Subject: Reserving the Market for the Politically Connected
Date: Fri, 13 Apr 2012 14:25:05 -0400
Re: The High Cost of Gambling on Oil
It is clear that former U.S. Congressman Joseph P. Kennedy II knows little about how markets work, nor does he care. According to Mr. Kennedy, the state has the right to allow who may and who may not participate in markets. I refer to his call to ban what he calls "pure" speculators from the oil market, claiming that such a ban would "drive down the price of oil by as much as 40% and the price of gasoline by as much as $1 a gallon." Of course, this is nonsense, and nowhere in his article does Mr. Kennedy attempt to justify his claim by reference to economic theory. Mr. Kennedy admits that he "...started buying and selling oil more than 30 years ago for my nonprofit organization...". Can it be that recently he has been outmaneuvered by more astute speculators and simply wishes to eliminate competition?