We applaud the Commodity Futures Trading Commission (CFTC) for publicly acknowledging what most educated observers have been saying for months: Wall Street speculators are reaping unconscionable profits by exploiting and manipulating the unregulated energy trading markets.
Commodity traders have pushed oil prices far higher than what can be explained by basic supply and demand. Under mounting pressure from Congress, the trading commission announced this week that it has been investigating oil trading practices for the past six months.
Forgive us, however, if we remain a bit cynical. We can’t get too excited about the trading commission doing exactly what it’s supposed to do, which is to investigate irregularities in the futures market. Its announcement is similar to the local Fire Department putting out a statement that it is now going to start responding to fires.
It’s not difficult to trace the root of today’s crisis. It was the deregulation of the energy trading markets – pushed through Congress in 2000 at the behest of Enron by its political allies – that has allowed oil companies and financial firms to manipulate prices with little regulatory oversight.
The timing of the CFTC announcement makes us question the trading commission’s sincerity. Why did the commission wait to speak up until after the Memorial Day holiday, when gas prices have been growing exponentially?
What is yet to be seen is whether the CFTC will aggressively root out wrongdoers, issue subpoenas and hold traders accountable by pursuing stiff civil and criminal penalties. We are also concerned that the commission’s investigation may focus solely on large, institutional investors and ignore the actions of oil companies and producers.
It is well past the time for the Bush administration and federal regulators to step in and end this frenzied, free-for-all in the energy futures markets. American consumers have suffered far too long. They need real, immediate solutions to this energy crisis and not mere lip service.