From the Wonk Room.
Yesterday, the Center for American Progress Action Fund's Dan Weiss stood up for working American families as CNBC host Trish Regan and two other guests defended unlimited oil speculators. They dismissed any notion that the wild price swings in the oil market harmed anyone, and scoffed at the idea that the oil markets need reform. Regan scorned an independent report that found unrestrained speculation by investors uninvolved in the oil market caused the 2008 bubble:
Guys, welcome to all of you. According to this report, in the five months from January to May traders poured $60 billion into the commodities market and basically per the report they caused a big spike in oil prices. My question to you is, Dennis, well, so what? So what? They invested in oil, oil went up. What's wrong with that?
Futures speculator and promoter Dennis Gartman replied, "Well, there's nothing wrong with it." Infectious Greed blogger Paul Kedrosky called market reform "insidious."
As Weiss tried to explain over the rolled eyes and scoffing laughs of the other guests, the oil price spike caused real harm to American families, especially as health, education, housing, and food costs simultaneously rose -- also in part due to speculators gone wild in those markets -- while incomes declined and jobs were lost.
Today, the Commodity Futures Trading Commission released a report recommending specific improvements to commodities markets to eliminate the swaps loophole that encourages risky bets that inflate speculative bubbles. The report also found that trades involving outside speculators ("noncommercial traders") surged from 10 percent in 2000 to 40 percent by 2008. Sen. Dianne Feinstein (D-CA) said all of the commission's recommendations "should be implemented immediately."