The following editorial appeared in the Orange County Register:
Soaring gasoline prices have dragged down President Barack Obama’s poll ratings, and now his energy secretary says he no longer wants prices to reach the even-higher European levels.
In 2008, before his appointment, Steven Chu told the Wall Street Journal: “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”
It’s doubtful Chu’s reversal is unrelated to Obama’s sinking poll numbers.
We suspect Chu’s epiphany is a variation of Bill Clinton’s 1992 presidential campaign theme. This time, rather than “the economy,” Chu’s flip flop seems to acknowledge: “It’s the gasoline prices, stupid.”
It doesn’t take a political genius to see how rising gasoline prices already have hurt the president’s campaign. “Gas prices sink Obama’s ratings on economy, bring parity to race for White House,” a Washington Post news headline blared Wednesday.
Nearly two-thirds of Americans say they disapprove of the president’s handling of gasoline prices, according to a Post-ABC News poll. “Just 26 percent approve of his work on the issue,” the Post reported.
Despite Chu’s previous stance about the desirability of Europe’s $10-a-gallon prices to discourage fossil fuel use and to make alternative energy competitive, with Election Day now less than eight months away, the secretary advocates a completely different strategy.
“I no longer share that view,” Chu told a Senate Energy and Natural Resources Committee hearing Tuesday. “Of course, we don’t want the price of gasoline to go up. We want it to go down.”
Inconveniently for Chu and the president, the public thinks the Obama administration can remedy rising prices. But the president recently lamented, “(W)e don’t have a silver bullet when it comes to gas prices.”
Some administration-friendly commentators sympathize. Charlie Rose on Tuesday’s “CBS This Morning” seemed to excuse Obama: “The president has a point ... . There’s little that he can do ... in the short term to affect gas prices, and gas prices hurts his political chances.”
But CBS News colleague Bob Schieffer pointed up the president’s problem: “(T)he problem is ... people think there are things he can do about it.”
Among those people are 71 Democrats in Congress who complain that the Commodity Futures Trading Commission hasn’t done enough to curb speculation in energy markets under the Dodd-Frank regulations. But Politico, a national politics website, underscored the president’s dilemma.
“The administration finds itself over a barrel,” Politico’s Josh Boak reported. The commission and the Securities and Exchange Commission have yet to define what firms and products come under the new trading laws that were supposed to go into effect at the start of 2011.
Even if the Obama administration suddenly goes after futures traders, it likely would have little, if any, effect on prices, which are far more influenced by supply and demand, Middle East instability and the government’s own restrictions on domestic production.
How likely is it all those factors will be ameliorated between now and November?
Comments (16)
Add commentObama and the progressives do
Obama and the progressives do want $10/gal gas but not until the election is in the bag.
If Obama said drill here, drill now, build Keystone, drill in the gulf and the arctic and people actually believed he meant it the price of gas would drop a dollar by the time he got done with his speech.
blackdog
"If Obama said drill here, drill now, build Keystone, drill in the gulf and the arctic and people actually believed he meant it the price of gas would drop a dollar by the time he got done with his speech."
Yeah, in fantasy land. You seem to have a lot of opinions for someone who doesn't know the first thing about economics.
It's not enough for you people to lie about basic facts, is it? You have to go all out and say that not only is the president responsible for gas prices, but he WANTS high gas prices! Listen to yourself! Your opinions are borderline schizophrenic!
You're up early PP. Do a
You're up early PP. Do a little reading on the realities of central planning over your morning jo and if you can stomach it mix in a little classical econ and you might have a better understanding of what determines prices of goods and services.
The only fantastic part of my comment is that investors would actually believe Obama meant to do everything within his power to increase supply.
The worrisome thing about Obama:
3 1/2 yrs into the administration and we still dont know him. 2 autobiographies and hundreds of diatribes about "transparency" and the man still is hard to nail down. When you listen to what he says, and then look at what he's done (a valid causal construct) the two dont add up. Why is that? His progressive brand of realpolitik may be supported at home (because he's never been responsible for ANYTHING - the perfect ideologue), but in the real world he's scaring our friends and emboldening our adversaries.
@blackdog: I do know a little
@blackdog: I do know a little economics. For instance, I know that new oil exploration requires years of investment before any tangible increase in supply comes about, and that until supply does change, prices will not. I also know that all oil goes into a global market, and there's not enough oil in the U.S. to significantly affect the price of oil, especially given that OPEC operates as a cartel and will throttle their own production in response to increased production elsewhere.
It pays to know a little. Right now, your opinion is based entirely on magical thinking. You think drilling for oil will magically and instantly lower oil prices. The reality is that domestic oil production has actually been up these past few years, and yet so have oil prices. You think domestic production will magically find its way to domestic market. In reality, domestically produced oil goes into the global market, just as oil produced anywhere else does. You think the markets respond to Obama as if he's a traitor bent on destroying the country. In reality, while the market is not perfect and often does not respond rationally, it's just not that stupid.
part of the problem
with gas prices is the world market price for crude. Most every report seems to chose the president over the market when they begin assessing the blame. We sit here in Alaska and watch tanker after taker leave Valdez headed for wherever the best profits for the oil producer can be found. Our pundits want a free market that allows world marked prices for crude while they are not willing to accept the free market drives the pump price not the White House.
The pump prices of gas when charted looks like the proverbial bouncing super ball drew the lines. The only constant appears to be the constant changing prices. Oil companies are making higher profit margins now than they have made in the past. So believe if you will that the magic increase in production bantered about as the solution is going to lower your fill-up cost while the increased production goes off to another country willing to pay just that little bit more than American refineries.
@PP
domestic production is up IN SPITE of an unfriendly regulatory climate. As you stated, it's going into a global market versus being refined at home because that's the cheaper business model.
I get it: in future's trade, by nature a speculative market, the forecasted business climate will impact the price today. This administration has bent over backwards preaching about the obsolence of petrol, and it might be magical thinking by same that our energy needs will be met with algae-fueled ceramic compression turbines(???), but what kind of message does that top-shelf gibberish send to speculators in oil futures?
Words from world leaders move
Words from world leaders move markets.
If Berdnanke stutters during a speech on future fed actions the market can tank. Remember Greenspan and "irrational exuberance?" Obama handlers have gotten him to keep his mouth shut about any specifics pertaining to the economy once they realized that when he speaks of his true intentions the stock market dives immediately.
Gasoline prices are set by future expectations of supply and demand not actual gas coming out of refineries. Why do you think oil prices jump every time we get closer to war with Iran and why do the Saudi's make sure it is widely heard that they will pick up any slack?
Because words that forecast actions do matter.....
@blackdog: you understand the
@blackdog: you understand the stock market is way up since the beginning of 2009, right? Probably not. Or maybe "despite" Obama.
Again, listen to yourself. You're making up all kinds of excuses for why the the world isn't sliding into the end times as a result of Obama's policies, none of which reflect the reality that his policies aren't (all) unsound.
Pretty much everyone with a working brain understands that the president has very little control over gas prices. Period. Only mindless, partisan dolts continue to blame Obama for the prices they pay at the pump.
Achilles’ heel:
Even if BO can or cannot do something about the price “I believe he can” we know for a fact that he wants fuel cost to rise. He has said it himself over and over. As far as Chu, the cats out of the bag and we know where he stands. I for one hope it continues to climb. I can get by; I can also curb my driving habits. It’s the heating of the home and food costs that will hurt a little and less trips in the boat this summer. I do feel for those who are struggling though, it will impact them the most and I’m sure they will take all this in mind come voting time. This will be one of many when it comes to Bo’s Achilles’ heel.
Wrong again PP but that's not
Wrong again PP but that's not unexpected.
The stock market is flying because Obama's handlers muzzled him and the Treasury and Fed are actively buying equities. I fully expect the market to continue to grow steadily until Nov 6. After that my 401 goes back to short term T-bills (since I can't put it into precious metals.)
I think you're on about strike two and a half but feel free to flail away some more. You might consider addressing one of my arguments instead of calling me names but then that would be unexpected......
@blackdog: the stock market
@blackdog: the stock market has risen pretty steadily since Obama took office. Try again.
Pretty funny that you'd contradict an easily verifiable fact, though.
Strike three. The DOW and
Strike three. The DOW and S&P have been more volatile from Summer 2009 to the present than at any time since FDR's depression. Yes they are up but hardly steady.......
Wow, blackdog, you must be
Wow, blackdog, you must be hoping people don't procure sources that prove you wrong.
http://ycharts.com/analysis/story/getting_high_together_djia_closes_abov...
According to you, "the stock market is flying because Obama's handlers muzzled him."
Besides being absolutely wrong, this also has nothing to do with volatility (unless you'd like to blame that on him as well, which would also be wrong).
Starting just after Obama arrived in office, the stock market picked up, ultimately arriving at where it is today (a good place).
Anyone who invests in stocks (like me), who has a rudimentary understanding of economics (like me!), and who understands what powers the president has over the economy of a country (three in a row!) knows that the stock market crash and subsequent recovery had much less to do with politics and more to do with the fact that we hit a really big recession near the end of Bush's second term. Some of Obama's actions (like the bank bailouts and TARP) resulted in stock market gains. I can't think of any actions of his that caused a stock market slump, but I do certainly remember a mini-crash that occurred when members of a certain political party held the debt ceiling hostage...
I'll hand it to you, though: you've certainly gotten more efficient in your trolling behaviors.
Nice try PP. Try zooming in
Nice try PP. Try zooming in a bit on your graph and see if you see a "steady" increase. The high volatility in the market during the period I referenced scared away retail investors almost completely. The institutional investors (big investment banks) who have access to high frequency trading methods (computer managed algorithms) have done very well as money can be made on the ups and downs as long as the trades are in sync.
Mom and pop (and grandma and grandpa who depend on a fixed income) have parked their investments in money markets (safe) and are getting almost zero return due to the Feds QE fetish not to mention the under-reported inflation (my ice cream analogy was very applicable but you can pick another to compare.)
I'm not an active investor but sometime I wish I had the tools to make quick moves with a decent amount of funds. I recall watching an Obama speech relating to the economy on CNBC in early 2009 and watched the major indexes drop about 1% during the course of his 15 minute diatribe.
I agree it was a bummer that those D's held up the debt ceiling lol! I have no love lost and very little respect for any of the jokers in DC........
Wait a minute
Don't we WANT oil prices to rise? We're an oil producing state after all...