realreform commented on the blog post Obama Budget Proposes Privatizing Tennessee Valley Authority
a few thoughts on TVA from a 2009 post
TVA came into existence on May 18, 1933 when President Roosevelt signed the Tennessee Valley Authority Act.
A little about the TVA quoted from the good people at Wikipedia:
The Tennessee Valley Authority (TVA) is a federally owned corporation in the United States created by congressional charter in May 1933 to provide navigation, flood control, electricity generation, fertilizer manufacturing, and economic development in the Tennessee Valley, a region particularly impacted by the Great Depression.
A little about the region in the 1930s again from Wikipedia:
“Even by Depression standards, the Tennessee Valley was in sad shape in 1933. Thirty percent of the population were affected by malaria, and the income was only $639 per year, with some families surviving on as little as $100 per year. Much of the land had been farmed too hard for too long, eroding and depleting the soil. Crop yields had fallen along with farm incomes. The best timber had been cut, with another 10 percent of forests being burnt each year. Much of the population were living in conditions that would be similar to present-day developing countries. “
Let there be no mistake about it, the public debate about the plight of the people in the Tennessee Valley and creation of TVA was as loud and acrimonious as the current one we are having about health care.
Again from Wikipedia:
On the left: “Many believed privately owned power companies were charging too much for power, did not employ fair operating practices and were subject to abuse by their owners (utility holding companies), at the expense of consumers.”
On the right: “On the other hand, there were economic libertarians who believed the government should not participate in the electricity generation business, fearing government ownership would lead to the misuse of hydroelectric sites.”
The proof of the pudding is in the eating or so they say and the results for the TVA experience has been a success and it will serve as a good model for the delivery of health care for the U.S. In the past 76 years the middle south has gone from the grinding poverty of the third world to leading this country in many areas of endeavor including development of the Saturn rocket for the Apollo program in Huntsville, Alabama and the development of atomic energy at Oak Ridge, Tennessee.
Currently the TVA provides some of the best electricity rates in the country and it has done so without driving private utility companies from the market. Witness Alabama where TVA system supplies northern part of Alabama and Alabama Power (part of the Southern Company) serves the southern part of the state. The TVA, created and funded by the federal government has been independent and self-sustaining since 1959. Yes that’s right the TVA hasn’t received any assistance from the government for the past 50 years.
here is the link
realreform commented on the blog post As Weather Forecasters Predict Continued Drought, Goldman Cashes In
realreform commented on the blog post As Weather Forecasters Predict Continued Drought, Goldman Cashes In
this link might help give you a better understanding of the
current state of our commodities markets
links to this and other testimony before congress on this subject are available here under the GORY DETAILS section
This link provides a crude estimation of the cost of commodities
speculation just in the WTI and Brent crude oil markets.
Correspondingly, I view this sort of speculation as benign, by bankster standards.
When you begin to realize the enormity of this problem I believe that you will change your mind concerning its benignity.
Many many thnx David
Your writings, especially on financial matters have been as candle in the dark to me.
good luck in your future endeavors
What the hell should we do now?
This is the rhetorical question facing the Net Roots community.
The progressive movement must back something that will change the political narrative and move the President to finally choose between main street and Wall Street. The idea must be simple and have a meaningful and effective message that will have broad appeal across the entire political spectrum. It must involve some action on the President’s part that will show that he has finally decided to act instead of compromising. Its effect must have an immediate positive and meaningful effect on the lives of all Americans. It must be independent from legislative action as none can reasonably be expected from this congress. It must address simultaneously, the problems of unemployment, economic growth, income inequality, the deficit, and the fiscal cliff confronting this country.
The convergence of political and economic events have lead this administration to a point where they must fish or cut bait. Given the news on fundraising and the amount of money that the right has raised in Wisconsin recall election, I am sure that the President is having one of those ‘Come to Jesus’ moments. With the current state of the presidential polls, his brain trust must be having a stroke and are currently open to any and all ideas that will move the needle.
The Net Roots community has a unique opportunity, at this juncture, to make a huge difference in the course of this nation, if it can coalesce support behind a single issue that would actually fulfill most of the criteria listed above, and move the entire progressive community to endorse it and push for its fulfillment.
I believe that there is such an issue that can fulfill the criteria set forth and it involves the President issuing an executive order to roll back the deregulation of the basic commodities markets.
Commodity speculation in just the oil market has cost this country over $30 billion dollars a month during 2012(through May 31st the est. stands at $170 Billion). This would surely double if the speculative effects in the other basic commodities such tin, copper, wheat, corn, soybeans, beef, rice, gasoline, diesel fuel, heating oil, jet fuel, and many others were taken into account. This acts as a tax on the economy by pushing up prices for everyone. Using an estimate of 313 million as the current population of the U.S. this tax is costing every man woman and child in the U.S. over $1000.00 per month just for oil speculation. Freeing the U.S. economy of this burden would pump more than $500 Billion into the economy every year. Economic activity would see an immediate uptick if $40 billion a month were available to consumers. Food would be cheaper for everyone. Every product or service in this country would become more affordable. People would again be able to find jobs. The housing market would improve as everyone will be better able to afford their homes. Tax revenues would rise. The deficit would suddenly be a smaller percentage of GDP and thereby be much less of an economic threat. Given positive economic news our dysfunctional congress might finally find a way to fix the fiscal cliff without wreaking the economy.
The President as head of the executive branch is responsible for executing the laws passed by congress. The congress passed the Dodd-Frank Act which expressly enjoins the CFTC to enact regulations to rid the commodities market of excessive speculation, and the CFTC has failed to act. It is not only the purview of the President it is his responsibility enforce the laws enacted by congress.
The President is an incrementalist and would not act unless there is broad support and a clear vision of where such action would lead. If the Netroots Nation community acts to persuade the progressive movement to back this issue, I believe that the majority of the nation would also have a favorable opinion backing the President’s action on commodities speculation. Imagine having the whole nation on the same side of an issue, not since apple pie. The only opposition I think that might materialize would be the extreme far right who believe that corporations might be hurt and its their mission to protect them and those on the extreme left that think that high gas prices are great to help reduce emissions regardless of the fact that they are impoverishing their fellow citizens and are helping to line the pockets of Wall Street speculators.
Some would say that such an action would go against the financial backers of the President and therefore he would not consider such a bold act. The President is rapidly becoming aware that while he got substantial support from the financial community it will pale in comparison to what is being assembled to defeat him. He has failed to really keep the base in the democratic party happy, he is in the process of losing the funding advantage that he enjoyed in the 2008 campaign, the economy is just sputtering along, Europe seems ready to self immolate, the independents’ support he enjoyed in the last race is wavering, unemployment is ticking up and the right just handed the democrats their heads in the Wisconsin recall election. All in all, he really needs to a make a big change if he intends to win the election. By taking this populist stand to clean up the commodities markets he can win the hearts and votes of many more millions than he could hope to persuade with a few more ads paid for by a few more million dollars in donations from the financial community. Actions do indeed speak louder than words.
Imagine what a call for donations might return if the President’s action to reduce the weekly gas bill of 208,000,000 drivers by $20.00. Asking for $5 or $10 donation from everyone to show support for the president who reduced their monthly fuel bill by $80 to $100 should be a real winner, even if only 25% responded with $5, that would amount to $250 million.
I have been pushing this idea for months and now if the liberal establishment will get behind it I think that it can really be a game changer. Details are at http://www.rbobgambit.org .
This will come to naught unless some in the liberal community choose to back it and push for its adoption.
Thanks for the support, GOTNOGAME I do really appreciate it.
A year ago I would have been right there with you on this one but I came to realize that its not about production and consumption any more. Its about maintaining sufficient open interest on the long side of the trade and keeping a tight grip on the market while effecting the Goldman Roll. Its all about the supply and demand for futures contracts and not about the supply or demand for the physical commodity-oil.
I agree that selling from the SPR would reduce the price of oil and would dampen speculation for a time but it really wont bring the price down substantially. The release from the SPR last summer of 30 mbbl
dropped the price only for a few months and the price was higher at the 1st of November than it was when the President announced the release in the end of June.
The real thing I have against a sale from the SPR is that it would just provide political cover to the administration when they know that the effect is transitory and they also know that the problem is with continuing to allow speculation in the commodities markets. This speculation extends to all commodities, not just oil. A sale from the SPR would probably drive the money from the oil market to the rest of the commodity complex if nothing is done to stop the speculation. More political kabuki.
While I find myself in agreement on other points you have made in this post and others, we are going to have to agree to disagree on this one.
Fracking is ONLY economically feasible if price per barrell is $75 or more. Price of $74.50 or so sounds good to me lol…
Sorry but I really must disagree here GOTNOGAME
Falling costs to find and extract oil from the Bakken is luring producers such as Exxon and ConocoPhillips, according to Jason Wangler, a Houston-based analyst for SunTrust Robinson.
Costs at Enid, Oklahoma-based Continental Resources, the most leveraged explorer to the Bakken after Whiting, have plummeted about 60 percent to $9.63 a barrel of oil equivalent since 2008, data compiled by Bloomberg. That’s $4.58 less per barrel than Exxon’s expense.
here is the link:
If President Obama wants to put a stop to this, he is going to have to do it himself. I agree with GOTNOGAME that the President needs to act, but I have to disagree with the method. The very problem with excessive speculation in the commodities markets is that prices no longer reflect the balance between production and consumption of commodities, they only reflect the supply and demand of the futures contracts. Increasing the supply by selling from the SPR would have a minimal effect and it would be short lived.
The speculation must be stopped and the president is the ultimate head of the CFTC and has the power to enforce the DODD-FRANK provisions concerning excessive speculation that was enacted by congress in 2010. As I posted before he should act by executive authority and issue an executive order to this effect.
Its all at RBOBGAMBIT.ORG
The President is no stranger to executive orders, he has used them many times, the real question is: Does he have the political will to take on the wall street establishment?.
realreform commented on the blog post Pelosi Speaks the Unspoken: Wall Street Speculation to Blame for Rising Gas Prices
Lack of regulation? That blame rests with Congress.
I would have to disagree with this. Congress passed the Dodd–Frank Act which empowered the CFTC to reign in speculation in the commodities markets. Congress has done its part. The CFTC has failed in its job and this is evident by the drop in price of NYMEX oil contract price from over $110/bbl in the spring of 2011 to $76/bbl in Oct of 2011 as the market awaited the publication of the new CFTC rules. The markets reaction to the new rules has been evident by the price action since. The new rules were a sham and havent done anything to curtail speculation, but it is not the fault of congress. They did their part – they passed the legislation. The fault lies with the CFTC and the executive branch. The president has the power and responsibility to enforce the laws of congress and should do so by executive action if need be. Lack of regulation is the only reason that this speculation continues today. I have posted on this very problem before.
I still contend that the president should execute the RBOB GAMBIT and end this speculation now.
The laws to curtail this activity are on the books, they just need to be enforced.
David has it right:
ultimately it’s an executive agency that can crack down on oil speculators
realreform commented on the blog post More on the Economy in 2012: Making Up the Auto and Home Sales Gap?
I agree, Katfka, that you can’t continue to grow an economy on declining wages, but you can mitigate the effects by reducing the commodities speculation that is currently taking place in our commodities markets. The President could do this through the use of an executive order by Executing the RBOB GAMBIT. In forcing the CFTC to enact rules eliminating speculation from our commodities markets as stipulated by the DODD-FRANK Act the president would return to the American public Hundreds of BILLIONS of dollars currently being siphoned from the US economy by Wall Street. This amount would be larger than several payroll tax holidays.
Details at http://www.rbobgambit.org
The CFTC in and of itself as currently constituted will not reign in the speculation in the commodities markets or the derivatives markets on its own. This is evidenced by the new rules issued in October. The CFTC’s thrust is to limit speculation of a singe traders position while completely disregarding the much larger effect that indexed speculation in aggregate has on the markets.
More funding will not fix that attitude that is pervasive in the CFTC that index speculation is ok if it is transparent, and it can be dampened down if it gets out of hand.
Look to the price action in WTI contracts in the past 2 months, it is up 25% from $76 to $99 when it became evident that the economy would not slide into a double dip recession ( also an approval by the markets of the new rules the CFTC announced on Oct 18th). This is purely speculation since there have been no changes to the supply or demand during this time. This front running of economic news is caused by speculators positioning themselves to take advantage of future demands. By allowing this speculation the CFTC is ensuring that the economy will be stymied once again by high oils prices and this will only dampen economic activity.
The President needs to curtail this speculation now and if the CFTC cannot or will not do it then he needs to do it by executive action.The RBOB Gambit can fix this in a week if he has the political will to execute it. The details are at RBOBGambit.org. When the benefits to society of proper market regulation are realized then the problem of underfunding the CFTC will disappear, the public will demand full funding regardless of the wishes of Wall Street.
Good points all, however I believe that everyone is missing the single biggest impediment to our economy today, the continued speculation in basic commodities. This single issue costs the U.S. economy over $1 Trillion each year and everyone is oblivious to this basic fact. If the president would stop the speculation in basic commodities he [...]