NEW YORK (TheStreet) -- There is a way to ease income inequality, save the environment, protect the U.S. dollar and spur economic growth -- the Obama Administration must curtail excessive speculation in oil.
According to Rex Tillerson, CEO of Exxon Mobil (XOM), speculating has the price of oil higher by about 50%. To end that, Congress should pass the legislation sponsored by Sen. Bernie Sanders (I-VT) and Sen. Bill Nelson (D-FL) and President Obama should sign it immediately.
According to Sanders, all that is required is for "the Commodity Futures Trading Commission to impose strict limits on the amount of oil that Wall Street speculators could trade in the energy futures market..." If that were to happen, and the price of oil to fall, there would be many immediate gains in the U.S. and worldwide.
For low-income households, the cost of fuel for transportation and heat hits very hard. Reducing the cost of oil heat or gas at the pump would allow for a higher standard of living for the low income. More could be saved and there would be a greater amount of discretionary income to spend elsewhere. It is difficult to argue against that looking at the millions made by leaders at Exxon Mobil, BP (BP), Chevron (CVX), and other oil giants.
Meanwhile, the more the price of oil falls, the less attractive coal is a fuel. There is no better way to ease the strain on the environment than to reduce the use of coal for power. But due to the high cost of oil, coal has increased in usage more than any other form of power over the last decade. Coal now supplies about 40% of the world's electricity. Cheaper oil would change that immediately!
The weaker oil is, the stronger the American dollar.
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I've written about how oil is becoming a new safe haven asset. That is not good for the greenback. The United States needs to have a robust currency as heavy deficit spending with a weak dollar is a prescription for disaster. This confluence results in having to borrow more and more with a weak currency.