In his $52 million plan to increase oversight of the oil markets, President Obama is proposing a tenfold increase in the maximum civil and criminal penalties that can be applied for oil-market manipulation.
The attached link shows an initiative which has merit that will be lost in cries of election year politics. In truth for some time the Attorney General has been tasked with determining to what extent gas price manipulation was effecting prices. According to Matt Taibbi in his book Griftopia a few “powerful actors determined to turn the once solid market into a speculative casino” He says that players like Goldman persuaded pension and hedge funds to invest in oil futures which transformed it into a bettable entity like a stock as opposed to a commodity. According to Taibbis research between 2003 and 2008 the amount of speculative money in commodities grew from 13 Billion to 317 Billion and by 2008 a barrel of oil was traded 27 times before it was actually delivered and consumed. This reality will be clouded in Republican cries of too much regulation and Democrat cries of fat cat practices. A Congressional inquiry into these matters and whether there is a demonstrable effect on prices is in order. If there is, then regulation is good and greed is bad and that transcends petty politics.
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