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Obama's crackdown on oil speculators

This is a RUSH transcript from "The O'Reilly Factor," April 20, 2012. This copy may not be in its final form and may be updated.

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O'REILLY: Thanks for staying with us. I'm Bill O'Reilly.

In the "Lou's the Boss" segment tonight, as you may know, President Obama is calling for federal oversight in the oil speculation market to try to stem the crazy gas prices. Here now, FOX business anchor Lou Dobbs to weigh in on whether this is a worthy endeavor for the president. Is it?

LOU DOBBS, FOX BUSINESS ANCHOR: It's worthy to bring attention to it, to start talking, conflating manipulation and speculation, whether it be in the crude oil markets or anywhere else, is irresponsible on the part of the president.

O'REILLY: You know this Eric Bolling guy? You know him?

DOBBS: Sure. Co-host of FOX.

O'REILLY: Can you give him some of your ties, Bolling? Well, he was on earlier this week and said the speculators are really responsible for about 30 percent of the price drive-up at the pump. And Bolling is pretty -- he's a free marketeer. This isn't some liberal guy. I believe that. And you, you're skeptical?

DOBBS: I'm very skeptical of government. Especially when you start talking about raising margins up to 50 percent. That makes no economic or financial sense.

Secondly, the regulatory agency in this case is the Commodity Futures Trading Commission. It has been historically, traditionally weak and poorly led.

O'REILLY: So I'm putting you in charge of it. What do you do?

DOBBS: First thing is I look for a different job, because I wouldn't like that at all.

O'REILLY: It doesn't matter. You have to do it. You're in charge of that.

DOBBS: I would do precisely what they've actually done, which is limit positions, which is different than raising margins.

O'REILLY: Explain that to me. I don't know what that means.

DOBBS: Instead of being able -- one hedge fund or any user in the oil markets being able to corner 30 percent of the market, make that maximum at most 10 percent of the market.

O'REILLY: All right, so you cut down the volume of oil barrels they're able to control for their purposes of buying -- because they don't want the oil. These guys just want to make money gambling on whether the price is going to go up or down.

DOBBS: In the cases of speculators that's exactly right.

O'REILLY: All right. And for me, that's garbage. This is Vegas. It's Vegas. All right? It's garbage. Not doing anything, anybody good for anybody.

DOBBS: OK. The traditional response for that is, they provide liquidity. That is more...

O'REILLY: What does that mean?

DOBBS: That means you've got more buyers and therefore a higher and more attractive price.

O'REILLY: I don't care about that.

DOBBS: We have to ask what do we care about. Because what's at issue here is whether or not the system works. For...

O'REILLY: But it doesn't work.

DOBBS: Well, it doesn't.

O'REILLY: plenty of supply and the price goes up. That's not supply and demand.

DOBBS: By the way, you're exactly correct.

O'REILLY: Yes.

DOBBS: This isn't the answer. The answer is to look at why prices at this point with demand at a 15-year low are high. It's not because of what's happening.

O'REILLY: It's Iran doing this. It's Somalia doing that. It's some camel who breaks down in the desert. Come on. You make every excuse in the world.

DOBBS: I'm not making any excuse.

O'REILLY: There's a duck that ran across the processing plant. We were delayed three weeks; we couldn't get the duck off.

DOBBS: Bill, your analysis, as usual, is a lot more fun than what I have to offer.

O'REILLY: All right.

DOBBS: The fact of the matter is we're exporting gasoline right now.

O'REILLY: That's right. Four percent is going to China and other places.

DOBBS: The fact of the matter is that we have got to create policies that make sense in this country, and this administration...

O'REILLY: I think we did.

DOBBS: ... is not drilling.

O'REILLY: I like the fact that the speculation are -- is being cut down to a margin that's not going to affect the folks as much as it has. That, I think, is a fair deal.

DOBBS: But it's not going to happen. Let me assure you that this president...

O'REILLY: He's not going to -- you think he's all talk and no action?

DOBBS: I know he is, because the regulatory agency that has to act has acted. It's being forestalled by industry groups.

O'REILLY: Don't do it?

DOBBS: The CME, the exchange that operates these trading pits have the power to raise margin requirements.

O'REILLY: And they haven't.

DOBBS: And they haven't but they will.

O'REILLY: After the president sees "The Factor" tonight, and he'll appoint you, and you'll get it done. That's the method to my madness here, as long as you're available to us on Friday.

DOBBS: You've got a deal.

O'REILLY: All right, Robert -- do you know Robert Reich? He's a communist, right?

DOBBS: Communist, slash socialist. He's confused.

O'REILLY: The guy secretly adores Karl Marx, and he's up there in Cambridge. OK, now he says that because the U.S. companies are now multinational. All right. And we just touched upon this. The oil companies, American oil companies selling the product overseas. That the government now has to step in to make sure that our economy is good. Roll the tape.

(BEGIN VIDEO CLIP)

ROBERT REICH, FORMER LABOR SECRETARY UNDER PRESIDENT CLINTON: Now they are global. So, if we don't have a government that is investing in our people and education, in job skills, in infrastructure and public transportation, basic research and development, all the things we need to do, we can't expect the big corporations are going to do it.

(END VIDEO CLIP)

O'REILLY: All right. So he says the private sector is no longer going to invest in America, because they're interested in making money all over the world, in any other place. And you say?

DOBBS: I say he's right on -- at least in one respect. The government won't be, you know, watching much happen in the way of private investment, as long as it continues to borrow trillions of dollars and suck that capital out of the private economy. How can companies invest if government is sucking up all of the resources?

But, No. 2, businesses aren't the ones who create infrastructure. It is always the public sector. Whether it is the highway system or whether it is massive projects like dams and bridges. Come on. He's an economist; he knows better than that.

O'REILLY: No, he doesn't. What Reich is saying is that the government has to fund Solyndra; it has to fund electric cars.

DOBBS: Sure.

O'REILLY: It has to do it. Because the private sector is not going to do it. They're making enough money in fossil fuels. They're making enough money with the SUVs that get eight miles to the gallon. They say, "Blank you. We're not going to put R&D money in there."

So Reich says the government has to do it, or nothing will get done. And you say?

DOBBS: I say, well, apparently, nothing will get done for all the cronies, buddies and donors of President Obama, because that's where the money is going.

O'REILLY: Is he right about the private sector not investing, because they're making so much money now in the old way, why put it into the new way?

DOBBS: Well, the fact of the matter is that the private sector is investing. And the fact of the matter is, innovation occurs in this country in our factories, our manufacturing facilities.

O'REILLY: So you don't -- you're not buying what he says?

DOBBS: Absolutely not.

O'REILLY: He's just a communist?

DOBBS: Well, we'll leave him at communist for this evening. If that's all right.

O'REILLY: That's fine. All right. Lou Dobbs, everybody. There you go.

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