Here Comes Trouble: Stories from My Life

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Carl Gibson

Spokesman and organizer for US Uncut

September 4th, 2012 7:40 PM

Why Gas and Groceries Are So Damn Expensive

A single mom's story

amie Denson is a single mother in Jackson, Mississippi. She has two daughters, ages 13 and 11, who love theatre and music, respectively (Jamie's youngest invited me and other musicians over for her jam band-themed 11th birthday party), whom Jamie lives for and would die for if necessary. Jamie is an auto glass repair technician, and is required to be mobile to meet her clients where they are. And as a mobile small business owner, Jamie depends on her car to get around, which depends on gas to be useful. And today, the cost of filling up her tank currently exceeds the revenue Jamie takes in from her clients. This leaves Jamie no choice but to raise prices and lose current and potential clients, or to try to run her business from home, which would also mean losing current and potential clients. Either way, Jamie's business is threatened, as is the livelihood of her two daughters. While she may be reluctant to raise her prices, her neighborhood grocery stores and gas stations certainly aren't.

The hidden cost of Wall Street speculation on oil comes up to at least $23 per barrel of oil, or 56 cents a gallon at the pump. That's about 15% of a $3.85 gallon of gas. And that's just what Goldman Sachs, one of the worst of the speculators, will admit to. The actual influence speculation has on gas prices is probably much higher. Meanwhile, Wall Street titans like Goldman Sachs, Morgan Stanley and Barclays have driven up prices by speculation on not just oil, but food as well. Thanks to commodity index trading, which lets investment firms bet on several commodities at once, everything can be speculated upon in a package deal. Between 2004 and 2008 commodity index trading volume went from $13 billion to $260 billion. Remember the summer of 2008 when gas was almost $5 a gallon?

While our wages stagnate, food prices have also jumped through the roof, and are expected to increase by up to 4% in the next year according to the USDA. A big part of this is due to the catastrophic drought plaguing much of the Midwest, and climate change forcing the once prosperous bread belt northward into Canada, constricting supply while demand increases. This forces us to import more crops to feed our own people, and is costing us billions in crop-export losses. It also means we're paying exponentially more to feed our own families when we shop. Climates changing at a dangerously rapid pace will directly hit families in the wallet and on the dinner table, regardless if they choose to accept the science or not. But a big factor that's also driving up food prices is speculation - while Barclays made $800 million betting on high food prices, the cost of food has risen in the UK by a whopping 37.9% in the past year.

The Commodities Futures and Trading Commission is tasked with reigning in excessive speculation on resources like oil and crops, and has the direct power from the federal government to crack down on the exact type of behavior that makes people like Jamie and her daughters suffer so Wall Street financiers can buy a newer Bentley. But with a Republican-led Congress determined to squash all government regulation that affects their campaign donors, the CFTC is left understaffed and underfunded, powerless to adequately police the Goldman Sachses and Morgan Stanleys of the world.

Situations for everyday people like Jamie and her daughters won't improve until we have more elected officials like Sen. Bernie Sanders who call for using laws already on the books to go after the crooks in the financial sector who are making life hard for regular working folks. And more than that, we need a government serious about addressing the issues caused by global warming, like rising oil and food prices, even if it involves putting forth solutions that hurt the bottom line of prospective campaign donors.

For starters, it could mean doing away with burning coal and natural gas to produce electricity, which we can easily do by building 100 miles of mirrors in the Nevada/Arizona deserts, which could provide free solar-powered energy for every home and business in the nation, many times over. It could mean requiring all cars to be produced with a hydrogen fuel cell-powered engine that only emits water vapor instead of CO2. After all, hydrogen is the most abundant element in the universe, and we've had hydrogen fuel cell technology since the 19th century. However, either solution would involve simultaneously pissing off the oil/coal/fracking/trucking lobbies, all of whom are big money power-players for politicians of both major parties.

In this next election, we must ask every candidate who they would work for if elected - lobbyists or struggling single moms? Special interests or growing boys and girls? Campaign donors or small business owners? Folks like Jamie Denson and her two daughters have the right to know.

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