By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
Yet the heirs to Phil Gramm have done their best to protect speculators, hosing the nation in the process. "Every time the economy starts to show signs of rising, the oil speculators jump in," says Joseph Kennedy II, a former congressman from Massachusetts. "They suck the life out of the economy."
As analysts spoke of recovery in April 2011, the price of gasoline approached the $4 mark. The wicked swings had resumed. Last spring, it topped out once more at $3.96 a gallon.
But this time it had become difficult to screech about environmentalists or supply and demand with a straight face. Even the banks were confessing their sins. An analyst for Goldman Sachs admitted that banks like his had added an artificial 40 percent to the price of a barrel. Everyone from the Federal Reserve to the CEO of ExxonMobil has conceded much the same.
That led Bart Chilton to do a little math. He's a commissioner with the Commodity Futures Trading Commission, which is supposed to oversee oil trading. By his calculations, the owner of a Honda Civic is sending $7.30 to JP Morgan and men like the Kochs every time she fills up her tank. For an F-150 pickup owner, the banker fee is $14.56 a tank.
Chilton believes the annual cost to the trucking industry is a whopping $29.1 billion. For airlines: $9.8 billion. That means every time you fly, every time you buy an apple or a beer, the nation's thirstiest welfare queens take a cut.
Your neighborhood gas station doesn't get a piece of anything, says Sherri Stone of the Petroleum Marketers Association, which represents 8,000 convenience stores and oil wholesalers. Typically, a gas station makes just seven cents per gallon, all of which is eaten up by credit card fees.
Yet it's the elderly who take the greatest beating. In 1979, Joe Kennedy founded Citizens Energy, a nonprofit that provides heating oil to the poor and aged in 22 states. Three years ago, it cost $1,200 per winter to heat a normal house. Today, it's $4,000, he says. To hear Kennedy tell it, Gramm's amendment shouldn't be called the "Enron Loophole." It should be known as the "Let's Try to Starve Grandma Act."
Osama bin Laden could only have dreamed of causing such widespread damage to the U.S. economy. But both parties in Congress remain willing to protect Wall Street at all costs — even if it means terrorizing the country.
"We're going right back to the robber baron days," says Kennedy. "And it's eating away at our heart and soul."
The late 1980s were a quaint period, when the admirals of finance were still eligible for punishment under criminal law. Savings-and-loans were collapsing, just as their larger counterparts would 20 years later, pillaged by executive incompetence and fraud.
So federal prosecutors did something that would never happen today: They convicted 1,000 of the biggest and worst offenders. They also filed some 800,000 civil suits, and banned sleazebags from ever working in banking again.
But Washington didn't grasp the bloodbath's obvious lesson: Bankers still couldn't be trusted. Reagan's "Government Bad, Private Sector Good" mantra had become the nation's official business plan. Instead of watching the wicked more closely, deregulation allowed Big Finance to rampage untethered.
By the time George W. Bush reached office, the philosophy was so entrenched that, without fanfare or any official change in law, the feds decided that Wall Street basically had immunity under fraud statutes.
That was clear by the early 2000s, when accounting fraud became the height of fashion in executive suites across the land. The feds would prosecute the most egregious chieftains at WorldCom, Tyco, and Adelphia. But some of the country's biggest names were caught rigging their books as well, firms like Merck, Halliburton, and AOL. All were allowed to walk. The game had become fully rigged.
Economist William Black, a former bank regulator and author of The Best Way to Rob a Bank Is to Own One, says there are one million law enforcement officers in America today. Only 1,300 are devoted to white-collar crime. Most police departments don't have a single detective working the country club set. When Enron imploded under the largest fraud in Texas history, the Houston PD was busy rousting check bouncers.
With local investigations rare, and the feds purposefully averting their gaze, bankers were allowed to take down the housing market in a scheme 70 times the magnitude of the savings-and-loan collapse.
"Wall Street is a high crime area in which we basically have no cops on the beat," says former securities lawyer Dennis Kelleher, head of Better Markets, a nonprofit devoted to protecting taxpayers from the Too Big to Fail crowd.
One might expect this to occur under George W., who made no bones that his presidency was all about aiding his fellow trust-fund swells. But it would only get worse under the self-styled change agent, Barack Obama.
The appointment of Attorney General Eric Holder said it all. He'd been a partner at the law firm of Covington & Burling, whose clients included Goldman, JP Morgan, Citigroup, and Bank of America. The year before he joined the Obama administration, he made $2.5 million through fees from the very people he was supposed to prosecute.