#1 Enron's shadow cast over 2008 elections.
Posted: Mon Jun 23, 2008 10:15 am
Enron is a symbol of what went horribly wrong with regulation with the GOP in charge. For those that could use a refresher, the whole tangled mess came from a loophole formed in December 2000, which created what was effectively a parallel to the regulated, overseen CTFC markets for futures in energy.
The effect on California is well documented. Propose to sell power down an already near-capacity line, have people scramble to try and buy the capacity back down, reap huge profits to divert the energies down other lines. Manufactured blackouts and brownouts(Effectively supply shortfalls), and so forth.
Enron has collapsed under the weight of dishonesty, accounting bullshit, and so forth, but the shadow's still here, specifically in the Presidential candidates.
For those wondering about that December 2000 loophole, the man behind it in the Congress was Texas Senator Phil Gramm, tacked on a 262 page amendment(!) onto a massive government reauthorization bill on December 15th, hours from the Christmas Break. With it's normal boredom, the Clinton Congress signed off, went home, and watched the nonsense of the Florida recounts. Phil Gramm's present work is as McCain's economic advisor.
So is anyone surprised that unregulated, unwatched oil Future-Likes(Technically, the Over The Counter energy market does not sell futures, but the contracts sold back and forth without disclosure have the same basic function.) are now being brought up in a race where 4 dollar gas is an issue?
Thought not.
Link
The dark side to all this is that the 2000 amendment doesn't care where the energy is coming from. They can speculate as easy on nuclear power and solar film derived power as they do now on oil.
If anyone has actual numbers on the amount of oil future-likes being traded over the counter, I'd love to see them.
The effect on California is well documented. Propose to sell power down an already near-capacity line, have people scramble to try and buy the capacity back down, reap huge profits to divert the energies down other lines. Manufactured blackouts and brownouts(Effectively supply shortfalls), and so forth.
Enron has collapsed under the weight of dishonesty, accounting bullshit, and so forth, but the shadow's still here, specifically in the Presidential candidates.
For those wondering about that December 2000 loophole, the man behind it in the Congress was Texas Senator Phil Gramm, tacked on a 262 page amendment(!) onto a massive government reauthorization bill on December 15th, hours from the Christmas Break. With it's normal boredom, the Clinton Congress signed off, went home, and watched the nonsense of the Florida recounts. Phil Gramm's present work is as McCain's economic advisor.
So is anyone surprised that unregulated, unwatched oil Future-Likes(Technically, the Over The Counter energy market does not sell futures, but the contracts sold back and forth without disclosure have the same basic function.) are now being brought up in a race where 4 dollar gas is an issue?
Thought not.
Link
McCain's feeble 'No, I'M THE ONE DOING THIS' is as bad as 'Change You Can Believe In' in front of a lime-green background. He hired the guy who presumably authored the amendment(At least, his is the name on it. He claims not to have wrote it, but that mostly leaves the answer being 'Enron wrote it'.), he voted against the last attempt to close in in the Farm Bill, and he never mentions the loophole in his energy plans.Sen. Barack Obama rolled out a proposal yesterday to curb speculation in energy markets, which his advisers said would help stabilize soaring gasoline prices.
The presumptive Democratic presidential nominee laid out a four-step program that would, among other things, close an "Enron loophole" that protects some trading in energy futures from federal oversight, his advisers said.
"I think everyone believes there's too much speculation in the oil markets, and a lot of it flows directly from that particular loophole," New Jersey Gov. Jon S. Corzine (D) said on a conference call hosted by the Obama campaign.
The three other components of the plan, as described by Obama economic adviser Jason Furman, are to ensure that U.S. energy futures cannot be traded in offshore, unregulated markets; to work toward international regulation of oil futures markets, in cooperation with like-minded countries; and to have both the Federal Trade Commission and the Justice Department investigate the oil markets.
As gas prices have shot above $4 per gallon, energy policy has taken center stage in the campaign. Both Obama and the presumptive Republican nominee, Sen. John McCain, have proposed plans to ease the crunch for consumers. McCain last week reversed his opposition to offshore oil drilling; he has also supported giving consumers a "holiday" from paying federal taxes on gasoline.
The McCain campaign said yesterday that Obama is mimicking McCain on the gas loophole.
"The truth is Barack Obama is following John McCain's lead to close a Wall Street loophole that was signed into law by President Bill Clinton," McCain campaign spokesman Tucker Bounds said in a statement. "John McCain has supported bipartisan efforts to close this loophole and will work to address abuses in oil speculation."
The dark side to all this is that the 2000 amendment doesn't care where the energy is coming from. They can speculate as easy on nuclear power and solar film derived power as they do now on oil.
If anyone has actual numbers on the amount of oil future-likes being traded over the counter, I'd love to see them.