Oil prices are rising again: They shot up 20 percent in the month of May and have nearly doubled so far this year. Once again, the problem is not supply and demand. “The highest supply of oil in the last 20 years is now.” says Rep Bart Stupak, a Democrat from Michigan who serves on the House energy committee. “Demand is at a 10-year low. And yet prices are up.”
Asked why politicians continue to harp on drilling and hybrid cars, when supply and demand have nothing to do with high prices, Stupak shakes his head. “I think they just don’t understand the problem very well,” he says. “You can’t explain it in 30 seconds, so politicians ignore it.”
Matt Taibbi, The Great American Bubble Machine
The prices are being driven up because in 1991 Goldman got the government to give them a special exception to hedge their commodities risk. When Michael Greenberger became head of the division of trading and asked the government to produce the papers that gave Goldman this power, they told him they had to clear it with Goldman first.
This power given to Goldman was quietly given to 14 other companies as well, leading to consumers being robbed to pay for that same energy being artificially marked up.
(via soupsoup)
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