The host of the popular Fox News program, "The O'Reilly Factor,"
has taken to bashing
"speculators" as villains:
Speculators bet that oil prices will go higher, and if
they do, they sell the paper to concerns that will actually take
the oil. If prices go lower, the speculators lose their money.
But get this. The speculators don't have to pay cash to buy the
paper contracts. They use credit, so it is easy to play this Las
Vegas-type game.
Now, every time the speculators bid up the paper price of an oil
barrel, companies like Shell and Exxon Mobil raise the price of gas
at the pump, justifying the increase by pointing to the paper
price.
That's why the price of gas is rising so quickly in the USA.
Speculators gamble, and big oil goes along for the ride. But when
the paper price of oil drops, the pump price often does not because
the speculators can always bid the price up again. So the oil
companies just wait.
This is obviously a rigged game, and working Americans are getting
hurt big time.
This "rigged game" is called capitalism, Bill. It ill
behooves a man who
earns $9 million a year to badmouth the free market -- another
rich ignoramus like those liberal Hollywood blowhards O'Reilly
rightly scorns.
The fact that speculators borrow money to buy futures does not
mean it's "easy to play this Las Vegas-type game." Lenders have to
evaluate the risks involved, just as they evaluate the risks of
giving you a loan to buy a home or a car. And if the speculator
goes bankrupt, he's not going to get any more credit, so he's out
of the game.
If some economics grad student needs a dissertation topic, let
me suggest deconstructing the populist idiocy of O'Reilly's
"Talking Points Memo."
UPDATE: Apparently, Obama's
following O'Reilly's lead, calling for a "crackdown" on
speculators.
topics:
Economics, Hollywood, Oil
