Comment Text:
I am writing to support as strongly as possible the CFTC's proposed set of rules that would limit speculation on 28 core markets, including crude oil, fuel oil, gasoline, and natural gas. In submitting this comment, I represent no organization, only my own economic interests and my very deep belief that our national interests are at stake: unless we regulate and severely limit the ability of speculators to inflate prices on commodities, we collectively are paying money that we earn in value-producing activities as a premium, an added cost, for which no value will have been added to our shared economy.
In my view, when our resources are invested in non-productive activities such as commodities speculation, the economic strength and wellness of the nation is eroded. It is absolutely the role of the federal government to prevent that erosion, to place the welfare and protection of all the people above the rights of speculators.
This proposed set of regulations advances a compelling priority insofar as economic analyses based on hard evidence have shown that commodity price inflation has caused harm to Americans individually and collectively. Per Carl Gibson at http://readersupportednews.org/opinion2/277-75/27776-focus-like-the-low-gas-prices-they-could-be-even-lower-in-2015:
"In 2011, a report from the Commodities and Futures Trading Commission (CFTC) found that a large reason for the high gas prices that summer was that oil speculators were dominating 80 percent of the market; they controlled just 30 percent of the market in the late 1990s, when gas was a little over a buck a gallon. ExxonMobil CEO Rex Tillerson and Goldman Sachs both admitted that speculation on Wall Street caused oil prices to rise by as much as 40 percent. During the record-high oil spike of 2008, Saudi Arabia told the Bush administration that roughly $40 of every barrel of oil was the result of speculators driving up the price. It’s also worth noting that unlike airlines and trucking companies, who buy oil in futures, speculators don’t actually contribute to the economy... "
Speculators not only don't contribute to the economy, they contribute to decreased employment and productivity and greater economic inequality to the extent that labor costs are often cut when other resource costs expand. While the CFTC's mission is not to redress economic inequality, it is tasked with intervening in its sphere of responsibility to promote a thriving economy and reduce impediments thereto, and a consensus of economists has coalesced to endorse the fact that increasing inequality among Americans is detrimental to economic growth and well-being, which depends on the broadest possible consumer base being empowered to spend money.
