Daily Archives: December 31, 2014

Bernie bullies the tycoons

Oh noes, the tender hearts of Wall Street have been bruised beyond healing. And the man responsible for this crime against humanity?

Bernie Sanders, of course.

Oil trading data that exposed the extensive positions speculators held in the run-up to record high prices in 2008 were intentionally leaked by a U.S. senator, sparking broader concern about industry confidentiality as Congress moves on Wall Street reform.

Senator Bernie Sanders, a staunch critic of oil speculators, leaked the information to a major newspaper in a move that has unsettled both regulators and Wall Street alike.

For those with short memories, the 2008 oil price spike immediately preceded the mortgage meltdown and near-implosion of the economy. In retrospect, the oil business may have gotten lost in the shuffle. But it was huge at the time; there were predictions that oil prices would shoot through the roof, sending many Vermonters scurrying to pre-buy their heating oil. At what turned out to be the very peak of the market.

The primary cause of that spike was not demand or global instability or exploration failures; it was the severe warping of the market at the hands of speculators. The notable non-Socialist Matt Cota of the Vermont Fuel Dealers Association put it this way in 2008:

The problem is that the trading of oil has been deregulated. And large financial players are dominating the market. A recent Washington Post article showed that 81 percent of future oil contracts are controlled by non-physical players — people who don’t own trucks, people who just trade paper.

…It’s provided volatility to a market that, frankly, is so vulnerable to volatility. We’re talking about a product that people need to get to work and to heat their homes. And for this to be used as a financial tool, so Wall Street traders can make billions, is shameful.

Shameful indeed. And now comes Bernie Sanders, revealing the extent of speculative perfidy:

“The [Commodity Futures Trading Commission] has kept this information hidden from the American public for nearly three years,” he said. “This is an outrage. The American people have a right to know exactly who caused gas prices to skyrocket in 2008.”

… The leaked data contains long and short positions held by oil traders in 2008, the same year that oil prices spiked to $147 a barrel. Critics at the time accused oil speculators of driving up prices, leading lawmakers to later insert a provision into the Dodd-Frank Wall Street overhaul law compelling the CFTC to place stricter limits on how many commodity contracts any one trader can control.

Sanders was perfectly within his rights to release the data. According to Reuters, the CFTC is legally barred from such releases, but it is bound to give information to members of Congress upon request. They are not constrained from releasing the information.

But regulators and Wall Street sharpies are worried that making the data public makes them look really bad might have “a chilling effect on derivatives trading,” according to John Damgard, the head of the Futures Industry Association.

Heavens to Betsy, I certainly hope so. Our economy would be a lot healthier and more stable if there was a lot less dicking around with futures and derivatives, and more focus on productive activity that makes stuff, creates jobs, and generates honest profits.

(Great line from Lewis Black: There should be a law that says if you have a company, and you can’t describe what it does in one simple sentence, it’s illegal.)

Sorry, Mr. Damgard. I ran a thorough self-diagnostic, and I found no trace of sympathy. Take your hurt fee-fees and go swim with the other sharks.

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Phil Scott unsubtly launches Campaign 2016

So, whatcha gonna do to celebrate The New Biennium on January 7?

Well, if you’re Lt. Gov. Phil Scott, you’re going to do what no Lite-Guv has ever done and what he specifically has never come close to doing: you’re promoting your own policy agenda.

On the legislature’s Opening Day, when all eyes are on Montpelier, Scott is hosting a pitch session for, in the words of VTDigger’s Anne Galloway,

…business people of all stripes to pitch ideas about how to rejuvenate Vermont’s economy. Each person gets 5 minutes to tell lawmakers what they could do to help businesses thrive in Vermont.

The pitch session, billed as “Priority #1 on Day One,” will be from 4 p.m. to 5:30 p.m. at the Capitol Plaza Hotel in Montpelier and will be followed by a reception.

“A reception” at which, I’m sure, donations will be cheerfully accepted.

But beyond that, Scott is spotlighting his own prescription for what ails Vermont, and making an absolutely unapologetic pitch of his own — for the support of the state’s business community. He is positioning himself as the business community’s advocate in Montpelier.

Has he ever done anything like this before? Nope.

Is there any doubt that his decisive victory over Dean Corren and the scent of gubernatorial blood in the water has awakened Mr. Nice Guy’s inner predator? Nope.

And while “business people of all stripes” are invited (bring your checkbooks!), look at the list of business groups already lined up for five-minute pitches:

Vermont Chamber of Commerce

Lake Champlain Regional Chamber of Commerce

Vermont Technology Alliance

Vermont Retail and Grocers’ Association

Vermont Businesses for Social Responsibility

Associated Industries of Vermont

Vermont Association of Chamber of Commerce Executives

FreshTracks Capital

Vermont Sustainable Jobs Fund

Associated General Contractors

Vermont Ski Areas Association

Vermont Association of Realtors

That list includes a few good guys — VBSR, Sustainable Jobs Fund, Fresh Tracks — plus all the usual business-community power brokers. Gee, I wonder what they’ll say.

Also, there are strong signs that the “centrist” forces for growth and affordability are aligning themselves. First, although Phil Scott is the headliner, the event’s sponsor is Vision to Action Vermont, the pro-business advocacy group led by outgoing Rep. Paul Ralston (D-Middlebury) and continuing Rep. Heidi Scheuermann (R-Stowe).

(Whaddya think? Scott/Scheuermann 2016, anyone?)

The latter chimes in herself in the Comments section below Galloway’s story:

This is just the beginning, we hope, of a legislative session that will have, as its primary focus, the health of our state’s economy. …Frankly, we want all to become engaged and will provide many other opportunities to do so.

Ah. A series of dog-and-pony shows designed to highlight an alternative to the Democrats’ agenda. That’s smart politics. Much better than the formulaic naysaying of past years.

Aside from V2AVT’s sponsorship, there’s also the latest manifesto from ex-Wall Street panjandrum (and co-founder of Campaign for Vermont) Bruce Lisman, echoing the affordability call from Scott and V2AVT. In Lisman’s own self-congratulatory way.

Affordability is a renewed slogan that has recently found its way into the vocabulary of Gov. Shumlin and some members of the Legislature.

Finally, the Democrats are awakening to the wisdom of Bruce Lisman!

Uncle Brucie’s version of the affordability crisis focuses almost entirely on the perceived failings of state government. There’s some truth to that, but national factors play a much bigger role. Stuff like our putrid economic recovery, decades of stagnant purchasing power among the middle and working classes, the rapid accumulation of wealth in the top one percent.

But this post isn’t about the convenient blind spots of Bruce Lisman. It’s about the fact that the forces of “centrist” Republicanism are loudly singing the same tune: Affordability, defined primarily in terms of boosting business. Not defined in terms of using government to counteract the economic forces beating down average Vermonters and help them work their way through an economy that’s rigged against them.

One other thing: all this activity is taking place without mention of, or participation by, Scott Milne. He is, after all, still running for governor, and he technically has the support of Republican lawmakers. But as usual, when it comes to planning their agenda, Milne has no seat at the VTGOP table. He is nothing more than a convenient stick to beat the Democrats with, and he will be discarded as soon as he stops being a useful tool.