Wall Street may seem far away, but it's actually as near as your gas tank -- and as widespread as global hunger. That's the message of activists holding vigil today in downtown Manhattan to mark the release of a study that shows Wall Street speculation is driving up the price of gas -- to the tune of $41 per U.S. car owner in the month of May alone. The study, authored by two economics professors at the University of Massachusetts, Amherst, says that the average U.S. consumer paid a 83-cent-per-gallon premium in May for their gasoline purchases due to the huge rise in the speculative futures market for oil.
Those holding vigil, led by a Catholic responsible-investing group, met at the Irish Hunger Memorial in front of the New York Mercantile Exchange. It's a poetically appropriate setting: a quarter-acre of Irish countryside imported (plants, 200-year-old stone cottage, and all) to memorialize the million slain by the Great Irish Famine of the 1840s. That famine was at least partly due to natural causes -- the potato blight.
But to the extent that oil prices have risen due to speculation, that problem is entirely human-made -- and our current food system translates the rise into higher food prices which the world's poor can ill afford. Fossil fuels ship food around the globe, run machinery, and is made into fertilizer, tying oil and food prices together at every step. (Today's report covers only the results of short-term speculation, not the long-term "index funds" which are also a big part of the speculative-bubble problem).
The activists in New York today -- and at sister rallies in Boston, San Francisco, Baltimore, Cleveland, Chicago, Minneapolis, Seattle, and elsewhere -- are reminding us that there are also human solutions to the speculation problem. In fact, last summer's financial regulatory reform gave the CFTC power to limit commodity speculation, but the CFTC recently announced it won't even start doing that until the year's end.
Elizabeth Palmberg is an associate editor at Sojourners.
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