Thursday, June 19, 2008

Kansas and the Enron Loophole

Last Saturday, I went to a great Kansas event, Symphony on the Prairie. It is exactly that: the Kansas City Symphony takes its concert show to the Flint Hills of Kansas, and sets up outdoors, against a backdrop of rolling, lush, green ranchland, populated by cowboys on horseback, and roaming cattle against a Kansas blue sky. Unless you've been there, you cannot imagine how sweet, beautiful, and trippy this whole scene is. The evening ends with you and six thousand of your closest friends singing Home on The Range. Even the most citified transplants were in tears by this point. And you can bet that everyone who was there will vote to save the Tall Grass Prairie from anyone even thinking about destroying it.

But getting to this event required a three hour round trip, and about sixty dollars worth of gas. So if you haven't already contemplated the high price of gas (a luxury afforded only to cave-dwellers ), now would be a good time to do so. We can start with the Enron loophole.

From the Tampa Tribune, June 13th:
"In December 2000, Congress passed the Commodity Futures Modernization Act, which was signed into law by President Clinton just before he left office in January 2001.

Few people realized at the time that a loophole had been tucked into this 262-page bill at the last minute by then-Sen. Phil Gramm, R-Texas. It came to be known as the "Enron Loophole," and it allowed Enron and other large energy traders to be exempt from federal oversight of over-the-counter transactions in energy markets. . . . . . .It has allowed massive growth of unregulated trading on energy futures markets, where investors essentially "bet" on the price of oil at a certain date in the future. . . . . in the unregulated environment spawned by the Enron Loophole, speculators increasingly treat commodities as if they were stocks. These investors don't want to take delivery of the oil after they "buy" it; they just want the price to rise so they can make a huge profit. As the dollar weakens, oil becomes an even more attractive investment. . . . "

Experts in the field argue that the Enron loophole is responsible for about fifty percent of the rise in gas prices that we are now seeing. Its perpetrator, former Senator Gramm, is now John McCain's energy advisor. So it should come as no big surprise when McCain himself rallies to the defense of said loophole.

For the record, Obama voted for the farm bill that closes the Enron loophole, as did our right-wing Senators Brownback and Roberts. So what happened to Mr. Independent/ Maverick/ Straight Talk Express?

There he goes, riding off into the sunset, never to return. Cue the music.


foodboy said...

I just heard Ted Koppel, who spent 4/5 weeks in China say that China is adding 25,000 cars a day and that within a few years will have more that we do. Think of the pollution and competition for oil. They also hold about 25% of our National Dept. Better start learning Mandarin.

alicel said...

Thanks for commenting, foodboy. Sorry it's taken me so long to get back. Actually, Al Gore was on the tube today, talking about a three trillion dollar plan to expand our wind power capacity, solar capacity, etc., a project that will take 30 years. Given the rapid growth of China's automobile industry, I'd say we better get going!