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Bush, McCain, Obama ignore 3 quick fixes for gasoline prices
June 10, 2008
Kevin G. Hall - McClatchy NewspapersIssue date: 6/5/08 Section: Real News
WASHINGTON _ As gasoline prices soar to new records, America's president _ and the two men who hope to succeed him _ are offering only partial or long-term solutions and ignoring three steps that many experts say could bring some relief now.
Americans began this workweek by crossing a dismal threshold, paying a once-unthinkable nationwide record average of $4.02 per gallon Monday for unleaded gasoline and the prospect of even higher prices in months ahead.
On Monday, President Bush said one answer is to increase oil drilling in Alaska and offshore. Presumptive Republican presidential nominee John McCain's chief economic adviser renewed McCain's call to suspend the 18.4 cent-per-gallon federal gasoline tax. Presumptive Democratic nominee Barack Obama called for a windfall profits tax on oil companies.
Independent experts, however, said that government could take at least three other steps that could force oil and gasoline prices down immediately. Neither Bush nor McCain nor Obama endorse any of them.
Perhaps the quickest action, the experts said, would be ordering curbs on financial speculation. Financial industry heavyweights have acknowledged in recent testimony before Congress that such speculation is driving oil prices higher.
Pension funds, endowments and other big institutional investors are pumping big money into index funds linked to commodities, including oil, driving up demand _ and prices. The popular Goldman Sachs Commodities Index attracted $260 billion in investment last year, compared to $13 billion five years earlier.
Complicating any effort to harness that, about 30 percent of the trading in crude oil is done in "dark areas" _ markets in London and Dubai _ that aren't regulated by the U.S. Commodity Futures Trading Commission (CFTC).
President Bush could order the CFTC to regulate U.S. investments in those markets with a snap of his fingers, said Michael Greenberger, a law professor at the University of Maryland and a former director of trading for the CFTC.
Americans began this workweek by crossing a dismal threshold, paying a once-unthinkable nationwide record average of $4.02 per gallon Monday for unleaded gasoline and the prospect of even higher prices in months ahead.
On Monday, President Bush said one answer is to increase oil drilling in Alaska and offshore. Presumptive Republican presidential nominee John McCain's chief economic adviser renewed McCain's call to suspend the 18.4 cent-per-gallon federal gasoline tax. Presumptive Democratic nominee Barack Obama called for a windfall profits tax on oil companies.
Independent experts, however, said that government could take at least three other steps that could force oil and gasoline prices down immediately. Neither Bush nor McCain nor Obama endorse any of them.
Perhaps the quickest action, the experts said, would be ordering curbs on financial speculation. Financial industry heavyweights have acknowledged in recent testimony before Congress that such speculation is driving oil prices higher.
Pension funds, endowments and other big institutional investors are pumping big money into index funds linked to commodities, including oil, driving up demand _ and prices. The popular Goldman Sachs Commodities Index attracted $260 billion in investment last year, compared to $13 billion five years earlier.
Complicating any effort to harness that, about 30 percent of the trading in crude oil is done in "dark areas" _ markets in London and Dubai _ that aren't regulated by the U.S. Commodity Futures Trading Commission (CFTC).
President Bush could order the CFTC to regulate U.S. investments in those markets with a snap of his fingers, said Michael Greenberger, a law professor at the University of Maryland and a former director of trading for the CFTC.
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