Tag: food prices

In These Midterms, Vote For Cracking Down on Wall Street Greed

DemocracyNews & Opinion

Post author By mdifelice
Post date November 3, 2022

by Mia DiFelice

We all remember how the 2008 financial crisis devastated workers and families. Homes were foreclosed, jobs evaporated, small businesses shuttered. Essentials like gasoline and food grew unaffordable for millions.

Back then, we knew exactly who to blame: Wall Street titans, who gambled our economic future on short-term get-rich-quick schemes. But in the aftermath of that crisis, Wall Street walked away with a slap on the wrist and hundreds of billions of taxpayer dollars. In fact, markets have become less regulated since.

Now, in the midst of multiple crises at home and abroad, Wall Street speculators are diving into the chaos to make a quick buck. And once again, workers and families are bearing the brunt of their bets, in the form of higher prices.

Wall Street Speculation Raises The Cost of Living

The U.S. stock market is full of trading on commodities like copper, oil, grain, and other raw goods. Farmers and producers use financial tools like futures contracts to sell commodities to buyers. These contracts help producers and buyers to lock in stable prices in volatile markets.

But markets for commodities trading have become destinations for speculators, who trade for profit only, not for the commodities themselves. They now outnumber real producers and consumers in commodities markets.

Speculators buy and sell contracts that essentially bet on changes in the markets. For example, one could buy a contract that pegs next week’s oil price at $100 a barrel. The more the price rises over $100, the more the speculator profits off the contract.

But this creates perverse incentives. The more wildly commodity prices swing, the more money speculators can make.

Recently, speculation has fanned the flames of rising grocery and gasoline prices. For instance, in the oil market, Wall Street’s bets on oil far outnumber any real, physical trades on it. Speculators trade about 13 times the amount of oil that actually changes hands in real life.

Speculation’s growth massively affects prices. One economist estimates that in oil markets, speculation intensifies price changes rooted in market fundamentals (for example, supply and demand) ten-fold. It’s no coincidence that at a time of frenzied speculation, global food prices shot up 84% in two years and oil prices shot up 55% in just five months.

Wall Street Makes Billions Off Everyone Else’s Struggles

Under-regulated commodity trading has allowed a flurry of activity in the wake of recent global crises, which had already volatile markets swinging wildly. In early 2022, speculation on the rising prices of grains and oilseeds hit highs last seen in 2012. In January of this year, prices for fracked gas futures skyrocketed 46% in one day, the highest single-day gain on record.

The sharks of Wall Street had descended on the blood in the water.

As the invasion of Ukraine heightened energy anxieties, commodity traders pulled in record returns and commodity-trading hedge funds got their own boost. Meanwhile, banks trading commodities on Wall Street were propelled toward record profits — projected to total $18 billion by the end of the year.

Commodity trading is so lucrative that some of the biggest traders in commodity markets are corporations wrapped up in the commodities themselves. That includes meat and agricultural behemoth Cargill, oil refining and petrochemical giant Koch Industries, and many more megacorporations cashing in on today’s crises. Oil corporation Shell earns on average $4 billion a year from their trade activity.

Meanwhile, working families can barely get by.

We Can and Must Rein in Wall Street

Our recent gas and grocery prices have made it clearer than ever—the U.S. must do more to defend our economy and our families from Wall Street’s manipulation.

Following the 2008 financial crisis, the federal government cracked down on speculators — but it wasn’t nearly enough. In particular, the biggest trading firms successfully lobbied against position limits (limits on the number of contracts held by a single trader and class of traders). In 2020, the Trump administration punted a new position limits rule.

Elected officials in office must take the threat of speculation seriously — and Democrats are doing just that. After years of deregulation, accelerated by the previous administration, Democrats plan to hold Wall Street accountable.

Rep. Ro Khanna (D-CA), a member of the subcommittee that oversees the Commodity Futures Trading Commission, has made clear his worries about the role of speculation in our food and oil prices. Now, Sens. Elizabeth Warren (D-MA) and Cory Booker (D-NJ) have asked CFTC Chair Rostin Behnam to investigate the role of commodity markets in today’s inflationary prices.

We can only continue this progress with more and better Democrats in office.

You can help us fight corporate speculation by getting out the vote. Chat with three friends about heading to the polls!

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Tags commodity markets, food prices, gas prices, midterms, speculation, wall street

To Fight Inflation, Fight Corporate Profiteering At The Polls

DemocracyNews & Opinion

Post author By fwwaction
Post date November 1, 2022

by Mitch Jones

Food & Water Action is no stranger to fighting corporate greed. Our partner organization, Food & Water Watch, has been exposing corporate abuses for more than 15 years.

Greed and market power brings grievous harms to consumers, workers, and the environment. But with a convergence of crises — the COVID-19 pandemic, international strife, climate-fueled natural disasters — corporations are bringing it to a whole new level.

In the wake of these crises (many still ongoing), inflation is kicking people who are already struggling. And predictably, megacorporations are exploiting the moment to make even more money, while leaving everyday people in the dust.

To hold corporations accountable and bring relief to working families, we need a strong turnout in November’s midterm elections. Democrats may not be doing enough to tout their accomplishments, but they’ve taken the lead on reining in corporate greed and helping working families.

On the issues closest to voters — the same issues Food & Water Action has been mobilizing around — Democrats have a clear agenda. Their work can only continue if they hold onto their majority in Congress.

Our Energy Prices Are Rising at Every Turn

Fossil fuel corporations didn’t invent corporate greed, but they have perfected it. To keep their dying industry afloat, Big Oil has been cashing in on global instability to squeeze every last cent they can out of families.

We have blown the whistle on Big Oil’s outrageous maneuvers again and again. As important as our advocacy, though, Democrats in Congress have heeded our calls to action with policies that benefit consumers.

Look no further than the windfall profits tax introduced by Rep. Ro Khanna (D-CA) and Sen. Sheldon Whitehouse (D-RI). The bill would claw back Big Oil’s ill-gotten gains and return them to struggling households. By maintaining and expanding the progressive majority, we can move bills like this forward for the benefit of working families.

More recently, U.S. consumers have faced climbing gasoline prices, while Big Oil sends scarce supplies abroad to the highest bidders. Food & Water Watch calculated that in 2021, the U.S. exported over 12 billion gallons of gasoline. That’s more than a month’s worth of our national gasoline consumption.

The trend continued in 2022: in the first six months of this year, the U.S. exported just over 6.4 billion gallons of gasoline -– a nearly 9% increase from 2021.

But again, Democrats in Congress listened to calls from Food & Water Action to ban gasoline exports. In October, Rep. Khanna introduced the Gasoline Export Ban Act to protect American consumers from Big Oil’s inflationary schemes.

Market Power Sends Grocery Bills Sky-High

While fossil fuel giants hurt consumers at the pump, their agribusiness counterparts squeeze us at the grocery store. Giant food corporations are using inflation and supply chain problems as cover to boost profits. In fact, net profit margins for the country’s four top food corporations are up over 300%.

We have long gone to bat against food corporations to help consumers. When food behemoth Smithfield lied to consumers about pandemic meat shortages, we sounded the alarm — and Democrats in Congress heard us.

Moreover, our research has meticulously exposed how the market power of a few megacorporations threatens our food, our families, workers, and the environment. Most recently, Food & Water Watch detailed how corporate speculation and the manipulation of commodity markets drives up food prices.

Fortunately, Congressional Democrats have a consumer-focused agenda that, once enacted, will give families much-needed relief at the grocery store. This includes legislation they introduced such as the Farm System Reform Act and the Food and Agribusiness Merger Moratorium and Antitrust Review Act.

Both of the bills will help break the corporate stranglehold on our food system and level the playing field for farmers and consumers. Of course, the giant food monopolies profiting from consumer misery are fighting this legislation, as well as any common sense measures that curtail their power and benefit working families.

They’re using all of their power and influence to block the progressive agenda and elect more corporate shills in the midterm elections. But we’re fighting to stop them.

Democrats Will Fight Inflation by Fighting Corporate Greed

The November midterms will decide whether we can make common sense consumer protection a reality. Corporate profiteers are desperate to break the progressive majority. And if Republican corporate mouthpieces seize power, consumers will continue to suffer.

Food & Water Action is working tirelessly to mobilize voters in support of candidates who will serve them. We are striving toward a future where a few billionaires and corporations can no longer profit off our suffering; a future with a livable — affordable, accessible — future that we can all share.

Help us get out the vote! Sign up to ask three friends to vote for climate champions in this election.