TheCenterLane.com

© 2008 – 2019 John T. Burke, Jr.

Keep This On The Front Burner

Comments Off on Keep This On The Front Burner

June 26, 2008

For the past few weeks, the Senate Commerce Committee has been hearing testimony about the impact of the so-called “Enron loophole” in the Commodity Futures Modernization Act of 2000, 7 U.S.C. §2(h)(3) and (g), which existed throughout Bill Clinton’s tenure in the Oval Office.  This “Enron loophole” is what has made it possible for speculators to drive the price of gasoline beyond $4 per gallon. Consider the Senate Commerce Committee testimony of Michael Greenberger, former Commodity Futures Trading Commission (CFTC) Director of Trading and Markets.  Mr. Greenberger testified that if the “Enron loophole” were closed, we would see “overnight” a 25-percent drop in the price of crude oil and as much as a 50-percent drop in the price of gasoline.  The Senate Commerce Committee hearing featured testimony by hedge fund managers and other market experts, concerning how the skyrocketing price of gasoline, diesel and heating oil are “breaking the back” of the American economy.  Some of these experts (knowing that their testimony would be falling on the “deaf ears” of bought-off lawmakers and friends of the oil industry) were nearly at the point of tears in describing how the rest of American industry is getting killed for the benefit of the oil industry.  Let’s revisit Mr. Greenberger’s point once again:  if the “Enron loophole” were closed, we would see “overnight” a 25-percent drop in the price of crude oil and as much as a 50-percent drop in the price of gasoline.  “Overnight” may be an exaggeration, although I’m sure he means a lot quicker than waiting for unbuilt and unplanned oil wells to start having an effect on the price of a barrel of crude.  (This turnaround time is considered by most experts to be a 10-year period.)

Our old friend, the Former John McCain, whom we once knew, voted with the Democrats to close the “Enron loophole” in 2002 and 2003.  His comments in the February, 2002 issue of The New Yorker told us much about how we got to where we are now, six years after he gave that interview:

Enron made a sound investment in Washington.  It did them a lot of good.  Where they really do well is around the edges, the insertion of an amendment into an appropriate bill.

McCain is no longer so strident about the sleazy origins of this “Enron loophole”.  This is probably because the loophole owes its existence to Phil Graham and his wife, former CFTC Chair, Wendy of Enron.  Phil is now McCain’s “economic advisor”, so don’t hold your breath waiting for McCain to repeat what he said to The New Yorker in 2002.  He has yet to speak out against this loophole as his new self: McCain 2008.  Nevertheless, a very loud, “hard” right-wing voice, that of Bill O’Reilly, has spoken up on this issue.  A visit to the website: http://closeloophole.org/ recites this quote from O’Reilly on his Factor show:

I want those SOBs [speculators] taken down…let’s work together to save the American consumer at the pump.

My favorite issues are those where “liberals” and “conservatives” can work together to solve the crucial problems faced by society.  It appears as though we have one right here.  If we address it, we may solve it “overnight” according to one expert.  If we do solve it, we will be helping more than the individual consumer.  We will probably save the entire roster of Russell 2000 “small-cap” companies from swirling down the toilet.  Most experts believe these companies are the hardest-hit by the uncontrolled cost of petroleum products.

For his part, Barack Obama has spoken on the record numerous times about his opposition to the “Enron loophole”.  This should come as no surprise since his fellow Senator from Illinois, Dick Durbin, is a key advocate for closing this loophole.  Obama supporter, New Jersey Governor Jon Corzine, has a bit of “street cred” on this subject, having served as the former chairman of the investment firm, Goldman Sachs.  Corzine is on the record for blaming this unregulated speculation for the outrageous pricing of petroleum products.

The American public has a notoriously short attention span.  It seems unbelievable that something this important, that erases “discretionary spending” and limits what food can be placed on one’s table, could be overshadowed by the latest celebrity scandal.  Americans must stay focused on this fundamental problem.  A visit to http://closeloophole.org/ will give you the opportunity to send e-mails to your Senators, expressing your opinion on whether our government should perform one of its most important missions:  to save us all from sleazebags.