Obama, for his part, points to Congress and its tax subsidies for Big Oil as the reason for our pain at the pump, as well as the drumbeat for war with Iran, and rising demand because of voracious Chinese consumerism. These causes have at least a vestige of verisimilitude, and they sound good.
But in making this a conversation about politics, and the crazy side blaming the reasonable side and vice versa, what's missing is that neither party is really addressing the issue head on. No party and no branch of government is pointing the finger of blame where it really belongs: the greedy speculators at such too big to exist banks as Goldman Sachs. (I wrote about unregulated speculation in a Paul Krugman comment last week and was promptly accused of being a Republican sock puppet by another reader!)
It's an election year, and no politician wants to bite the hand that feeds him or her. There are a few exceptions to the rule, such as Bernie Sanders, and I'll get to him later. But first, let me indulge in one of my favorite pasttimes: the Parse a President game. This edition is from a slightly condensed version of Obama's Saturday radio address, titled Ending Subsidies for Big Oil Companies.
Hi, everybody. As I’m sure you’ve noticed over the past few weeks, the price at your local pump has been going up and up. And because it’s an election year, so has the temperature of our political rhetoric.
(It's costing families about $40 extra for fill-ups -- the same magic number I said the average family would get when we passed that tax holiday sunsetting thingmabob that will never really sunset, and will give us deficit hawks an excuse to cut Social Security. Oh well. Easy come, easy go.)
What matters most to me right now is the impact that rising prices have on you. When you’ve got to spend more on gas, you’ve got less to spend on everything else. It makes things harder. So I wanted to take a minute this weekend to explain what steps my Administration is taking when it comes to energy – most importantly, producing more of it while using less of it.
My approval ratings are down, so let me take some precious time away from my weekend and try to improve my numbers through a little friendly propaganda.
The truth is: the price of gas depends on a lot of factors that are often beyond our control. Unrest in the Middle East can tighten global oil supply. Growing nations like China or India adding cars to the road increases demand. But one thing we should control is fraud and manipulation that can cause prices to spike even further.
For years, traders at financial firms were able to game the energy markets, distort the price of oil, and make big profits for themselves at your expense. And they were able to do all that because of major gaps and loopholes in our regulations. When I took office, we did something about it.
The Wall Street reforms I signed into law are helping bring energy markets out of the shadows and under real oversight. They’re strengthening our ability to go after fraud and to prevent traders from manipulating the market. So it’s not just wrong, but dangerous that some in Congress want to roll back those protections and return to the days when companies like Enron could avoid regulation and reap enormous profits, no matter who it hurt.
Okay, here is where it gets really, really dicey. I am actually venturing into some blatant lying here, folks. That Wall Street reform law I signed to control speculation two years ago, that Dodd-Frank thing? Well, the oil speculation part has never even been enforced! Gary Gensler, head of the Commodities Futures Trading Commission, has the sworn duty to stop folks like Goldman Sachs from manipulating the market and driving up oil prices to artificially high levels. The too big to exist banks are still ripping off you fine folks at the gas pump like there's no tomorrow. Of course, Gensler used to work at Goldman Sachs, but I am not telling you that. Goldman Sachs is a friend of mine and a friend of my friend, Michael Bloomberg. I am not going to diss them in an election year, or any year. Because they run the whole show. This is pure Kabuki. There is no oversight of the financial crime family. I repeat. No oversight.
What’s more, at a time when big oil companies are making more money than ever before, we’re still giving them $4 billion of your tax dollars in subsidies every year. Your member of Congress should be fighting for you. Not for big financial firms. Not for big oil companies.
In the next few weeks, I expect Congress to vote on ending these subsidies. And when they do, we’re going to put every single Member of Congress on record: They can either stand up for oil companies, or they can stand up for the American people. They can either place their bets on a fossil fuel from the last century, or they can place their bets on America’s future. So make your voice heard. Send your representative an email. Give them a call. Tell them to stand with you.
I am ignoring the fact that Senator Bernie Sanders has demanded that we do something about those wild and crazy speculators. I am ignoring the fact that as your president, I have it in my sole power to release just a smidgen of our oil reserves to make Wall Street speculation stop in its tracks and prices drop like a rock. Why, just the other week, Reuters put out a false report that Gordon Brown and I had agreed we'd release our reserves. And the price of oil immediately tanked. And when it turned out the rumor was false, the price went right back up. What do you know about that? Heh, heh. In the meantime, I will convince you its you and me against the world, babe, and blame both parties in Congress. I may as well call my campaign The Truman Show, get it? Because Harry ran against Congress. Congress evil, Barry good. Heh.
And tell them to be honest with you. It’s easy to promise a quick fix when it comes to gas prices. There just isn’t one. Anyone who tells you otherwise – any career politician who promises some three-point plan for two-dollar gas – they’re not looking for a solution. They’re just looking for your vote.
They lie! Demonize Congress even more and forget about the banksters, folks! Trust me. Triple Heh.
If we’re truly going to make sure we’re not at the mercy of spikes in gas prices every year, the answer isn’t just to drill more – because we’re already drilling more. Under my Administration, we’re producing more oil here at home than at any time in the last eight years, that’s a fact. We’ve quadrupled the number of operating oil rigs to a record high, that’s a fact. And we’ve opened millions of acres on land and offshore to develop more of our domestic resources.
Never fear. By the time Election Day rolls around, this pain at the pump will be but a dim memory, Wall Street will have raked in billions, my campaign war chest will have swollen to bursting. And of course, I am drill baby drilling -- dangerous deepwater operations are back to full capacity and there will be a fracking well in every back yard if I have anything to say about it. Remember my State of the Union address? As long as the big polluters promise they won't use toxic chemicals in the water they shoot down into the earth, then it's all good. Forget about Dow Chemical and Bhopal and the BP spill. Let's look forward, not backward. And notice how I don't suggest that people actually drive less, or conserve energy. Because this has nothing to do with an energy shortage and everything to do with greed.
(here, though, he does speak about fuel efficiency in the vehicles of the future, as well as solar and wind power. Nobody can quibble with that.)
We can do even better. And we will. But what we can’t do is keep being dependent on other countries for our energy needs. In America we control our own destiny. So that’s the choice we face – the past, or the future. And America is what it is today because we have always placed our bets on the future. Thanks, and have a great weekend.
Again with the moving on meme. The only folks betting on the future and winning are the unregulated Wall Street greedsters. Your own futures? Meh.
You may recall last summer when Senator Bernie Sanders of Vermont leaked a lot of embarrassing info about the oil speculators, proving that they had been the sole cause of the last (unexplained until then) big spike in prices in 2008. The players in this regulated-in-name-only casino are all the usual suspects: Goldman, Morgan Stanley, the Koch Brothers, T. Boone Pickens. All the erstwhile "confidential" devils are here.
And now they're at it again, and Sanders is at it again. He and 69 other legislators have written a letter to Gary Gensler to remind him that he is falling down on the job and flouting the law in not regulating the Wall Street greedsters who continue to inflict so much human misery. I just wish he had also written directly to the president to ask why he is falling down on the job and not firing Gensler. Much as I love Bernie, he will only go so far and no further.
Sanders points out that the skyrocketing prices have nothing to do with a short supply or a particularly rising demand, the usual cause of spiking numbers. There is no shortage of oil in the world market. "According to the Energy Information Administration," said Sanders, "the supply of oil and gasoline is greater today than it was three years ago, when the national average price for a gallon of gasoline was just $1.90. Today, the national average is more than $3.70 a gallon at a time when the demand for oil in the U.S. is at its lowest level since April of 1997."
Eighty percent of the futures market is now controlled by unregulated financial institutions, compared with just 30% a decade ago.
So with the exception of Bernie Sanders and perhaps a precious few other altruistic types who still act in the interest of the voters, here is what our elected officials are actually doing. Because this is how the dance is performed: The president pretends to push, and Congress passes, some watered-down legislation that merely nibbles around the edges of reform. The new rules never actually kick in right away, because can-kicking is so lucrative. To make sure the carious teeth of Dodd-Frank never clamp down and actually bite, lobbyists fall all over themselves, frantically contributing to campaign funds. The politicians sign their names to letters demanding enforcement of the rules, and they leak these demands to the media. We think they really care about us. Lobbyists lobby the politicians some more, and politicians get more campaign cash. The President blames Congress and tells us we can make a difference if we'd only pick up the phone and call them. His campaign sends out emails telling us to stop the Republican lies. He asks for $15 to help stop the Republican lies. The speculators laugh all the way to the bank, we get screwed, and the mad world spins.
|Fingerpointing USA (from top, Gensler, Sanders, Obama)|