|Contact: Gene Guilford firstname.lastname@example.org or Chris Herb email@example.com|
|For Immediate Release May 31, 2011|
WHAT THE HELL ARE THEY THINKING?
ICPA President Gene Guilford was pleased to join Mr. John Mitchell, Sr., of the Mitchell Fuel Co., and Congressman John Larson [D-CT 1st CD] in a press conference at the Legislative Office Building in Hartford this morning. Below is the text of Guilford's remarks.
On May 24th the Commodities Futures Trading Commission [CFTC] issued a statement announcing its intention to file suit against three companies it alleges manipulated the crude oil markets in 2008, yielding $50 million in illegal profits for the named defendants. I've included the CFTC statement as an attachment. The CFTC is the agency of the federal government with the responsibility to oversee and regulate the $600 trillion commodities futures markets, an agency of about 600 people with an annual budget of about $168 million.
American families lost a total of $19.4 trillion (in 2010 dollars) in household wealth from June 2007 to March 2009, when the stimulus started to take hold. First it was the housing market, and then it was the housing and the stock market together that tanked. American families lost $6.4 trillion in home value during this period.
The genesis of the Great Recession we are struggling to recover from is nested in the irresponsible and reckless behavior of the mortgage industry and Wall Street's use of derivatives.
Congress passed and the President signed into law the Dodd-Frank legislation in July of 2010 as a response to the near collapse of the nation's financial system and resulting losses of wealth by nearly every individual American and the economy and finally, the losses borne by all of us as taxpayers who needed to shore up the financial system from its worst collapse since the 1930s.
Yet, in the face of these clear and unmistakable facts, in the last four weeks we have seen two Committees of the House of Representatives vote to delay the imposition of regulations on the very financial institutions whose reckless behavior brought this nation's financial system to a grinding halt just three years ago. On May 4th the House Agriculture Committee voted along party lines to delay the imposition of regulations under Title VII of the Dodd-Frank law, the part that deals with derivative regulations at the CFTC and SEC, until December of 2012. On May 24th the House Financial Services Committee, again along party lines, to a similar delay from July of this year until September of 2012.
Neither the CFTC nor the SEC requested this delay. At a time when Americans are paying dramatically higher food and energy prices, in part due to the ruinous policy of the Federal Reserve through two phases of quantitative easing and pumping $2.3 trillion into the economy and driving the value of the dollar to its lowest value since 2008 - and as a result the rush by purely market speculators pumping hundreds of billions into speculative investments in everything from agricultural commodities to energy - the House Republicans want to slow down the very agencies whose responsibility it is to deal with the consequences of reckless speculative behavior.
What the hell are they thinking?
As the CFTC is trying to stop market manipulation that is costing the American economy billions every day, House Republicans are trying to not only slow down the CFTC by delaying its rules, House Republicans are also proposing to cut the budget of the CFTC and gut its ability to do its job on behalf of the American people.
In the last decade we have had the Enron scandal, at once the largest corporate bankruptcy in American history and perpetrator of manipulating the California electricity market costing California consumers over $20 billion in higher electricity costs. We have seen the Amaranth scandal, involving excessive speculation in the natural gas markets. British Petroleum paid the largest civil penalty every assessed by the CFTC in 2004, $303 million, when it was found to have manipulated the prices of propane, gasoline and crude oil.
The $600 trillion derivatives market is alive and well today, behaving much as it did before 2008. Let no one say we haven't suffered enough at the hands of reckless Wall Street behavior, as every American has lost trillions in personal and property wealth since 2008, and the massive unemployment that has come with it.
The CFTC has 52 key rulemakings in the pipeline, most of which will deal with excessive speculation in agricultural and energy commodities. The President wants to significantly increase the CFTC's budget and add 300 new staff so that its responsibilities to oversee these markets, end fraud and manipulation, enact position limits on non-commercial market investors, and seek the prosecution of violations can all be met. House Republicans want to cut the CFTC's budget, force staff layoffs and delay its rulemaking powers.
Gene Guilford is the President of the Independent Connecticut Petroleum Association, representing 576 Connecticut-based companies and their 13,000 employees who provide retail heating and motor fuels to Connecticut’s economy. Guilford was the Chief of Staff to the General Counsel of the United States Department of Energy during the Reagan Administration.
ICPA represents more than 576 Connecticut based independent businesses. These businesses serve more than 680,000 heating fuels consumers, employ 13,000 Connecticut citizens at the majority of our state's 1,400 motor fuels outlets and 600 heating fuels retailers. ICPA's offices are at 10 Alcap Ridge, Cromwell, CT 06416. For more information about today's Press Release, contact Gene Guilford or Chris Herb.