GEORGE W. BUSH, JOHN W. McCAIN AND THE RISE IN GASOLINE PRICES-- THE PHIL GRAMM LOOPHOLE

Gas is $4 a gallon-- $4.04 was the national average yesterday-- but in L.A. if someone was selling it for $4.04, there would be lines around the block. It's already closer to $5 a gallon than $4 a gallon. It'll be past $5 a gallon before Obama is inaugurated. And it is neither supply, nor demand. It's unregulated Enron-style price manipulation and mass theft (or turkey-plucking) by robber barons afraid that the good times may soon end. How long ago was Bush startled when a reporter asked him about $4 a gallon gas? "That's interesting," he told the nation. "I hadn't heard that." What country does he live in? How can we expect these Republicans to fix anything when they don't even know anything is broken? Watch bozo:



Bush's business partners, the Saudis, certainly know the price of gas has gone through the roof. And you know what they think? They think the price is unjustifiable and, unlike Bush, they want to do something about it.

Saudi Arabia says it will call a summit of oil producers and consumers in an effort to stem the surge in the price of oil, amid fears that the world economy could suffer if fuel costs continue to rise. The world's biggest producer said recent rises, including the record $10 leap on Friday, were not justified by market fundamentals...

The Saudis are well aware that the price of gasoline is being manipulated by unregulated (and barely taxed) commodities speculators, one of the mainstays of the Bush Economic Miracle that has worked to turn so much of America into a basket case.

Bob O'Brien, Online Stocks Editor at Barrons, told CNN he blames speculators who "are going where the money is on Wall Street. Certainly what happened over the past few days was speculation, you saw. At this point $139.00 a barrel the price of crude has no bearing, no relation what so ever with the fundamental cost of extracting crude from the ground and shipping it to a refining facility. That cost is probably closer to $50.00 a barrel."

And then there are the K Street lobbyists... or at least the ones who are left on K Street and haven't joined their brothers and sisters on the Double Talk Express. They "may be one group of people who don’t mind the soaring oil prices."

Advocates of various stripes have had to fend off a variety of legislation that would do everything from opening OPEC up to antitrust lawsuits, to allowing oil and gas developers access to offshore areas now off-limits, to taxing “windfall profits” the industry now gets and redirecting the money to promote renewable energy.

None of these proposals ever has much hope of passing, although they return every year, meaning new contracts for K Street.

But as gas reaches a national average of $4 a gallon for the first time in the nation’s history, some see the makings of a consensus on Capital Hill: making it harder for investors to buy crude on the commodity futures markets.

Critics say the increased participation of non-commercial investors that don’t intend to use the commodity-- as opposed to, say, airlines that also buy crude-- has helped raise prices.

Increasingly, lobbyists representing Wall Street and other investors are waking up to the idea that for all the bashing that oil executives have received in recent years, hedge funds and other oil speculators could end up paying the political price for high gas costs.

“More and more senators are questioning the adequacy of the [Commodity Futures Trading Commission’s (CFTC)] regulatory oversight, and more and more are bothered by the role that speculation and non-commercial, institutional investors are having in preventing energy markets from functioning properly,” said Bill Wicker, a spokesman for the Energy and Natural Resources Committee.

What they're describing, essentially, is another Enron-style Ponzi game. Had a few executives and politicians been tried, found guilty and then shot after the Enron debacle, I assure you we would not be hurtling towards $5/gallon gasoline this year. Instead, McCain's chief economics advisor, Phil Gramm inserted a little loophole into Enron legislation, a loophole the GOP loved, a loophole that led directly to a massive transfer of wealth-- hundreds of billions of dollars-- from the pockets of consumers to the pockets of a handful of billionaire speculators and their political protectors like Bush and Cheney.

Unregulated speculation in oil futures is driving up gas prices and keeping them high.

The Gramm-Enron legislation of 2000 exempted electronic trading of energy commodities from regulation. "The Enron loophole," as it is called, was the product of former Texas senator Phil Gramm. It exempted energy futures trading from the Commodities Futures Modernization Act just in time for his wife Wendy, who was on the Enron board of directors, to benefit from the artificially created energy shortages in California that brought Enron down.

These "dark markets" traders, exempt from Commodity Futures Trading Commission rules, make huge amounts of money at the expense of the nation's economy and our family budgets. President Bush knows this. Sen. John McCain knows it, too. He opposed the recent $307 billion farm bill because it contained legislation that would end deregulated speculation. Gramm is his economic adviser.

UPDATE: AND THE PRICE OF GAS, BY THE WAY, IS THE #1 ISSUE IN THE ELECTION

Everywhere I went in Washington last week the big story was the price of gasoline. The tragedy is that few people are talking about how Republican economic policies allowed for Enron-style price manipulations. Today at Politico David Paul Kuhn points out that gas prices are absolutely killing the Republicans, more because people sense that they've been up to no good, than really understanding just how no good they are.

Distress over gas prices could hardly come at a worse time for Republicans. Voters usually blame a poor economy on the party that controls the presidency, and there are few more potent reminders of hard economic times than the high cost of fuel at the pump. On Sunday, for the first time ever, AAA found that the national average cost of gasoline rose to $4 a gallon.
 
"Of all the products that we buy, there is none in which the price is so obvious and so in our face," said Stephen Hess, a presidential analyst at the Brookings Institution. "It's not how often we buy gas-- it's how often we pass a gas station. It has a built-in irritant."
 
Thus far, it's McCain who has most suffered from that irritation. On an issue that three in four registered voters believe will be "very important" in making their "decision about who to vote for this fall"-- a greater portion of voters than those who cite terrorism, moral values or the war in Iraq-- Pew shows Republicans lagging Democrats by 15 percentage points on who will give "greater priority" to energy. While McCain's bid for the presidency is likely dependent on his ability to outperform the unpopular Republican brand, the same poll shows him trailing the GOP on the issue. He trails Obama by an even larger margin, 18 percentage points, among voters asked which candidate would better "deal" with the energy issue.

The oil and gas industry has paid out $14,206,861 in bribes and protection money to politicians this election cycle. The biggest recipient was, predictably, John McCain. They give around 70% of their bribes to Republicans and 30% to Democrats (mostly Blue Dogs and other reactionaries who vote with Republicans).