Does No One Remember the Pain of the '70s?

Both presidential nominees -- Sen. John McCain (R., Ariz.) and Sen. Barack Obama (D., Ill.) -- joined the call to crack down on oil speculation in recent days. But government intervention could lead to worse problems in the oil markets if executed incorrectly.

McCain said in a speech about energy last week in Houston:

We all know that some people on Wall Street are not above gaming the system. When you have enough speculators betting on the rising price of oil, that itself can cause oil prices to keep on rising. And while a few reckless speculators are counting their paper profits, most Americans are coming up on the short end -- using more and more of their hard-earned paychecks to buy gas for the truck, tractor, or family car.

He would reform the futures market to increase transparency similar to the way stocks trade on the New York Stock Exchange (NYX Quote) and Nasdaq (NDAQ Quote). McCain didn't specify whether he planned to take any action against speculators above and beyond those that the Justice Department has under way. The McCain campaign did not respond to email requests for information for this article.

On Sunday, the Obama campaign released a detailed plan for rooting out speculation:

For the past years, our energy policy in this country has been simply to let the special interests have their way -- opening up loopholes for the oil companies and speculators so that they could reap record profits while the rest of us pay $4 a gallon. My plan fully closes the Enron loophole and restores common-sense regulation as part of my broader plan to ease the burden for struggling families today while investing in a better future.

His four-point plan includes: 1) closing the "Enron loophole" 2) ensuring that U.S. energy futures trade on a regulated market 3) working with other countries to coordinate regulation, and 4) having the Federal Trade Commission and Justice Department investigate market abuses.

Does no one remember the 1970s? ...