Diana Henriques, a business reporter for the NYT, makes it her business in this piece to run the Fear Factor in favor of commodities speculators with a fairly broad brush. After all, we need them.
First there is the "Pity the Poor Victim" trilogy.
In Washington, financial speculators have fat targets on their backs.
They are being blamed for high gas prices, soaring grocery bills and volatile commodity markets, and lawmakers are lashing out at market regulators for not cracking down on them more vigorously.
“You study it, but you don’t act against this incredible increase in speculation,” Senator Carl Levin complained to a senior official of the Commodity Futures Trading Commission at a recent Senate hearing. “Unless the C.F.T.C. is going to act against speculation, we don’t have a cop on the beat.”
Just this week, Senator Joseph I. Lieberman, the Connecticut independent, said he was working on a proposal to ban large institutional investors from the commodity markets entirely. The same day, the Bush administration endorsed another Senate proposal to create a new federal interagency task force to investigate commodity speculation. At least four public hearings have explored the topic in just the last two months, and Senator Lieberman will hold another session on June 24.
Golly. Maybe they're "being blamed" because, well, they're responsible. Huh? Even stolid Holy Joe is getting into the act. Why, it's...it's...persecution, that's what it is. I mean, they work hard and provide a valuable service. Huh?
Although it is common in tough financial times to blame the speculators, this escalating hostility toward them is starting to worry people with years of knowledge about how commodity markets work. Because without speculators, they say, these markets do not work at all.
Speculators, people willing to risk their capital in search of high profits, are central to healthy commodity markets, they say, and broad-brush restrictions on them could damage markets that are already under pressure from rising global demand for food and fuel.
Scapegoats! That's what they are. Why, without them OUR ECONOMY WOULD CRASH AND BURN!! We're blaming them and they may not even be the sole cause.
Even in Washington, there is widespread agreement that no single factor is responsible for rising food and energy prices. The hungry, high-growth economies of India and China are fundamentally affecting worldwide demand, while uncooperative weather and government policies on trade and ethanol are among the many factors affecting supply.
That's it! It's China's fault. THE YELLOW PERIL!! Our speculators are innocent!
Or it's (I love it) the weather. Really, folks, there's nothing going on here but common FREE MARKET FORCES. There's no <whisper> greed </whisper> here. Just good, wholesome, American business. And those prices? And those mag-ni-ficent oil profits? And those guys betting they'll make oodles of $$$ on starvation? They're just classic American businessmen taking advantage of an opportunity no matter what the cost.
To other people.
[B]eneath all these external factors is the simple seesaw of the marketplace: For every person who buys oil at $130 a barrel, there must be another person willing to sell at that price — and, odds are, at least one of them will be a speculator.
See? Normal. Nothing to be worried about. Everything's fine. Back to your homes. [beat] What was that?
In a statement this week, Walter Lukken, the C.F.T.C. chairman, said the commission was determined to see that commodity prices were set “by the fundamental forces of supply and demand, rather than by abusive or manipulative practices.”
Abuse? Manipulation? Well, in the old days, maybe....
The commodity market has seen its share of manipulation scandals — allegations that executives at J. R. Simplot had tried to fix the Maine potato market in 1976, allegations that the Hunt family of Texas had manipulated the silver market in 1979 and, just last year, BP’s settlement of federal charges that it had manipulated propane prices.
Certainly, there have been unusual price spikes in commodity markets, like the short, sharp roller-coaster ride that hit the cotton market in early March and the more recent gyrations in the oil markets that have alarmed some market participants.
But there's an even greater danger: if you take the speculators out of the commodities market, they might start fooling around with something else. EEK!
The stage of the speculation that is alarming Washington is the commodity futures market, which trades a financial derivative called a futures contract, an agreement for the future delivery of a fixed amount of a commodity at a certain price. The prices at which these futures contracts change hands are the benchmark for pricing commodities around the world.
In essence, speculators are the only voluntary players in the commodity futures markets. They could use their billions to dabble in currency markets or buy distressed real estate or pile up Treasury bonds.
So calm down. Speculators are like bats - they may be scary but they eat all the mosquitoes.
So speculators become the ballast in the market, making the contrary trades, taking on the risks the hedgers want to shed, reacting quickly when news jolts the markets and, most important, creating liquidity by pouring in enough money to allow everyone to make very large trades quickly without causing wild price swings.
See? Speculators GOOD! Speculators GOOD!
This isn't propaganda, it's just a one-sided, bi-polar, good/evil view that doesn't allow for middle ground. Like, maybe, you can have speculators but keep them from running amok? Why is that such a hard concept for business reporters - and conservatives - to understand?