NADER: Why don't other corporations gang up on big oil?

[yurbud]

I'm not voting for him for president, but on business issues like this, he is exactly right.

Think about oil prices for big consumers, not just your pocketbook. Airlines are groaning, limiting flights, and laying off employees because of the skyrocketing price for aviation fuel. Executives in that industry say that fuel costs are close to 40 percent of the cost of flying you to your destination.

{SNIP}

Why aren’t these very influential lobbies throwing their weight around Washington to get something done about the speculators on Wall Street determining what is paid for gasoline and related petroleum products? It is in their own economic interests.

To do what? Well, for starters, push Congress to legislate higher margin requirements for the speculators at the New York Mercantile Exchange—the same fellows who, based on rumors, took the price of a barrel of oil up another $10 in one day.

{SNIP}

So, why the overall reticence to fight for their own economic interests? First, corporations do not like to fight each other because they may need each other on other matters. Second, hey also have exposable skeletons in their own closets. Third, they do not have to initiate a business war of retaliation. Fourth, they do not want to give their traditional labor, environmental and consumer adversaries cause to strengthen their own power by, in effect, siding with these groups’ traditional causes.

http://counterpunch.com/nader06192008.html">FULL TEXT

[defendandprotect]

1. For the 25 years, it has been Nader who has told us what's actually

going down --- there is little that we discuss that he wasn't informing us about and discussing long ago --

There are some exceptions --- one is the credit card resistance going on --
but it's minor in comparison to what Nader is pointing to, especially
they do not want to give their traditional labor, environmental and consumer
adversaries cause to strengthen their own power --

Just as an aside, my nearby vegetable store does also prepared foods/catering --
tons of plants --
Family is about 4 people --- and then they have probably another 6-8 people --
so probably 10-12 people.
The owner told me the other day that for what they pay the
credit card people, they could add another employee.

Here's what's going on ...

Higher margin requirements (and wider disclosure rules) result in dampening
speculation by reducing the amount of borrowed money these traders can use in
their gigantic commodities casino.

Long-time member of the New York Stock Exchange, Michael Robbins—an astute and
fair analyst—says margin rules have historically been used to dampen speculation
on stock exchanges.
He mentioned a time years ago when the Federal Reserve raised the margin requirement
to ninety percent—meaning the traders had to put up 90% of their own money on trades.

There are other moves that can be made by Washington to ease the oil price crisis
that is fueling inflation throughout the economy and shocking consumers.
Suffice it to say that ExxonMobile testified earlier this month in Congress that
absent the speculators, the price of a barrel of crude oil would be half what it is today.
That would mean about $65 a barrel instead of $130 a barrel.

What else do these big corporate buyers of oil need?

And here's the rest of the story on "ownership" ---

If investors in this country had any power over the companies they own—as individuals,
or through mutual funds and pension trusts—an inquiring process could open up on this
fascinating question.

But as Robert Monks—a leading shareholder activist and writer—has said many times,
those same CEOs have their own economic interests—think CEO compensation—in keeping
investors powerless.

[Hannah Bell]

4. Why do I doubt this line about what investors "could" do, if the

CEOs weren't so gosh-darn powerful?

Because stock ownership is highly concentrated - even with pensions, 401Cs, & the rest.

[Boojatta]

2. Big oil doesn't have a big enough line of credit to handle higher margin requirements?

Since when can speculators control the market price? An individual speculator who has bought something can set the price, but if it's too high then nobody will buy. If you don't want to buy from a speculator, then you are free to participate in the same markets where speculators buy oil.

[Rick Myers]

3. I hold Nader in good stead, unless he wants to run again...

He is a visionary, and a warrior...

[provis99]

5. Nader forgot the most obvious reason

Because CEOs of corporations sit on the Board of Directors of each others' corporations. Corporate America is about them vs the rest of us, not corporation vs corporation in a "free market" system.

[yurbud]

8. yep, cross-ownership and board-sitting is the real reason

[yurbud]

9. maybe like media concentration, we need to break up exec and board concentration

limit the number of boards any one person can sit on, and bar executives from serving as board members somewhere else at the same time.

There should also be a way to connect their compensation to the companies LONG TERM profitability rather than short term performance that leads to Enron like shell games that can destroy the company to create the illusion of profits.

[pauldg0]

6. That's pretty sharp Ralph.....

...Gang up by starting new green products and refusing to use oil to fuel their manufacturing facilities.

Other idustries could lead the way....good idea.

[digidigido]

7. I appreciate Consumer Reports, I'd just as soon piss on his grave for 2000