One of the accomplishments achieved by congress in the aftermath of our 2008 financial meltdown was empowerment of the Commodities Futures Trading Commission to put limits on futures speculation. This is one of the few ways our government has to keep oil prices, and food prices, from being driven up to the point that it imperils our society’s basic functions.
By driving prices up, futures traders of course make profits as the consumers are forced to pay through the nose for the necessities. When food riots break out in other countries, we recognize that populations faced with starvation are fighting back. When our gas to get to work and the store goes out of sight, we have not yet begun to see that profit motives are at work against our basic societal needs.
When the society received its shock and awe portion in the financial meltdown, government agencies were scrutinized carefully and the lack of regulation that let financial entities damage the rest of the economy was recognized, and measures were enacted to prevent that happening again. Now, those measures are being counteracted by the congressional right wing in its attempt to make this administration fail.
One way to attempt to constrain these volatile mini-bubbles is for the Commodities Futures Trading Commission to impose “position limits,” essentially limits on the size of the bets that speculators can make. The New Deal–era Commodities Exchange Act gives the CFTC power to curb “excessive speculation,” and the just-passed Dodd-Frank bill explicitly calls for the CFTC to promulgate position limits.
Not surprisingly, the big Wall Street banks like Goldman Sachs don’t want this, and the two Republican members of the commission don’t favor any position limits rules with real teeth. To his great credit, CFTC Chairman Gary Gensler (a former Goldman banker I was quite critical of when nominated to the position) has taken a strong leadership position in advocating strong limits, and Democratic commissioner Bart Chilton has been supportive as well. That leaves the deciding vote in the hands of Democratic Commissioner Michael Dunn, who’s expressed misgivings.
Now, it just so happens Dunn’s term is up in June and last night MSNBC’s Ed Show reported that the White House has begun vetting his replacement. This may seem obscure and technical, but given the precariousness of the recovery and political explosiveness of gas prices, nominating a replacement enthusiastic about reigning in excessive speculation may be the single most important decision the White House makes between now and Election Day.
In their conversation on The Ed Show, Chris Hayes was optimistic that success would be reached by making a public spectacle of the appointment, which is no doubt going to be obstructed by the wingers in hopes of hamstringing this administration. In light of the amount of gullibility and willful ignorance that the electorate showed in the last midterm election, I think he’s simply whistling in the dark.
Without an informed electorate, the obstruction of law and functional government has proved weaponry enough to defeat the public and its interests. Until either the public has suffered more than it can bear and refuses to allow further injury, or informed voting breaks out, the prospects for a functioning system of law are bleak.