Democrats are pressuring the Obama Administration to limit the ability of big investment banks such as Goldman Sachs Group, Inc. (NYSE:GS) from engaging in speculating in commodities such as oil. Democrats blame oil speculators for the increase price of oil. Now the contagion has caught on and everyone believes that Goldman Sachs and Morgan Stanley (NYSE:MS) are to blame for high oil.
James Williams, oil economist at WTRG Economics, says that “anything over $80 is certainly linked to some extent to speculation”. Mark Cooper, chief economist at the Consumer Federation of America, also chimed in and said that “the American consumer is paying 75 cents more per gallon because of excessive speculation”. Yes, speculators do amplify the problem but do you honestly believe the higher oil is solely from speculators?
Speculators do not all get together at the beginning of the year and say “ok guys lets drive up the price of oil, I feel like there is going to be higher oil prices this year”. Obviously, there needs to be a catalyst for speculators to say is the reason for higher oil. In this case, Iran’s production cut of oil has hurt output numbers and they plan on making more cuts later on this year if talks stall.
According to Democrats and the two experts above, Iran has nothing to do with the rising oil because it’s the speculators fault. It couldn’t be the failed policies of the Obama Administration with dealing with Iran, no its Goldman Sachs’s fault.
I absolutely can not stand when politicians pull this kind of nonsense. The party in power fails on policy making, then blames the outcome on someone else and not taking responsibility. The fact that James Williams and Mark Cooper are essentially adding to the fire, cuts their credibility to me. As an economist of the oil market, how can you come out and say that the reason the price of oil is high is due to speculators and not even mention Iran and the Middle East in there?
Liberals need to get it together and realize that Goldman Sachs and Wall Street are not to be entirely blamed for the increased oil prices and all the other bad things in the world. Maybe next time, the government can accept that the rise in oil is more of their fault than Goldman. Instead of threatening war against Iran, maybe you should hold peaceful talks to lift the oil production cuts that are the real reason for raise in oil.