Sen. John McCain has once against thrust the burden for solving the energy crisis on individual families in the U.S. “It has to start at home,” he said yesterday, ignoring the overwhelming evidence that it is deep ideological opposition to any regulation of speculative investment by leaders in his party which has led not only to the explosive rise in food, oil and gas prices, but to the housing mortgage crisis, as well.
Some congressional Democrats are just beginning to scratch the surface of what could become one of the biggest scandals of a scandal-ridden decade, something Republicans and the media have so far chosen to completely ignore
The scandal dates to back December 2000, when McCain economic advisor, former Sen. Phil Graham, then chair of the Senate Finance Committee, slipped in a loophole, attached to an 11,000-page appropriations bill in the wee hours of the morning during the Christmas recess.
The loophole deregulated oversight by the Federal Reserve of the commodity indexes and commodity futures markets, and the result led immediately to the worst excesses of the Enron scandal.
But it has now spilled over to the current housing bubble collapse, financed by sub-prime mortgages that were repackaged and marketed by unregulated hedge funds, and onto current exploding oil, gas and food prices.
As reported in this column three weeks ago, at a June 3 Senate Commerce Committee hearing, Michael Greenberger, former head of the Commodity Futures Trading Commission, laid out this entire unraveling of events, and insisted that if new regulations were placed onto the commodities futures markets, oil and gas prices would drop precipitously, virtually overnight.
But the major media and Republicans, alike, ignored the hearing. In ensuing weeks, however, some Democrats have begun to take up the case more aggressively. Last week, the first case of a major political campaign energy policy including reference to reigning in speculation on commodities futures came from Virginia U.S. Senate candidate Mark Warner.
Then this week, presumptive Democratic presidential nominee Sen. Barack Obama issued a four-point proposal that called explicitly for rolling back the infamous so-called “Enron loophole” slipped into law by Sen. Gramm.
“There’s too much speculation in the oil markets, and a lot of it flows directly from that particular loophole,” Obama supporter New Jersey Gov. Jon Corzine said in a conference call.
But the scandal lies not only in the secretive move to slip the loophole into the 2000 bill, but the knowing resistance to closing the loophole by Republican-led Washington ever since.
Silence, including media complicity, has been the main tactic. Beyond that, there is the unfounded threat that any re-regulation will drive investors to unregulated markets overseas. They simply won’t. They may bluff, but there’s simply too much that’s preferable in the U.S. markets, and investors know it.
It is symptomatic, in the media case, to the run-up to the war in Iraq. With his retirement announcement this week, Washington Post executive editor Leonard Downie Jr. was quoted in the Post trying to explain his failure to give more credence to critics of the invasion of Iraq prior to its occurrence. “That antenna I normally had just didn’t function well enough,” he shrugged, despite the fact that reporters “pursued some skeptical reporting about the rationale for invading Iraq.” Right.
Maybe it had more to do with Post Chief Executive Donald Graham being flanked shamelessly by top Bush administration military brass at White House Correspondents Dinners, and ordering pro-invasion editorials.
The same is true for many other crimes and scandals perpetrated by a Republican administration that has treated its tenure more like unlocking the candy store for its elitist friends than serving the public interest.
Allowing speculators to feast off of commodity futures at the expense of the average Joe trying to drive to work, keep his job and feed his family is one of the greatest abuses of power imaginable, and for the press to remain complicit by its silence is equally inexcusable.