Monday, June 23, 2008
Quick, Someone Tell Obama Congress Already Closed The 'Enron Loophole'
Yesterday, Obama announced he was targeting the so-called "Enron loophole."
It's safe to say that everyone, at least everyone that counts, now seems to agree that the Commodity Futures Modernization Act, which contained the so-called "Enron loophole," went too far. The "Enron loophole" limited regulators' oversight of electronic trading of contracts for future delivery of oil.
The Commodity Futures Modernization Act was passed by Congress and signed into law by President Bill Clinton in December 2000. That legislation was not controversial. In fact, when it was approved by the House, only four members voted against it.
Nevertheless, Congress addressed the problem in May, when it passed the farm bill. According to McClatchy's Kevin G. Hall, when Congress overrode President Bush's veto of the farm bill, it allowed a provision in the legislation to take effect that closed the "Enron Loophole." In addition, last week federal regulators announced stricter regulation on foreign exchanges that trade U.S. oil.
In yet another whopper, Camp Obama tries to tag McCain with the now closed loophole by blaming the loophole on former Senator Phil Gramm. Gramm serves as McCain's co-chairman and economic advisor. Like many of the attacks spewing from Obama's new politics, this one doesn't hold water either.
According to the Los Angeles Times, McCain's campaign supplied a copy of a letter Gramm wrote to Senator Byron L. Dorgan (D-N.D.) in which Gramm denied that the provision was a "secret maneuver" and said he had "nothing to do with the writing of the provision" on regulating energy trading.
Will this help lower the price of oil? The New York Times reports that the role speculative investment plays in pushing up oil and other commodity prices is not entirely clear:
While some analysts believe that large flows of money into largely unregulated exchanges have distorted markets and pushed up prices, most energy experts see no support for that theory. They point out that traditional market forces, like growing demand from emerging countries, and limited growth in oil supplies, can easily account for the increase in prices.
Quick, Someone Tell Obama Congress Already Closed The 'Enron Loophole'
Yesterday, Obama announced he was targeting the so-called "Enron loophole."
It's safe to say that everyone, at least everyone that counts, now seems to agree that the Commodity Futures Modernization Act, which contained the so-called "Enron loophole," went too far. The "Enron loophole" limited regulators' oversight of electronic trading of contracts for future delivery of oil.
The Commodity Futures Modernization Act was passed by Congress and signed into law by President Bill Clinton in December 2000. That legislation was not controversial. In fact, when it was approved by the House, only four members voted against it.
Nevertheless, Congress addressed the problem in May, when it passed the farm bill. According to McClatchy's Kevin G. Hall, when Congress overrode President Bush's veto of the farm bill, it allowed a provision in the legislation to take effect that closed the "Enron Loophole." In addition, last week federal regulators announced stricter regulation on foreign exchanges that trade U.S. oil.
In yet another whopper, Camp Obama tries to tag McCain with the now closed loophole by blaming the loophole on former Senator Phil Gramm. Gramm serves as McCain's co-chairman and economic advisor. Like many of the attacks spewing from Obama's new politics, this one doesn't hold water either.
According to the Los Angeles Times, McCain's campaign supplied a copy of a letter Gramm wrote to Senator Byron L. Dorgan (D-N.D.) in which Gramm denied that the provision was a "secret maneuver" and said he had "nothing to do with the writing of the provision" on regulating energy trading.
Will this help lower the price of oil? The New York Times reports that the role speculative investment plays in pushing up oil and other commodity prices is not entirely clear:
While some analysts believe that large flows of money into largely unregulated exchanges have distorted markets and pushed up prices, most energy experts see no support for that theory. They point out that traditional market forces, like growing demand from emerging countries, and limited growth in oil supplies, can easily account for the increase in prices.