Don't know much about economics--Obama 2.0

NY Times:

Senator Barack Obama on Sunday proposed tightening the regulation of oil speculators in an effort to ease record high gasoline prices and address one of Americans’ top concerns.

Mr. Obama proposed closing the so-called Enron loophole, a legal provision requested by that company in 2000 that exempts crucial energy commodities from government oversight. He also proposed preventing traders of American crude oil from routing transactions through offshore markets to evade American limits and working with other countries to better regulate oil-futures markets, and he called on the Federal Trade Commission and the Department of Justice to investigate market manipulation and oil futures.

“My plan fully closes the Enron loophole and restores common-sense regulation,” the senator said in a campaign statement.

How large a 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.

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Speculators are just another scapegoat for Democrats to avoid responsibility for strangling the supply of energy in general and oil and gas production in particular. Democrats are OPECs best friend making sure that no new US supply comes on line to compete with them.

What speculators do is permit suppliers and buyers to plan. They can have a predictable assumption to work with when forecasting future production and sales. If you did away with them the market would be much more volatile.

Free up production and the new supply will lower prices. It works every time and Democrats still have not been able to repeal the law of supply and demand.