Wednesday, February 29, 2012

Leap Day: life out of balance

This is what we can expect this summer
The fact that we have a Leap Day every four years is proof that time is an illusion.

Same for the reason in the recent run-up in gas prices. 

The average price in Oregon for regular gas, according to AAA, is $3.92 per gallon. Last year at this time it was $3.47. 

By the way, in self-serve California, the current average price is $4.32 per gallon. 

At this rate, we'll be over $5 a gallon by Memorial Day, which would smash Oregon's all-time highs of $4.89 per gallon during the summer of 2008 when GW Bush was still roaming around the White House.

We hear the usual blather about conflict in the Middle East, problems at refineries shifting over to summer fuel, rejection of the Keystone pipeline and, according to GOP candidates, it's all President Obama's fault.

Of course, we now know that excuses for high gas prices, by and large, are hogwash. 

As Bernie Sanders, the Independent senator from Vermont, notes in this op-ed piece, Wall Street speculators are taking money out of the pockets of almost every American. 

He points out that "the demand for oil in the U.S. is at its lowest level since April of 1997."

Also, we're now a net exporter of refined oil products for the first time since 1949. 

So what gives? Why are gas prices so damn high? Is Big Oil to blame?

Sanders writes: "Sure. Partly. Big oil companies have been gouging consumers for years. They have made almost $1 trillion in profits over the past decade, in part thanks to ridiculous federal subsidies and tax loopholes. 

"But there's another reason for the wild rise in gas prices. The culprit is Wall Street. Speculators are raking in profits by gambling in the loosely regulated commodity markets for gas and oil. A decade ago, speculators controlled only about 30 percent of the oil futures market. Today, Wall Street speculators control nearly 80 percent of this market. Many of those people buying and selling oil in the commodity markets will never use a drop of this oil. They are not airlines or trucking companies who will use the fuel in the future. The only function of the speculators in this process is to make as much money as they can, as quickly as they can."

The other function of speculators is to act as "the invisible hand" to crush the marketplace. 

The amazing thing about capitalism is that it needn't fear any other ism from dethroning it as the de facto  economic model of the world. 

As we saw with the Wall Street meltdown in 2008 and that we're now seeing with the manipulation of the oil futures market, capitalism is perfectly capable of destroying itself.

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