Romney Contributors Are The Hedge Fund Managers And Commodities Speculators Driving Up The Price Of Gas

Last week we tried drawing attention to the fact that it is the same hedge fund managers and commodities speculators funding Mitt Romney's profligate campaign who have pushed the price of gas up for their GOP allies. Every time you buy an increasingly expensive gallon of gasoline, you're funding Mitt Romney's shameful attack ads. Bernie Sanders-- whose reelection efforts you can support here-- has been fighting this battle for years-- and this week he stepped it up.

Bernie penned a letter to Gary Gensler, chairman of the Commodity Futures Trading Commission, and the other 4 members, asking them to crack down for real on excessive oil speculation. Both senators and House Members are stampeding to sign on to the letter. Not Republicans of course. Here's the letter:

Dear Chairman Gensler, and Commissioners Chilton, Wetjen, Sommers, and O’Malia:

We are writing to urge you to immediately enact strong position limits to eliminate excessive oil speculation as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. As you know, the Dodd-Frank Act mandated that your agency promulgate and enforce such limits no later than January 17, 2011. We are disappointed that, more than a year later, the Commission has not fulfilled this important regulatory duty.

Congress determined that speculative position limits are an effective and critically important tool to address excessive speculation in America's oil and gasoline markets. It is one of your primary duties--indeed, perhaps your most important--to ensure that the prices Americans pay for gasoline and heating oil are fair, and that the markets in which prices are discovered operate free from fraud, abuse, and manipulation.

There has been a major debate over the last several years as to whether spikes in oil prices are caused entirely by the fundamentals of supply and demand or whether excessive speculation in the oil futures market is playing a major role. It is clear to us that debate has ended. Exxon Mobil, Goldman Sachs, the Saudi Arabian government, the American Trucking Association, Delta Airlines, the Petroleum Marketers Association of America, and even a report last year from the St. Louis Federal Reserve have all indicated that excessive oil speculation significantly increases oil and gasoline prices. According to a February 27, 2012 article in Forbes, excessive oil speculation “translates out into a premium for gasoline at the pump of $.56 a gallon” based on a recent report from Goldman Sachs.

The facts bear this out. According to the Energy Information Administration, the supply of oil and gasoline is higher today than it was three years ago, when the national average price for a gallon of gasoline was just $1.90. And, while the national average price of gasoline is now over $3.70 a gallon, the demand for oil in the U.S. is at its lowest level since April of 1997. Nor is the global supply of oil at issue. According to the International Energy Agency, in the last quarter of 2011 the world oil supply rose by 1.3 million barrels per day while demand only increased by 0.7 million barrels per day. Yet, during this same period, the price of Texas light sweet crude rose by over 12%. Meanwhile, oil speculators now control over 80 percent of the energy futures market, a figure that has more than doubled over the past decade.

As the cost for American people to fill their gas tanks continues to skyrocket, the CFTC continues to drag its feet on imposing strict speculation limits to eliminate, prevent, or diminish excessive oil speculation as required by the Dodd-Frank Act. Although the CFTC has adopted initial position limits, they are not strong enough and not yet in force owing to industry opposition, delays in swaps oversight and data collection. This is simply unacceptable and must change.

We urge you to take immediate action to impose strong and meaningful position limits, and to utilize all authorities available to you to make sure that the price of oil and gasoline reflects the fundamentals of supply and demand. This could entail promulgation of rules only with regard to the currently regulated exchange markets. Swaps rules should also be implemented immediately, but even so, waiting for swaps rules to trigger all position limits is simply not adequate to protect consumers. We urge you to develop alternative methods of moving forward and to do so as swiftly and expeditiously as possible.

We have a responsibility to ensure that the price of oil is no longer allowed to be driven up by the same Wall Street speculators who caused the devastating recession that working families are now experiencing. That means that the CFTC must do what the law mandates and end excessive oil speculation once and for all.

Thank you for your attention to this important matter. We look forward to receiving your response.

Many of the Blue America candidates have been campaigning against speculators manipulating prices of gas and other commodities all year. Lee Rogers (D-CA) has been using the argument effectively in discussions with voters in Santa Clarita, Antelope Valley and Simi Valley in Southern California:

"Oil speculators gamble on Wall Street and we pay the price at the pump. The price is not governed by supply and demand. The supply is not our problem. Fuel was America's largest export in 2011. Our oil output is higher now than it has been in decades. But speculators who bet that oil will be a higher price in a month from now, based on turmoil in the Middle East, rising global demand, or refinery capacity, end up causing an artificial supply problem even when one doesn't exist. This is because those who own the commodity, hold on to it waiting for the price to raise. It's a self fulfilling prophecy that makes both the speculator and the oil company rich. Oil is one of our most valued commodities. It affects the price of nearly everything we purchase from fresh produce, to shipping, to airplane tickets, to taxi rides. In some cases those who gamble with speculation, also own the commodity. Talk about a conflict of interest!


"Big oil and the Republicans solution is to 'drill, drill, drill.' Since high gas prices isn't really a supply problem, drilling for more oil and increasing the supply won't solve our problems. It will just make more money for the oil companies already raking in record profits, because speculators will keep the price high and there will be more oil to sell at that high price. Plus, if we start drilling today, the real effects at the pump will take months or years to feel. On the other hand, ending oil speculation will have an immediate effect on gas prices.

"Speculation causes volatility in the market price for oil. Let's restrict oil trading like other goods, in the open market based on real stock investments. I'm calling for an end to oil speculation and when I get to Congress, some of my first actions will be fighting to remove this stranglehold around the necks of consumers at the hands of big oil companies and speculators trying to get rich."

Straight across the country, Nicholas Ruiz makes a similar argument against the right-wing tag team Sandy Adams and John Mica:

"Senator Sanders' letter illustrates that there are members of Congress that understand the problems of trade and speculation, and who are working on solutions to these problems. For my part, I not only support the objectives of the letter, but urge the nation to consider that we must move forward with a New Deal agenda that tethers the investment activity of Wall Street to the viability of Main Street. An important component of the New Deal agenda I propose is the institution of the Public Trust, a new federal trading institution which ensures that the American people's interests are protected against excessive speculation."

A couple dozen senators-- from the best of the best, like Jeff Merkley (D-OR), Sherrod Brown (D-OH), Barbara Boxer (D-CA), Sheldon Whitehouse (D-RI) and Al Franken (D-MN), to the real bottom of the barrel, your Mark Pryors (D-AR) and Joe Manchins (D-WV)-- have signed onto Bernie's letter, giving him the clout he's needed to get this show on the road. Over in the House there is a great ideological span, from stalwart progressives to sleazy Blue Dogs supporting this-- though no Republicans, of course. These are the Democrats who have signed on so far:

Maurice Hinchey (D-NY)
Louise Slaugher (D-NY)
Jan Schakowsky (D-IL)
Pete DeFazio (D-OR)
Peter Welch (D-VT)
Pete Stark (D-CA)
Raul Grijalva (D-AZ)
Barbara Lee (D-CA)
Zoe Lofgren (D-CA)
Dennis Kucinich (D-OH)
Bruce Braley (D-IA)
Mazie Hirono (D-HI)
Marcy Kaptur (D-OH)
Lloyd Doggett (D-TX)
Tim Ryan (D-OH)
Chellie Pingree (D-ME)
Tim Bishop (D-NY)
Sale Kildee (D-MI)
Mike Honda (D-CA)
Brian Higgins (D-NY)
Paul Tonko (D-NY)
Leonard Boswell (Blue Dog-IA)
Mike Quigley (D-IL)
Joe Donnelly (Blue Dog-IN)
Bob Filner (D-CA)
Sander Levin (D-MI)
Bill Pascrell (D-NJ)
Eleanor Holmes Norton (D-DC)
Bobby Rush (D-IL)
Jackie Speier (D-CA)
Suzanne Bonamici (D-OR)
Nick Rahall (D-WV)
Anna Eshoo (D-CA)
John Tierney (D-MA)
Mike Michaud (Blue Dog-ME)
Hank Johnson (D-GA)
John Lewis (D-GA)
John Olver (D-MA)
Gerry Connolly (D-VA)
Rosa LeLauro (D-CT)
Jim McDermott (D-WA)
John Conyers (D-WA)
Marcia Fudge (D-OH)
Gary Ackerman (D-NY)
David Cicilline (D-RI)
Lucille Royball-Allard (D-CA)
Tammy Baldwin (D-WI)

My new congressman, craven corporate shill and Blue Dog, Adam Schiff hasn't bothered to sign on. He might fear losing a nickel from some corporate lobbyist. How about your congresscritter? Did he or she sign? Paul Ryan (R-WI) would probably rather cut his hand off than sign anything like that. The Democrat running against him, Rob Zerban, would have been glad to sign it-- and help push it. He told us that "Paul Ryan and the GOP are looking at the jobs numbers and they know our country is rising and our economy is growing. None of this progress is due to their help and instead all they have done is obstruct and get Congress sidetracked. This effort to shift the conversation from encouraging job growth figures to gas prices is a desperate attempt to distract the American people. Ryan has pushed for tens of billions in tax breaks to oil but refuses to see that now, more than ever, we need to end our dependence on foreign oil." And Mary Jo Kilroy (D-OH), who narrowly lost her congressional seat today, told us that "With gas prices causing real concern among Ohio's working families, it is time for the Commodity Futures Trading Commission to get to work and make sure that Americans are not being taken advantage of at the pump. Speculators hurt industry and businesses from airlines, to trucking, to grocery stores and restaurants, as unfair gas prices drive up the price of goods and services. Regulators need to do their job, a lesson we should have already learned from the financial collapse of 2008."

Today's newest Blue America endorsee, Montana national security expert, Rep. Franke Wilmer sees the situation from another perspective: "For 40 years we have considered oil and energy independence to be national security issues. If that's still true-- and I think it is-- then of course we must prevent excessive speculation. Would we speculate on the future probability of nuclear war or another terrorist attack? Of course not." Norman Solomon (D-CA), also devoted to national security as a priority in his campaign told us that "The myth that rising gas prices are mere results of supply-and-demand is very useful to oil cartels. What we need from Congress is the clarity and commitment that insists on regulatory integrity instead of corporate-friendly passivity." All of these candidates want to stop excessive speculation and they all agree with Bernie Sanders approach. The way Alan Grayson (D-FL) put it was that "I have this quaint and hopelessly old-fashioned view that when the law sets a deadline, it should be met." All they candidates are on the same page-- and all on this page too (if you'd like to see them in Congress next year).

Let me leave you with a few words from someone who will hopefully be in Congress next year, Darcy Burner (D-WA), who would have not just signed the letter, but would have offered to help Bernie draft it:

"It's long past time we cracked down on people who make money by manipulating markets to rip Americans off. Hard-working Americans deserve fair prices, and Senator Sanders is right on in calling for the CFTC to live up to it's legal obligations."