Forcing Up Gas Prices to Cost Obama Re-election

Superhuman effots by congressional repugs haven't been enough to stop the economic recovery, much less tank it completely. So what's left? Spiking gas prices, of course. That will bring the recovery to a screeching halt and piss off voters at the same time - it's a win-win!

Zandar doesn't say it in so many words but I will: the same people who are bankrolling Mitt Romney and the repug Super Pacs are speculating in the oil markets to force up gas prices this summer and thus sabotage President Obama's re-election campaign.

Good ol' West Texas Intermediate has been hanging around the $100 a barrel mark for quite some time now, but the real issue is gasoline prices have hit the $3.50 average well before the summer driving season. What's driving the price up? It sure as hell isn't demand.

Strangely, the current run-up in prices comes despite sinking demand in the U.S. “Petrol demand is as low as it’s been since April 1997,” says Tom Kloza, chief oil analyst for the Oil Price Information Service. “People are properly puzzled by the fact that we’re using less gas than we have in years, yet we’re paying more.”

Kloza believes much of the increase is due to speculative money that’s flowed into gasoline futures contracts since the beginning of the year, mostly from hedge funds and large money managers. “We’ve seen about $11 billion of speculative money come in on the long side of gas futures,” he says. “Each of the last three weeks we’ve seen a record net long position being taken.”

Somebody's making huge bets that gas prices are going to be through the roof, so much so that hey, gas prices are going through the roof. Record long futures this early in the year when demand is at a 15-year low seems like a lousy bet on paper, but a lot of people are betting a lot of money that the country will have to deal with $4.50 a gallon soon. And lo and behold, up goes both crude and gas as the long money becomes a self-fulfilling prophecy. All canoodling aside in the Straits of Hormuz, this is very much looking like what happened in 2008.

Funny how that works.

President Obama and the Democratic Party need to get out in front of this right now: expose the speculators, explain what they're trying to do, condemn them and then take whatever executive action is possible to thwart them.

Today.

Speculating Kochs to Blame for High Gas Prices

Matt Taibbi has already documented how commodities speculation, unleashed in 1999, led to both the housing bubble and to the Wall-Street-caused economic crash of 2008, from which we continue to suffer.

Any surprise that commodity speculation is behind our recovery-killing gas prices, too?

karoli at Crooks and Liars:

Lee Fang has been on a roll lately with his expose´ of the Koch empire and the various tentacles of the Kochtopus. But his latest may be the one with the most pain attached. It seems that not only does Koch Industries avail itself of the profit-taking available by speculating on oil prices, but they were the authors of the whole damn scam.

Writing on his political blog, an attorney working for Koch’s law firm angrily replied to our initial investigation by claiming that Koch is solely a bonafide hedger, meaning that it only participates in speculative markets to reduce risk for the oil the company refines (he also bizarrely argued that speculation has no relation to the price of oil). The spin obscures reality: much of Koch’s oil trading business is actually akin to a hedge fund, buying and selling financial products based on oil with little interest in the actual delivery of the product. In fact, Koch pioneered the risky speculation industry that dominates the world’s oil markets today, first by inventing oil derivatives back in the ’80s, then by working to kill off regulations. ThinkProgress has delved into the history of Koch’s oil speculation business and the following timeline spells out Koch’s leading role:

Read the rest

The timeline is particularly interesting. In a nutshell, the very first oil derivatives were born in 1986, during the Reagan presidency. With the help of Phil Gramm in the Senate, and his wife Wendy Gramm, oil speculation was deregulated and the Kochs were laughing all the way to the bank. Wendy deregulated oil derivatives on the very last day of the George HW Bush administration, just before Bill Clinton took the oath of office.

This is so representative of how Republicans and their corporate masters conduct themselves. In public, they cry out about how rotten government is while in private they work hard to create proof for their claim, with voters' help.

Rick Perlstein wrote a great article recently about the corrupt media and how it has evolved into one that not only overlooks right wing lies; it actually perpetuates them. As I considered that article against the revelation that the Kochs were the architects and authors of oil speculation, I heard all the various "pain at the pump" stories echo through my head. They didn't come only from Fox News. They were on ABC, NBC, CBS, MSNBC, and CNN.

Not one of them paid more than a casual nod to speculators' dirty business and the effect on gas prices. Not one. Instead we get garbage like this Washington Post headline, "wondering" whether President Obama is intentionally driving up gas prices (the author answers the question with a big "no", but the link bait was enough). Or we get Rick Santorum whining that it's all that mean Democrat's fault that we're paying more at the pump, and the media just nods and drools while writing it all down on their little notepads.

While I give Lee Fang a ton of credit for the outstanding work he's doing unmasking the Kochs' malfeasance, where is our media in this? When do they start to do even a modicum of investigative reporting. For that matter, why the heck isn't Andrew Breitbart all over it, now that he thinks he has been forever inducted into the "legitimate media" category?

And what are we going to do about it? That's really the question.

Here is Down with Tyranny's take, including Sen. Bernie Sanders' bill to cut costs to install 10 million solar roofs.

Have you talked to your Democratic neighbors today?