Tuesday, March 6, 2012

Robert B. Reich: The extra dollars you're paying at the pump are going to Wall Street speculators


American Voices Tribune Media Services 

February 28, 2012

Nothing drives voter sentiment like the price of gas -- already up nearly 30 cents from the start of the year and hitting $4 in many places. The last time gas topped $4 was 2008.

And nothing energizes Republicans like rising energy prices. House Speaker John Boehner is telling Republicans to take advantage of voters' looming anger over rising prices at the pump. House Republicans have passed a bill to expand offshore drilling and pressure the White House into issuing a permit for the Keystone XL pipeline. The tumult has already prompted the Interior Department to announce expanded oil exploration in the Arctic.

If prices at the pump continue to rise, expect the gas wars to intensify.

But the current surge in gas prices has almost nothing to do with energy policy. It doesn't even have much to do with global supply and demand. It has most to do with America's continuing failure to adequately regulate Wall Street.

Oil supplies aren't being squeezed. Over 80 percent of America's energy needs are now being satisfied by domestic supplies. In fact, we're starting to become an energy exporter.

Iran is threatening to cut production in retaliation for sanctions imposed by the European Union and the United States. But Saudi Arabia's increased production is more than enough to make up the difference.

Demand for oil isn't rising in any event. Oil demand in the U.S. is down compared to last year at this time. The American economy is showing only the faintest signs of recovery. Meanwhile, global demand is still moderate. Europe's debt crisis hasn't gone away. China's growth continues to slow.

But Wall Street is betting on higher oil prices.    READ MORE
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