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 lunaticprophet rated 3 months ago - McCain Defends 'Enron Loophole'
From the page: "Sen. John McCain says he opposes the $307 billion farm bill because it would dole out wasteful subsidies, but his chief economic adviser Phil Gramm also wants to stop its proposed regulation of energy futures trading, a market that was ...
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3 Reviews
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- 7HL rated 3 months ago
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May 19, 2008--Sen. John McCain says he opposes the $307 billion farm bill because it would dole out wasteful subsidies, but his chief economic adviser Phil Gramm also wants to stop its proposed regulation of energy futures trading, a market that was famously abused when Enron Corp. manipulated California's electricity prices in 2001.
- lunaticprophet rated 3 months ago
- McCain Defends 'Enron Loophole'
From the page: "Sen. John McCain says he opposes the $307 billion farm bill because it would dole out wasteful subsidies, but his chief economic adviser Phil Gramm also wants to stop its proposed regulation of energy futures trading, a market that was famously abused when Enron Corp. manipulated California's electricity prices in 2001.
Clearing the way for that California price gouging, Gramm, as a powerful Texas senator in 2000, slipped an Enron-backed provision into the Commodities Futures Modernization Act that exempted from regulation energy trading on electronic platforms.
Then, over the next year, Enron -- with Gramm's wife Wendy serving on its board of directors -- worked to create false electricity shortages in California, bilking consumers out of an estimated $40 billion.
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[...] the presumptive Republican presidential nominee also opposes the farm bill because Gramm advised McCain that he should resist its regulatory language on the energy futures market.
Democrats have dubbed that gap in energy futures regulation the "Enron loophole," but it played a part, too, in the more recent attempt by the Amaranth Advisers hedge fund to corner the national gas market by shifting trades to the unregulated "dark markets" of the Intercontinental Exchange.
The "Enron loophole" also has become part of the debate over the soaring price of oil. Last week, a study sponsored by Sen. Carl Levin, D-Michigan, concluded that speculative futures markets were partly to blame for the surge in oil prices that have pushed gas at the pump toward $4 a gallon.
At a May 15 news conference, Levin said the skyrocketing price of oil is "not the result of supply and demand. Speculators have taken over most of the futures market."
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Gramm and Enron
The battle over the "Enron loophole" also could draw attention to McCain's dependence on Gramm as his chief economic adviser and Gramm's key role in passing legislation that let Enron trade commodities on electronic platforms without federal oversight.
In 2000, with the Republicans in charge of Congress and Gramm chairing the Senate Banking Committee, the exemption on electronic trading was approved without a Senate hearing.
Internal Enron documents, which were released in 2002, revealed that the Houston-based company helped write the legislation, which was signed into law by President Bill Clinton in December 2000.
Freed from regulatory interference, Enron then used manipulative trading practices to game the California electricity market and drive up electricity prices across the state.
While California consumers were getting fleeced, the new Bush administration shielded Enron from early accusations of market manipulation. President Bush personally joined the fight against imposing caps on the soaring price of electricity, buying additional time for Enron although the company's house of cards collapsed anyway in fall 2001. [For details, see www.Consortiumnews.com's "Bush's Enron Lies."]
- AsylumGal rated 3 months ago
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Sen. John McCain says he opposes the $307 billion farm bill because it would dole out wasteful subsidies, but his chief economic adviser Phil Gramm also wants to stop its proposed regulation of energy futures trading, a market that was famously abused when Enron Corp. manipulated California's electricity prices in 2001.
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