In remarks that sounded tailored to annoy the "drill, baby, drill" crowd, President Barack Obama said on Tuesday that no amount of domestic production would wean America off foreign oil, but that avoiding another Enron-like situation would.
While the White House's own fact sheet gives the best rundown of the president's plan to crack down on oil market speculators (including hiring more "cops on the beat," investing in better equipment, and making energy traders pony up their own money), CNN Money offers the most succinct explanation of how market manipulation drives up prices: Those who argue for that point "say the amount of oil traded in futures contracts greatly exceeds the amount of actual oil available, and that the bets on higher prices made by index funds are a self-fulfilling prophecy."
The United States can't control political instability in oil-producing nations, it can't control demand in China and India, all of which Obama cited as factors raising gas prices. But what it can control is its own set of regulations on oil traders operating here. More and better enforcement of speculators will bring down prices, the president said. “We can’t afford a situation where speculators artificially manipulate markets," he said. "For anyone who thinks this can’t happen, think back to how Enron artificially manipulated the market for electricity to drive up prices." It may have gone out of business years ago, but you can't beat Enron for a bad-business boogie man.
This article is from the archive of our partner The Wire.