Today’s lead story in The New York Times is titled, “U.S. Weighs Curbs for Speculators in Energy Trades.” It describes new attempts by federal regulators to control traders in markets for oil, gas and other energy commodities. These new rules are being implemented by the executive branch using President Obama’s existing powers, and they will include limits on volume of trading as well as increased disclosure requirements.
Apparently, speculative activity has been responsible for wild swings in the price of a barrel of oil, with a direct result on the prices that consumers pay at the gas pump. Oil prices rose to a record high of $145 a barrel last summer, then sank to $33 a barrel in December. The current level is about $60.
In my opinion, it’s refreshing to see President Obama reverse some of the trends of the Bush administration and its laissez-faire attitude toward the business world. Tougher requirements for banks, hedge funds and credit card companies have all been instituted under his watch. At last, the exploitations of the rich and powerful are being reined in by increased oversight and anti-trust regulations.
The problem is not interference with markets or even capitalism, as some would suggest. It’s stopping attempts at economic manipulation for the benefit of a very few corrupt players and insiders. And that’s good reason for average Americans to celebrate.
The lead article in today’s New York Times is titled, “Obama Opposes Trade Sanctions in Climate Bill.” It describes the recent legislation approved by the House, the chances of similar action by the Senate, and the opposition of President Obama regarding one provision of the proposed bill.
The item in question was crucial to the success of the legislation as it was added to secure approval from members of the House with a large manufacturing base in their district. It was designed to ensure that U.S. industries were not placed at a competitive disadvantage compared to other countries without similar energy efforts.
In my opinion, President Obama is correct in his opposition because economic tariffs represent an inefficiency and impediment to global trade. For anyone who has taken Economics 101 in college, it is easy to graph the negative impact of tariffs for all parties involved, compared to relying on free market forces.
As to the Republican opposition, well, let me quote the article directly:
“… But he [President Obama] expressed scorn for the Republicans who fought the bill in the House. He noted that some of them had predicted political doom for those who voted for it, recalling the 1993 battle over an energy tax that failed and helped Republicans gain control of the House a year later.
“Those Republicans ‘are 16 years behind the times,’ he said, comparing their position to that of Republican leaders in the energy and health care debates of the early Clinton years.
“‘They’re fighting not even the last war,’ he said. ‘They’re fighting three wars ago.’”
