Taking advantage of the ironic juxtaposition of the Irish Hunger Memorial park in front of the New York Mercantile Exchange (NYMEX), a group of faith-based and hunger organizations held a vigil today to draw attention to the problem of excessive speculation in commodity markets. In the same way that the Irish potato famine was caused not only by natural causes but also bad public policy, organizers of the event pointed to the important role that the deregulation of commodity markets and resulting excessive speculation have had on food and gas prices in the past decade. Much of that excessive speculation takes place at the NYMEX.
The groups also released a new report entitled “How Speculation is Affecting Gasoline Prices Today” authored by Robert Pollin and James Heintz with the University of Massachusetts, Amherst. The study reveals that $0.83 of the price of a gallon of gasoline is due to excessive speculation in commodity markets. The study clearly connects speculation and rising gas prices. Not just gas prices are rising, however. Government officials and commodity market experts agree that unregulated speculation has caused food prices to rise, leading to recent food crises.
The vigil was part of a national day of mobilizations calling attention to the problem of excessive commodity speculation. Protests and other events took place in Wilmington, DE; Boston, MA; San Francisco, CA; Baltimore, MD; Cleveland, OH; Chicago, IL; Portland, OR; Minneapolis, MN; and Seattle, WA, among other cities.
Organizers of these events call on the CFTC to implement financial reforms with urgency.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed by Congress and signed into law by President Obama gave special priority to placing limits on commodity speculation. While the bulk of the law was to be implemented by July 2011, Congress specifically said that speculation limits in commodity markets should be set into place by January 2011. Yet, not only have these limits not been put in place, but CFTC commissioners now say that they may not implement the law until the end of the year.
This lack of action has driven members Congress to call for the Administration to act more quickly. Senator Bernie Sanders has called for CFTC commissioners who are not willing to implement the law to be removed and replaced and Senator Maria Cantwell has repeatedly called on the CFTC to act. Some Representatives now talk in Congress of specifically targeting commodity indexes for stronger reforms because of their especially detrimental effect on commodity markets.
Maurice Hinchey and seven co-sponsors have proposed a bill that would “require the Chairman of the Commodity Futures Trading Commission to impose unilaterally position limits and margin requirements to eliminate excessive oil speculation, and to take other actions to ensure that the price of crude oil, gasoline, diesel fuel, jet fuel, and heating oil accurately reflects the fundamentals of supply and demand, to remain in effect until the date on which the Commission establishes position limits to diminish, eliminate, or prevent excessive speculation as required by title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.”
Every day that the CFTC delays in implementing the financial reforms ordered by Congress and the President is another day of needless hunger and suffering for millions of people around the world.