Gas prices pull GOP hopefuls even with Obama

Put this in the “maybe Democracy isn’t such a good idea after all” department…

This from The Washington Post:

Disapproval of President Obama’s handling of the economy is heading higher — alongside gasoline prices — as a record number of Americans now give the president “strongly” negative reviews on the 2012 presidential campaign’s most important issue, according to anew Washington Post-ABC News poll.

Increasingly pessimistic views of Obama’s performance on the economy — and on the federal budget deficit — come despite a steadily brightening employment picture and other signs of economic improvement, and they highlight the political sensitivity of rising gas prices.

The potential political con­sequences are clear, with the ­rising public disapproval reversing some of the gains the president had made in hypothetical general-election matchups against possible Republican rivals for the White House. Former Massachusetts governor Mitt Romney and former senator Rick Santorum (Pa.) now both run about evenly with Obama. The findings come just five weeks after Obama appeared to be getting a boost from the improving economy.

Gas prices are a main culprit: Nearly two-thirds of Americans say they disapprove of the way the president is handling the situation at the pump, where rising prices have already hit hard. Just 26 percent approve of his work on the issue, his lowest rating in the poll. Most Americans say higher prices are already taking a toll on family finances, and nearly half say they think that prices will continue to rise, and stay high…

So basically, when gasoline prices head back down, suddenly Obama will be a great president and get credit for the improving economy? Yes, probably. Which shows how ridiculous this stuff gets.

And then, if the president’s new best friend Israel goes ahead and attacks Iran, and that leads to even higher gas prices, suddenly he’ll be a loser again, right? Yep, and the GOP candidates will probably be criticizing him for not being supportive enough of Israel’s actions, while at the same time they will pound him over the natural economic effect of Israel’s action. And the voters will probably swallow that, too.

Democracy is the worst system, except for all the others. Democracy is the worst system, except for all the others. Democracy is the worst system, except for all the others…

I’m just going to keep saying it, until I feel better…

31 thoughts on “Gas prices pull GOP hopefuls even with Obama

  1. Brad

    Hey, I’m still reeling from watching “Green Zone” and finding out that Greg Kinnear lied about WMD. He always seemed like such a nice guy. Now Jack Nicholson, who starred with him in “As Good as It Gets” — HIM I could see lying…

  2. Doug Ross

    I bet Obama is begging Israel to hold off on bombing Iran until after November. Not just for the gas price hike that will occur but because then he’ll have to try and convince the liberal base that THIS TIME we really, really have to go kill the other people first before they MIGHT have something that looks like a potential WMD.

    And the sheep will follow.

  3. Burl Burlingame

    I still can’t figure out how the president is supposed to set gasoline prices. Wouldn’t that be governmental interference in private business on a multinational level?

    On the other hand, maybe there is a connection. Oil companies can go rampant under a Republican administration. High gas prices hurt the Democratic president. Oil companies set the gas prices.

    Do the math.

  4. Ralph Hightower

    Republicans are forgetting that gas prices spiked to $4/gal nationally in July 2008.

    Who was President then?

  5. Phillip

    @Ralph: true, and that (along with the larger economic meltdown 2 months later) helped tarnish the GOP brand, so that actually confirms the close link between the price of that to which we are most addicted and POTUS popularity.

    @Doug: also to be factored into this is Israel’s thinking on how the timing of what they might or might not do could affect the US election. Netanyahu would love to have a more pliant American government ready to yoke itself to Israeli policy.

    @Brad: still, all things considered gas prices would have to keep rising into the stratosphere for this to really affect Obama, especially vis-a-vis Santorum. There’s no way he beats Obama, no matter how much his large margins in Jesusland might make the overall popular vote relatively close. There’s simply no way he gets over the electoral hump. Romney, on the other hand, was always going to be a competitive opponent for Obama, regardless of his gaffes or his obvious cluelessness to the challenges most everyday Americans face or have ever faced.

  6. Bryan Caskey

    Supply and demand drive price.

    he President is doing everything he can to reduce demand on oil. Reduced demand puts downward pressure on price. That’s great, but it’s only half of the equation.

    Over his term as President, what has he done to increase the supply of oil?

  7. Steve Gordy

    Although I don’t like $ 4 per gallon gasoline, I’ll take that over $ 2.50 per gallon and the loss of half a million jobs a month.

  8. bud

    According to the AAA website:

    The record price for gasoline nationally was $4.11 set on July 17, 2008. Today the price is $3.80. That is about 25 cents, or 7%, higher than a year ago. So what is all the fuss? Given the improving state of the economy it is only natural that a scarce commodity like gasoline will increase in price. Duh, what do people expect. Over time this will only get worse. People absolutely need to use less of it, regardless of who is in the White House.

    Then Gingrich plan for $2.50/gallon is pure fantasy. The hope is that by allowing more drilling on federal lands such as the ANWR and off the coast of Myrtle Beach we will flood the market with oil thus driving the price down. Ain’t gonna happen. At best we might bump production up a million or so barrels a day. And that’s highly optimistic. In a world market that is less than 2% of the total. That’s certainly far too little to bring prices down, especially given the huge increase in demand from China and India.

    Furthermore, what the Republicans don’t tell you is that the U.S. already has more oil wells than the rest of the world combined. We’re drilling like crazy in places like the North Slope of Alaska, North Dakota, the deepwaters of the Gulf of Mexico and in promising new areas of Texas. We really don’t have the resources to drill much more even if all restrictions were removed. Heck, we don’t even drill in places not restricted. Oil companies don’t have that many assets.

    Folks, get used to high gas prices. They won’t ever be cheap for any long stretch of time (unless we go through another recession). Just consider the high price at the pump a small price to pay for a drop in unemployment.

  9. `Kathryn Fenner

    @ Bryan–He has done a lot to try to reduce demand, but we are in a global oil market, and cheap oil here means oil sellers sell overseas, where it is more valuable–reducing supply here, and driving prices up. All this is further complicated by speculators.

  10. Bryan Caskey

    I agree that he’s addressing demand. Again, that’s only half of the equation. I want to talk about supply.

    Kathryn: You seem to be making the point that a “global market” for oil has different prices for oil in different places? I don’t think oil is more “valuable” in any one place or the other. I think certain places have different levels of demand. If it’s truly the case that oil is more “valuable” from one place to another (and I don’t think it is) then wouldn’t that be multiple regional markets?

    I would think that a “global market” would have a single global price. A barrel of oil should cost the same here in SC as it would in Japan (all other things being equal).

    If Saudi Arabia increased their production (or cut their production) our price of oil here in America would be affected. Why can we not substitute the word “USA” for “Saudi Arabia”?

    As history has shown us, when even relatively small reductions in the supply of oil occur, we get a relatively substantial change in price. Shouldn’t the opposite hold true?

    As for “speculators” driving up the price, I still don’t understand the logic of how that works. People who “speculate” on the price of any commodity attempt to bet correctly. I don’t think that oil “speculators” care whether the price moves up or down – they just want to bet that is moves the right way. You can make money “speculating” that oil prices will drop if you’re proven right. Unless your talking about a single individual or group colluding, then I think the “speculators” argument is a red herring.

    Also, what do you think the speculators would do if the President announced that he intended to double US oil production by 2MM barrels a year ASAP?

  11. bud

    If Saudi Arabia increased their production (or cut their production) our price of oil here in America would be affected. Why can we not substitute the word “USA” for “Saudi Arabia”?

    Simple. We don’t have excess capacity, Saudi Arabia does. Nor is that likely to change much, if any, in the future. We just don’t have the reserves regardless of whether we drill in the ANWR or not. Oil production peaked in the USA in 1970. In spite of increased production and mild hurricane seasons in the Gulf we are still just producing what we did in 2003. Not much gain for a nation with more oil wells than the rest of the world combined.

  12. Bryan Caskey

    @Silence: Yep, It’s amazing isn’t it? The same people who print trillions of tiny green pieces of paper are surprised when they don’t buy very much gasoline.

    When it comes to dollars per gallon, I think we might have a dollars problem.

  13. Brad

    Speaking of little green pieces of paper — I’ve mentioned that I’m (gradually) reading “1493.” It’s fascinating to read about what happened, both to Spain and to China, when all that silver from Mexico and Bolivia flowed in. It ended up impoverishing both countries. They had no way of controlling the value, and when SO MUCH of it flowed in, the value of silver plummeted, which mean the money did, too. So much for the silver standard.

    China had done better on paper money…

  14. SusanG

    Printing money has an across-the-board effect. YoY inflation in January was 2.9%. That’s not the issue in regards to gas prices.

  15. bud

    what do you think the speculators would do if the President announced that he intended to double US oil production by 2MM barrels a year ASAP?

    Before or after they stopped laughing. Seriously, to suggest a president can increase oil production by 2MM/year by decree is not realistic. It’s the geology, not speculators, the value of the dollar, environmentalists, government action/inaction or any other human activity (aside from technological advances by oil companies that are likely reaching their limits). Not a pretty picture but one with an out – Conservation.

  16. Steven Davis II

    “People will and do pay more for gasoline in Europe than they do here….”

    Really? That’s interesting, I bet WIS could do a segment on this. Anybody got the phone number for crack news reporter, Mr. Obvious?

  17. Silence

    @ SusanG – Yes, the CPI-U for Jan was reported as 2.9%. It’s probably a lot closer to 6%. The Federal gov’t has a lot to gain by under-reporting inflation.

  18. Doug Ross

    Anyone who has been to a grocery store in the past couple months knows that inflation is much higher than 2.9%. And those prices will only go higher as gas prices increase.

  19. bud

    Silence and Doug, you guys are just waaay too much into conspiracy theroizing. The CPI takes into account a lot more than grocery prices. Check out the electronics section of Best Buy sometime. TVs are way down in price. As is home prices. Even gasoline, the great boogey man of modern times is only up about 7% from a year ago. And it is very volatile and thus not a good indicator. If inflation was at 6% then we’d have much higher interest rates by now. Given the record lows on things like T-bills and home morgages it’s pretty obvious inflation is well in check for now.

  20. Silence

    The president could do quite a bit to cut our dependence on foreign sources of energy and lower energy prices:
    1) Roll back geographic restrictions on exploration and development.
    2) Rein in the EPA to create an atmophere that is more conducive to energy production, while still maintaining reasonable environmental standards.
    3) Continue to have NHSTA and the EPA raise fuel efficiency standards for new vehicles.
    4) Direct the DOE to require increased efficiency standards for new building construction and renovation.
    5) Simply the license & relicense process for commercial power generation or refinery construction.
    6) Direct the Sec. Treasury & require the Fed to maintain a strong currency.
    7) Elminate outrageous and market distorting fuel subsidies, or at least veto them when passed by congress.
    8) Stop spending valuable taxpayer dollars to make loans to politically connected “green” companies.
    9) Stop spending valuable taxpayer dollars to subsidize politically connected energy companies.
    10) Encourage small scale pilot projects and alternative commercial power generation efforts by streamlining federal requirements.
    11) Don’t talk about bankrupting coal companies
    12) Don’t talk about imposing excess profit taxes on oil companies.

    We are doing some of these things already, others, not so much.

  21. bud

    Silence, that’s a pretty good list. The only one I have a real issue with is number 2. We need to keep our air clean and CO2 emission low so that’s really a separate issue from energy independence. Regardless of what we do to power our buildings and vehicles we absolutely must maintain a clean, healthy environment.

    I don’t have a real problem with item 1 but it really isn’t of much use. We are already drilling like crazy so opening up more federal land and coastline won’t do much. But if might make folks happy somehow so let’s do it.

    As for 12, I don’t suggest EXCESS taxes just fair and reasonable taxes on the most profitable industry in the world. It shouldn’t be too much to ask these very rich companies to pay their fair share.

  22. `Kathryn Fenner

    CPI weights in favor of those things consumers buy more of, though, I believe–fewer durable goods, more groceries.

    Agreed, Doug. The State runs a grocery cart price check each month and last year it rose like 15%, and this year, each month is up a few %.

  23. Silence

    @ bud – cheap labor overseas and efficient retailing operations have hidden a lot of inflation for the last 30 years or so. They have also squeezed the life out of blue collar workers domestically, and out of companies that must compete with cheap, foreign producers. Toyota, with Deming’s help has squeezed the excess out of manufacturing a car, compare it to GM of 30-40 years ago, or even today. Hello bailout. Wal-Mart, despite its critics has done the same for retail. Good bye Sears and K-Mart, no bailout for you.

    I like my air and water clean and pure too! I just think that we can do better than we are doing both on the nature protection and on the industry end. The cost of regulation is built into everything we do, every item we buy. We all need to think and act more long term, which brings up one more:

    13) Develop a long term policy that works and stick with it. Companies shouldn’t have to react to short term incentives or to the whims of a whipsawing congress. Make a plan, and make sure it’s a good one, and then stick to it. No knee-jerking around here….

  24. `Kathryn Fenner

    Companies are totally *governed* by short term incentives–stock prices are more important than long-term goals–so why eschew short term incentives?

  25. Burl Burlingame

    “People will and do pay more for gasoline in Europe than they do here….”

    Europeans also have more fuel-efficient cars, drive shorter distances, have better-quality road infrastructure and relatively cheap mass transit. But it’s paid for with taxes.

  26. Doug Ross

    Until we decide as a nation to stop spending a large portion of our GDP on wars and other countries, any talk of trying to be like European countries is an exercise in futility.

    We can’t have it all. We’ve chosen guns over roads.

  27. Bryan Caskey

    @ bud

    When you look at the whole picture, it turns out that there are vast supplies of oil in the U.S., according to various government reports. Among them:

    At least 86 billion barrels of oil in the Outer Continental Shelf yet to be discovered, according to the government’s Bureau of Ocean Energy Management.

    About 24 billion barrels in shale deposits in the lower 48 states, according to EIA.

    Up to 2 billion barrels of oil in shale deposits in Alaska’s North Slope, says the U.S. Geological Survey.

    Up to 12 billion barrels in ANWR, according to the USGS.

    As much as 19 billion barrels in the Utah tar sands, according to the Bureau of Land Management.

    Then, there’s the massive Green River Formation in Wyoming, which according to the USGS contains a stunning 1.4 trillion barrels of oil shale — a type of oil released from sedimentary rock after it’s heated.

    Don’t listen to me, listen to your own government.

  28. bud

    @ bud – cheap labor overseas and efficient retailing operations have hidden a lot of inflation for the last 30 years or so.

    There has always been cheap labor overseas labor. I remember as a young lad folks joking about cheap stuff made in Japan. There’s even a song that references the beads made in Japan that replaced the Cherokee Indian made beads. So that doesn’t really wash. As for “efficient retailing practices”. Seriously is that supposed to be a bad thing?

    Inflation is what it is. It will be something to be wary of once labor shortages become more accute. Right now it just isn’t the most economic problem we face. But as the Obama recovery turns into a boom then we will need to adjust our priorities.

  29. bud

    Bryan, I’ve read those claims before and they really don’t amount to much in the overall scheme of things. All the sources you cited are very difficult to extract and in some cases, especially the shale, may use as much energy to extract it as it returns in useful oil energy. Many of the claims for this or that huge supply are actually for the oil in place NOT for what is commercially extractable.

    Of course as we’re seeing with natural gas production there will be times when supplies spike for a while and prices drop. But inevetibly production continues on it’s downward trajectory.

    Let me repeat for about the tenth time in this discussion, oil production in the USA peaked in 1970. We had a mini-peak in 1988 when the North Slope oil peaked out. We appear to be having another mini-peak now as the Bakken oil and deepwater Gulf oil comes to market. With each mini-peak the NET amount of energy per barrel is less than the previous peak, that is it take more and more energy to extract a barrel of oil. That’s why we have more oil wells than the rest of the world combined yet produce only about 7% of the total crude.

    Thankfully we are using less oil than we did in 2007 and it’s possible we can limp on down the road a few more years as the world’s oil supply eventually peaks out. But don’t count on oil from the USA to contribute more than about 5-10% of that supply. It’s just not there regardless of how promising this or that oil field appears on paper.

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