Chris Hayes writes in The Nation that gas prices might be a defining factor in Obama's re-election. Anyone doubting that just needs to cast their memory back to 2008 when the call for a repeal of the gas tax became a signature issue for John McCain in tackling the nation's gas woes.
Hayes points out that then, as now, speculation played a huge role:
In the wake of the price explosion in the summer of 2008, a bubble that extended to all kinds of commodities, including copper and wheat, a number of observers from George Soros to Hedge Fund manager Michael Masters to former Commodities Future Trading Commission staffer and derivatives expert Michael Greenberg concluded that the underlying supply-and-demand fundamentals couldn't account for the sharp rise in prices. In the first six months of 2008, U.S. economic output was declining while global supply was increasing. And even if supply and demand were, over the long run, pushing the price of oil up, that alone couldn't explain the massive volatility in the market. Oil cost $65 per barrel in June 2007, $147 a year later, down to $30 in December 2008 and back up to $72 in June 2009.
Speculation is as old as America -- remember the gold rushes of the 1800s? But in an era of tightening belts and calls for reining in spending and deficits and figuring out how to put more in the average American's pocket, something's gotta give. Speculation can put liquidity in the market but not at the expense of the American consumer. It's time to put it in check.
Both the Commodities Exchange Trade Act and the Dodd-Frank bill called for the Commodities Fair Trade Commission to put limits on speculation. Two out of the three members of the commission support it, while one, a Democrat, who's up for replacement is hesitant. Bringing in a reformer now may be a key to lower gas prices in the future and, according to this Nation piece, a political win for Obama in the 2012 presidential election.
