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The politics of the painful price at the pump
Maddow Blog ^ | October 17, 2012 | Steve Benen

Posted on 10/17/2012 12:23:45 PM PDT by Cincinatus' Wife

Early on last night, a voter asked about gas prices, leading to a rather heated exchange about a variety of energy-policy measures, including drilling leases. Eventually, moderator Candy Crowley tried to focus on a narrow point:

"Mr. President, could you address ... what the governor said, which is: If your energy policy was working, the price of gasoline would not be $4 a gallon here. Is that true?"

President Obama explained that "world demand's gone up," but I suspect some viewers were still confused about the overarching policy.

We haven't really delved into this in earnest since February, so let's set the record straight, because the relevant details make all the difference.

It's true that when Obama took office, gas cost about $1.81 a gallon, and it's more than double now. And how did gas prices get so low in late 2008 and early 2009? Because there was a global economic catastrophe--gas was cheap because the economy had fallen off a cliff. As the economy improved, demand went up, and the price of gas started climbing. It's Economics 101.

As Matt Yglesias explained a while back, "It turns out that driving to work, ferrying stuff from the warehouse to the store, hauling containers across the Pacific Ocean, and flying around to meetings all takes oil. If you manage to orchestrate a situation in which millions of people lose their jobs, retail sales plummet, stores close, and economic activity generally grinds to a halt, this frees up a lot of extra oil."

Demand went down, supply went up, so gas prices went down. Then the economy improved, demand went up, supply went down, so gas prices went up. It doesn't mean we're watching a flawed energy policy fail; it means there's a global market that's affected by recessions and recoveries.

(Excerpt) Read more at maddowblog.msnbc.com ...


TOPICS: Business/Economy; Government; Politics; Society
KEYWORDS: economy; environmentalists; epa; gas; jobs; oil; priceatpump

1 posted on 10/17/2012 12:23:52 PM PDT by Cincinatus' Wife
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To: Cincinatus' Wife
...moderator Candy Crowley: "Mr. President, could you address ... what the governor said, which is:

"Candydish darling, we rilly neeed you to be utter insufferable. Do you think you can do that for us?"

"Trust me babe, I got it nailed."

2 posted on 10/17/2012 12:29:16 PM PDT by Talisker (One who commands, must obey.)
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To: All

“President Barack Obama takes no responsibility for anything — including a 100 percent rise in gasoline prices since taking office as our 44th president.

In 2008, when Obama was running for president, chief energy advisor to candidate Obama and now Energy Secretary Stephen Chu told The Wall Street Journal with regard to gas prices and dependence on fossil fuel: “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”

In 2008, candidate Obama blamed the rise in gas prices on President Bush and his administration. This is what he said: “The President frankly has not had an energy policy ... our demand is badly outstripping supply with China and India.”

Obama went on to state in an interview with Steve Harwood of MSNBC that he agreed with Chu that rising gas prices would be a good thing because it would force citizens to drive less and look to alternative forms of energy. He preferred “a gradual adjustment” in pricing as opposed to a rapid spike.

The president would like us to believe that U.S. oil production under his watch is at an all-time high. However, Sen. Kay Bailey Hutchinson set the record straight: “Offshore drilling permits are being issued at less than half the rate of the previous administration. The average number of leases issued on public lands is less than half than during President Clinton’s term.”

The Obama administration’s energy plan all along was based upon the rise in energy costs in order to force Americans to be “greener.” Again in 2008, candidate Obama was perfectly content with soaring energy prices if it meant less greenhouse gas emissions. This is what he said: “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”.................

Obama actions to limit onshore and offshore oil extraction; his blocking of the Keystone XL Pipeline; his dislike of clean coal and fracking for clean natural gas; his refusal to build new refineries; his refusal to permit new nuclear power plants; and his refusal to limit the burden on refineries to boost production by limiting the number of gas blends and a foreign policy of weakness and appeasement in the Middle East.

The president would rather invest U.S. taxpayer funds in failed energy companies like Solyndra and Ener1 than heed the advice of experts like Hoffmeister, a man with no axe to grind and someone who deals in reality rather than ideology.

What the president fails to realize is that there is no one to blame for rising energy costs other than himself. America has all the energy we need for our own use. The problem is that we have an administration that talks about energy independence, but takes actions to prevent it.

Obama can fool some of the people some of the time, but he can’t fool enough of the people in time for him to escape responsibility for his record on energy — and more — in 2012.”

http://www.policymic.com/articles/5379/high-gas-prices-are-president-obama-s-fault


3 posted on 10/17/2012 12:29:22 PM PDT by Cincinatus' Wife
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To: Cincinatus' Wife
The writer conveniently ignores the effect of supply and regulations on the cost of oil.

I found Obama's explanation laughable. Demand might account for some price elasticity, but no way does it account for an increase of over 100% in four years.

4 posted on 10/17/2012 12:31:27 PM PDT by skeeter
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To: Cincinatus' Wife
gas was cheap because the economy had fallen off a cliff...so because the price is twice as high now, that means the economy is twice as strong? - I don't think so......
5 posted on 10/17/2012 12:39:34 PM PDT by Intolerant in NJ
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To: skeeter; Intolerant in NJ

[Obama debate quote] “Here’s what happened. You had a whole bunch of oil companies who had leases on public lands that they weren’t using. So what we said was you can’t just sit on this for 10, 20, 30 years, decide when you want to drill, when you want to produce, when it’s most profitable for you. These are public lands. So if you want to drill on public lands, you use it or you lose it. And so what we did was take away those leases. And we are now reletting them so that we can actually make a profit.”

Really? Did the government tear up leases that oil companies had paid billions of dollars for and throw the property back on the market?

The simple answer is no. I’m not sure what Obama was exactly referring to, but his administration has repeatedly accused oil companies of sitting on leases and failing to produce oil and gas from them. It’s a charge that drives the oil industry nuts, since it makes little economic sense to pay hundreds of thousands of dollars or even millions to purchase a lease and then sit on it for no reason. It takes years and a lot of expensive seismic work and exploratory drilling to determine whether an oil deposit has economic value, and the oil industry isn’t in the business of drilling dry holes for the fun of it. If there are delays, industry executives say, it’s because of governmental policy such as the offshore drilling ban Obama issued after the Deepwater Horizon disaster.

“It’s like you rent an apartment for $20 million and the landlord refuses to give you the keys to it,” said Erik Milito, director of exploration and production at the American Petroleum Institute. “Then he turns around and complains about it.”.....

http://www.forbes.com/sites/danielfisher/2012/10/17/did-obama-really-take-away-those-oil-leases/


6 posted on 10/17/2012 12:42:01 PM PDT by Cincinatus' Wife
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To: Cincinatus' Wife

$4 gas is the “new normal” per the MSM and therefore not even an issue for debate.

($4 gas in 2008 was the end of the world per the MSM)


7 posted on 10/17/2012 12:42:23 PM PDT by nascarnation (Defeat Baraq 2012. Deport Baraq 2013)
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To: Cincinatus' Wife
It's true that when Obama took office, gas cost about $1.81 a gallon, and it's more than double now. And how did gas prices get so low in late 2008 and early 2009? Because there was a global economic catastrophe--gas was cheap because the economy had fallen off a cliff. As the economy improved, demand went up, and the price of gas started climbing. It's Economics 101.

What about the "record drilling" O was rambling on about just prior? Shouldn't that have increased supply to mitigate the increase in demand, especially since the economic "improvement" has been dismal?
8 posted on 10/17/2012 12:52:23 PM PDT by chrisser (Starve the Monkeys!)
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To: Cincinatus' Wife

But that's because our economy was so much worse then, don'tchaknow.


9 posted on 10/17/2012 12:54:29 PM PDT by Windflier (To anger a conservative, tell him a lie. To anger a liberal, tell him the truth.)
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To: nascarnation

From “Slate:”

“......It started off with an audience member asking Obama whether he agreed with his energy secretary, Steven Chu, that lowering gas prices isn’t his department’s goal. That sparked an increasingly heated exchange in which both candidates vehemently asserted their fossil-fuel bona fides, without ever mentioning that there might be a downside to reinforcing the country’s dependence on oil, gas, and coal. In fact, when Romney accused Obama of not being “Mr. Oil or Mr. Gas or Mr. Coal,” the president defended his record of opening public lands for oil drilling and fired back that Romney was no great friend of coal either. And when he criticized Romney for dismissing wind power, he neglected to offer any reason why alternative energy might be a good thing, other than creating some jobs in Iowa. Romney, for his part, allowed that he “appreciates wind jobs in Iowa,” before returning to his unwavering support for the holy trinity of oil, gas, and coal.

For all that, the candidates never actually answered the audience member’s question, even as Crowley pressed them twice to address whether it was in fact the government’s job to lower gas prices. The correct answer: It isn’t, and it shouldn’t be. The United States already has some of the cheapest gas of any developed country. And for anyone who believes that even cheaper oil is the route to economic prosperity, just look at the countries with the lowest gas prices in the world: Venezuela, Saudi Arabia, Nigeria, Iran. Cheap oil isn’t a long-term energy policy. It’s something that autocrats throw around to keep their grip on restive populations.

For what it’s worth, Crowley did say after the debate that an audience member had wanted to ask a climate change question. “Climate change, I had that question,” she said. “All you climate change people. We just, you know, again, we knew that the economy was still the main thing.”

Except that climate change and the economy are not two separate issues. The problem with climate change isn’t that we’re going to sweat a little more on sultry August afternoons. It’s that species are going extinct, cyclones and tsunamis are wiping out cities, entire island nations are sinking, and Kansas can no longer grow corn. How’s that for an “all of the above” energy policy?”


10 posted on 10/17/2012 12:55:51 PM PDT by Cincinatus' Wife
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To: nascarnation
$4 gas in 2008 was the end of the world per the MSM

$2 gas, you mean. And yes, the news media are hypocrites.

11 posted on 10/17/2012 12:58:05 PM PDT by skeeter
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To: chrisser; Windflier

It’s about Obama’s adminstration’s huge push to de-develop the U.S. and level the global playing field.


12 posted on 10/17/2012 12:58:21 PM PDT by Cincinatus' Wife
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To: Windflier; chrisser; All

"As of January, 2012, the National "average" combined State and Federal GASOLINE TAX is 48.8 cents per gallon."

13 posted on 10/17/2012 1:09:17 PM PDT by Cincinatus' Wife
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To: Cincinatus' Wife

” - - - - “As of January, 2012, the National “average” combined State and Federal GASOLINE TAX is 48.8 cents per gallon.”

Are you saying that Gasoline would be 48 cents cheaper if local, State and Federal Taxes were removed?

OHHHHHHHHHHHHH NOOOOOOOOOOOooooooooooooooooooooooooo! Whatever will we do without our sacred Highway “Trust” Fund?


14 posted on 10/17/2012 1:39:19 PM PDT by Graewoulf ((Traitor John Roberts' Obama"care" violates Sherman Anti-Trust Law, AND the U.S. Constitution.))
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To: Cincinatus' Wife

I’m going to be sure to fill up every car and truck that I own a few days before the election. I want people to really feel the gas prices when they vote. I probably won’t full up the Mason jars though.


15 posted on 10/17/2012 2:03:38 PM PDT by doggieboy
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To: Cincinatus' Wife

Maddow fails ECON 101 because you also have to consider supply. If demand increases and supply decreases or even remains the same you will see a higher equilibrium price. Obama has stifled new oil drilling and his environmental whacko friends have stopped the construction of new refineries and even the Keystone pipeline. We now have virtually no reserve refinery capacity in this country so when there is a fire or natural disaster that shuts down even a single refinery we see drops in gasoline supplies and price spikes. His boast about pushing high mileage cars fails to consider how much the price of cars will increase as a result and if the new CAFE standards will basically kill pickups and small trucks. Obama’s plan could cause US roadways to look like those in Cuba with patched up 50 year old pickups and small trucks still in service because no new vehicles will do the job.


16 posted on 10/17/2012 2:41:11 PM PDT by The Great RJ
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To: Cincinatus' Wife
“It’s like you rent an apartment for $20 million and the landlord refuses to give you the keys to it,” said Erik Milito...and Romney didn't even mention that after the horrific spill in the Gulf of Mexico was cleaned up, the government issued a moratorium forbidding more drilling in the Gulf which a federal judge declared null and void, allowing drilling to resume - and the administration ignored his ruling and continued the moratorium - and again the judge told them to drop the moratorium and allow continued drilling - and again the administration ignored the court........
17 posted on 10/17/2012 6:54:57 PM PDT by Intolerant in NJ
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To: The Great RJ; Intolerant in NJ; All
Obama Lectures Romney On Cargo Cult Economics [the price of gas]
18 posted on 10/18/2012 2:31:59 AM PDT by Cincinatus' Wife
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