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.
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.
But lowering prices would engender economic growth in the United States.
Last year, imported oil cost the United States around $700 billion. The Department of Energy estimates that each $1 billion in the trade deficit costs 27,000 American jobs. If doing away with the speculation of oil reduced the cost imported oil by half, there would be an additional 9.45 million jobs in the United States.
More jobs, more spending power for all living in energy-importing nations, and a better environment around the world are very compelling factors for curtailing speculation on oil.
It is not a "win-win" for Big Oil companies like Exxon Mobil, Chevron, BP and the others that would suffer from having the value of assets plunge along with their margins. But the quality of life for the rests of us would rise if oil speculation were to decline.
At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.