Jobs are being created. Consumer confidence remains high. Housing stats are up for the first time in years. The global financial markets are, for the time being, stabilized. All of these are good signs if you are the campaign staff for Barack Obama’s reelection campaign. Sitting presidents tend to do better when the economy is going well, and while that’s hardly the only thing that matters, it was a factor that was supposed to count against Obama this year, but is instead picking up just in time to give him political credibility as he launches into a potential second term.
The one thing that came out of nowhere and seems to be causing Obama’s reelection team more jitters than a Venti Cappuccino is rising gas prices. According to the AAA Fuel Gauge, gas prices have jumped 18% since December. It’s having an effect, as consumer sentiment, a measure of how much consumers believe the economy is going well, dropped for the first time since August.
So what’s causing this upswing in gas prices? Is it the crisis in Iran? At least partially. There always seems to be a crisis of some sort, and when Libya’s crisis was happening, crude oil prices spiked to about $91 a barrel. Today they’re holding steady over $100 a barrel.
Obama is predictably being criticized by Gingrich, Romney and Santorum, but to say that Obama’s policies are causing high gas prices is shortsighted, naive, and intentionally misleading. The President’s influence on gasoline prices is incredibly limited given rising global demand, Iran’s crisis, and big oil’s monopoly on the market. Sure, there are a number of things he could do to drive the price down…temporarily. They include opening the spigot from the strategic reserve and passing a gas tax holiday.
But here’s the thing: Long term, nothing will bring the price of a commodity down that has increasing demand and shrinking supply.
In the meantime, Obama is fighting back. He’s once again calling for an end to the $40 billion in taxpayer subsidies for big oil that Republicans insist are necessary. Whether they can pass this through the Republican-led House of Representatives is unlikely, but at least when November rolls around, the whole “He made gas prices go up” argument will seem pretty shameful when there is this: “They’re giving your tax dollars to big oil, whose profits are among the highest of any companies in the world, and who are dodging U.S. taxes by setting up tax havens in the Marshall Islands.”
Of course, in our soundbite culture, it’s much easier to whine a one-liner about gas prices than expect people to understand the nature of big oil’s greed.
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