President Barack Obama announced today a new proposal to help Americans at the pump by reining in excessive Wall Street speculation.
Obama’s proposals include funding for more “cops on the beat” to better monitor market activity, increasing authority at the Commodity Futures Trading Commission, raising penalties for illegal manipulation, requiring oil traders to finance transactions with more of their own money, and creating stricter penalties for illegal market manipulation.
Obama said these initiatives would prevent Wall Street speculators from artificially driving up gas prices:
We can’t afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage, and driving prices higher — only to flip the oil for a quick profit. We can’t afford a situation where some speculators can reap millions, while millions of American families get the short end of the stick. That’s not the way the market should work.
Mitt Romney, who has repeatedly blamed Obama for gas prices, slammed the one initiative that could truly ease gas prices in the short-term — unlike Republican calls for increased drilling. He called the president’s proposal a “gimmick” to “dramatically increase federal regulation.”
Romney dismisses oil speculation. But even ExxonMobil CEO Rex Tillerson admitted last year that Wall Street speculation adds as much as 50% to a barrel of oil.
McClatchy reported in March, “While tension over Iran has ratcheted up over the last few months, the price of oil and gasoline has leaped far beyond conventional supply and demand variables. Financial speculators are piling into the market, torquing the Iranian fear factor into ever higher prices.” Speculators made up 64 percent of the market last month.
Romney’s response is also out-of-step with the American public, since 54 percent want the U.S. to crack down on excessive speculation, according to a Hart Research poll. His campaign, however, is bankrolled by oil companies and Wall Street, with $750,000 from Big Oil donors and nearly $15.2 million from the financial industry.