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

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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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To Fight Inflation, Fight Corporate Profiteering At The Polls

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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.

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This Bill Will Help Lower Gasoline Prices By Banning Gas Exports

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by Mia DiFelice

Gas prices have been top-of-mind and top-of-newsfeed for months now, as the Russian invasion of Ukraine and supply shocks in the wake of the pandemic shook up the market. More recently, international oil cartel OPEC+ announced plans to lower production to keep prices high.

But few outlets have pointed to one of the key drivers of our pain at the pump — greedy oil and gas corporations that would rather send our supply abroad for maximum profit than serve customers at home. 

Our researchers have dug through the data, and we’ve found damning evidence of corporate greed. Oil and gas companies have been exporting historically high amounts of finished gasoline, squeezing domestic supply and sending high prices even higher.

But now, Rep. Rho Khanna (D-CA) has introduced new legislation to end gasoline exports.

Our Gasoline Export Boom is No Coincidence

Our latest analysis shows that in the first six months of 2022, gasoline exports jumped nearly 9% compared to the first six months of 2021. And 2021 was already a huge year for gasoline exports. The U.S. exported over 12 billion gallons, 1.5 billion more than 2020. That gasoline could have fulfilled the needs of 30 million American drivers for a whole year. 

These exports put pressure on our domestic supply of gasoline. Because of the supply squeeze, corporations can boost prices — and profits. Shell’s profit margins from refining alone have tripled in this year’s second quarter, to the tune of billions of dollars. Chevron and Exxon’s refining profits have also surged by the billions since this time last year.

In October, the U.S. Department of Energy pointed out that these profits are possible because gasoline companies have failed to manage their domestic supply. But while we suffer at home, those very same companies are exporting gasoline at historic levels.

This is only the latest in a long line of corporate greed that takes advantage of crises for profit, while hurting workers and families. In the past few years, lying meat corporations have hidden behind the pandemic to price-gouge us at the grocery store. Meanwhile, fracked gas companies jumped on Europe’s energy crisis to build out polluting infrastructure in our communities. 

Without government action, we can’t expect corporations to give up on their dirty tactics.

We Can Lower Gas Prices By Banning Gas Exports Now

Political pundits have taken the Biden administration to task for not drilling. But not only did Biden ramp up drilling well before our gasoline price hikes — this false claim distracts from the real issue of gasoline exports. Moreover, more drilling for crude won’t help gasoline supplies when refineries are already running on all cylinders.

Over the past few years, Food & Water Action has thrown a spotlight on the role of corporate greed in rising prices. This week, we finally have action in Congress. The Gasoline Export Ban Act, introduced by Rep. Khanna, would require the president to ban exports when gasoline prices rise above $3.12 for one week. 

Today’s gas prices show yet again that corporations can’t be trusted to keep the interests of their customers in mind. Rather, they’re happy to pursue any path that will bring them more profits. We need the Gas Export Ban Act to reign in Big Oil and lower the prices on this essential fuel for working families.

Ask your Congress member to support the Gas Export Ban!

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Drilling Won’t Lower Gas Prices. Here’s What Will.

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by Mia DiFelice

It’s the hallmark experience of summer 2022. You’re rolling down your local street, heat waves shimmering off the asphalt, breeze blowing through open car windows. But when you stop at the light, an impossible number catches your eye. Huge and stark, the sign proclaims “REGULAR: $4.95.” It was $4.70 just last week!

Gas prices have been rising for months. Experts first pointed to an unexpected, rapid demand as global COVID lockdowns lifted. Oil and gas corporations saw bankruptcies and negative gas prices in the worst months of the pandemic. But rather than respond to returned demand, industry titans doubled down on profits.

When Russia invaded Ukraine, countries around the world began sanctioning Russian oil. Eye-watering gas prices have piled onto a seemingly endless list of crises and pain points for consumers. 

So of course, gas has become a political tool that Republicans use to condemn the climate policies of the Biden administration. Pointing at the president is a convenient pretense as they defend the interests of fossil fuel corporations.

But media coverage of gas prices swings between incomplete, misleading and downright false. The truth is, gas prices have little to do with White House decisions, and there are few quick fixes.

Consumers — especially the most vulnerable — need relief. But that won’t come from more drilling, as many politicians are demanding. In fact, more drilling would keep us at the mercy of future oil shocks. And it would attach our economic and environmental health to an industry with a long history of volatility and corporate greed.

Let’s break it down. 

White hand pumps gas into a white car.

More Drilling Is Not A Quick Fix For Gas Prices

Citing economic principles of supply and demand, political pundits call for Biden to increase the U.S. oil supply — that is, to drill more. We need more gas than we’ve got, the logic goes. Prices have risen. If supply grows to meet demand, prices will drop.

This argument misses key facts. First, Biden is not blocking the flow of American oil. In fact, he’s opened the tap more than Trump. The current administration issued more than 3,500 drilling permits in 2020 alone; that’s a third more than during Trump’s first year. And under Biden, U.S. oil production has grown from 9.7 million barrels a day to 11.6 million.

Yet oil and gas corporations are staying away from new drilling projects. Currently, 4,400 approved and drilled wells have yet to produce oil. Oil and gas executives show no sign of ramping up production. 

High Gas Prices Are A Boon For Investors

Oil executives themselves have revealed the reason for their inaction — profits. The oil and gas industry is seeing record cash flow. In the first quarter of 2022, the five biggest fossil fuel companies made their highest profits in more than a decade. Last year, four major companies (Shell, BP, Chevron and Exxon) made $75 billion. 

Their investors are demanding more of that windfall. So, instead of investing record profits in more drilling infrastructure, oil corporations are sending money back to investors through stock buybacks and payouts. In a March poll, 59% of oil executives admitted that investor pressure for profit, not government regulation, is the real reason they’re not drilling.

But blabber about drilling misses the mark. And it’s not like we usually use lots of Russian oil that we’re now missing. Of all the petroleum products used in the U.S. in the last decade, only 2% were Russian imports. So how do Russian sanctions affect U.S. gas prices?

The Oil Market Is A Complex Rollercoaster

Oil is a global market, which means prices are set by global supply and demand. The market could be rocked by tons of factors outside of U.S. control. Factors like natural disasters near production centers, the whims of oil-producing states and war. Such events create uncertainty about the future of supply and demand, which leads to more volatile prices. On top of that, speculators and their fleet of AI routinely bet on the future of the oil market. When prices go up, investors see dollar signs — and the more money they put down, the higher prices fly. 

In 2021, the U.S. exported more oil than it imported for the first time. Our crude oil production is soaring to record highs. Yet the price we pay for oil has still fluctuated wildly over the past few years. We are still vulnerable to oil price shocks.

The additional drilling pundits have proposed are a drop in the bucket of global supply. Far more influential are international disasters that clog supply chains, worry investors and prevent new development. Domestic production won’t insulate the U.S. from the global oil market. In fact, if more of our economy ran on fossil fuels, it would make us even more vulnerable to turbulent markets.

Price Controls and Renewables Are Real Solutions to Rising Gas Prices 

In the short-term, our government can help consumers with two tools. First, price controls would keep gas prices low, especially for those who need it most. Our country’s dirty oil addiction should not hurt workers and families. Second, we need an export ban on gasoline and other fuels. Despite the current crisis, U.S. exports on gasoline and diesel are nearing record-highs. With such exports, corporations send our domestic supply to the highest bidder. This ramps up market prices for everyone — including those of us who depend on gas for daily life and work.

Looking ahead, we need long-term solutions that will get us off the oil market rollercoaster. That means ramping up renewable energy. Renewables will insulate us from global oil shocks much more than domestic drilling ever could.

But we have to pick up the pace of development while stopping new oil and gas. Our infrastructure and investment decisions today will have ripple effects for decades. More drilling won’t help struggling Americans tomorrow or even this year. But it will lock us into a future of dangerous emissions, climate disasters and high prices. 

In April, Rep. Cori Bush, Sen. Bernie Sanders and Rep. Jason Crow introduced the Energy Security and Independence Act. This legislation will send $100 billion to the renewable energy sector and to programs that lower utility bills for consumers. It will give the sector the boost it needs to help us transition off fossil fuels — a vital step toward real independence from the oil market’s rollercoaster.

Tell Congress to pass the Energy Security and Independence Act.

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