmest bulb really wanted to stick it to oil speculators, she would side with President George Bush and back oil exploration along the nation’s continental shelf, among other places. Instead, she has chosen to attack a straw man with a bill that will probably pass, but will do absolutely nothing about energy prices because it does nothing to increase supply.
Patty Murray recently barnacled herself to whining airline executives who claim to have discovered proof that speculators were to blame for rising oil prices: “Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab.”
Imagine that – people buying and selling a commodity for profit? That bears an unsavory similarity to capitalism and something must be done about it! And Patty Murray intends to do just that with her foolish “Excessive Energy Speculation Act of 2008.”
I have two pieces of information that might help enlighten Ms. Murray, although I doubt that enlightenment is what she seeks. First of all, people who actually know what they’re talking about (they’re called “economists”) insist that evil speculators actually smooth out markets and dampen wild price oscillations. If airline presidents were smarter, they would purchase aviation fuel on the futures markets so that they would know in advance what their fuel costs would be and plan accordingly. And the reason that oil contracts trade so much more often than they once did is an effect rather than a cause. Futures contracts for any commodity that is exhibiting rapid price fluctuations will be traded frequently. And finally, any legislation passed by the Congress that would limit oil speculation only has force within the United States. Oil speculators abroad will simply ply their trade elsewhere.
But of course, this means nothing to Patty Murray, because reducing oil prices and punishing speculators is not her real intention. If she wanted to do something about either she would join with Republicans as they seek to increase supply. Since President Bush rescinded an executive order banning oil exploration along United States coastlines, crude oil prices have fallen by more than $20 per barrel. That means that every speculator who bet on oil prices continuing to rise has lost his shirt or perhaps his hajib.
What Patty Murray and her homey, Washington’s junior U.S. Senator Maria Cantwell, are seeking is not consumer relief, but showboating. They wish to create the illusion of “doing something,” knowing full well that they are doing nothing and have no intention of accomplishing anything. Maria Cantwell let that cat out of the bag last week. When asked point blank if she would support efforts to provide Americans with relief by increasing supply she adhered tightly to the Nancy Pelosi/Harry Reid party line: “Oh, we definitely want to move beyond petroleum. And so there will be a supply side offered by the Democrats and it will include everything from battery technology to making sure that we have good home domestic supply, and looking, as I said about moving faster on those kind of things like wind and solar that can help us with our high cost of natural gas.”
Translation: She’s only interested in economically unviable and technologically infeasible goofball programs that are nowhere near bearing fruit and likely never will. Gasoline prices are not going down. In fact, unless something substantive is done, in a few years we’ll be recalling the $4.00 per gallon summer of 2008 as the good old days.
In the meantime, Americans will have to settle once again for promises from Democrats that they will get even with “the man.” Propping up cardboard cutouts of enemies and knocking them down is a party tradition. It’s the foundation of the tax code, a fact that Barack He-Who-Must-Not-Be-Middle-Named Obama let slip during a debate. Getting even has become the last vestige of the civil rights movement, and that’s been enough to keep 90% of the Democrats’ most loyal demographic in line. Will that getting even with cartoonish enemies be enough to seduce the rest of us?