It’s worthy of an early-day Mack Sennett film, the farce going on in Washington these days, as everyone from the president on down tries to see who can put on the biggest show of concern and/or outrage about high gasoline prices.
It’s as if they all had a simultaneous Road to Damascus experience and realized the petroleum sky was falling. Democrats are blaming Republicans, Republicans are blaming Democrats, and everyone’s blaming Big Oil, which in the past quarter set another record for profits — some $16 billion collectively.
They’re all trying to one-up each other to posit remedies, knowing full well it’s so much malarkey and that there’s precious little the president or Congress can do to rein in prices now in the $3 per gallon range and predicted to hit $4 or more ere the summer’s out.
The reason? Gasoline/diesel prices are directly tied to the price of crude oil, and there’s not a blessed thing they can do to significantly affect the price of crude.
That price is determined in the international marketplace — on the New York Mercantile Exchange, and on electronic exchanges such as the InterContinental Exchange. While NYMEX transactions are subject to an audit trail and federal regulations governing commodity trading, the electronic exchanges are largely unregulated and there is little in the way of a paperwork trail. It’s estimated that 80 percent of the world’s energy commodities are traded on these unregulated exchanges, and it’s anybody’s guess who’s doing what, whether the markets are being manipulated, or whether transactions are on the up and up.
So, it’s mostly saber rattling when the president says there needs to be an investigation to see if there is market manipulation. When 80 percent of the energy markets operate as pretty much a secret club, the potential for manipulation and fraud certainly exist. With the untold billions of dollars in their coffers, what’s to keep a Saudi Arabia or other OPEC member country, or the oil cartels they control, from manipulating markets to rake in even more billions?
Several senators have introduced legislation to increase accountability and transparency in energy markets. “The days of Enron taught us the painful lesson that fierce market manipulation does happen,” says Sen. Maria Cantrell, D-Wash. “We can’t protect consumers, businesses, farmers, or anyone from price gouging without transparency.”
However noble that goal, or however silly other proposals (giving every taxpayer a $100 rebate check), all the yammering by our leaders about price gouging is just so much grandstanding.
The handwriting was on the wall 40 years ago when the Arab oil embargo literally brought this nation to its knees. But instead of having the resolve to do whatever necessary to free ourselves from the petroleum yoke, and sticking to it (as Brazil did), four decades later we’re no better off (worse, in fact).
We’ve fiddle-faddled around, ignoring the monster under the bed, and now that the ogre’s flexing its muscles, all our leaders can do is play the blame game.
That the mightiest nation on the face of the earth should have failed for 40 years to effectively deal with the problem is blame enough.