In Obama’s Saturday morning radio address, he speaks of the rising price of gasoline and the effect it is having on the American consumer in particular and the economy in general. Actually, is less an attempt at empathy with the American public than it is a realization that his popularity and his approval are plummeting as quickly as gasoline prices are rising. Rasmussen has produced a very nice analysis going back to the Carter Administration demonstrating that Presidential approval ratings almost perfectly correlate with gasoline price changes (source: www.rasmussenreports.com/…/what_fuels_Presidential_approval) Hence, it is time that Obama and his liberal cohorts trot out a time worn strategy, namely class warfare, namely attacking the big bad oil companies for their “obscene” profits amidst the growing pain of the American consumer.
As Obama states early in his address, “…while gas prices mean real pain for our families at the pump, they also mean bigger profits for oil companies. This week, the largest oil companies announced they’d made more than $25 billion in the first few months of 2011- up about 30% from last year.” That much is true. However, what Obama fails to inform the American public is that compared to this time last year, the price of oil has increased 59.2%. What Obama fails to mention is that oil companies, other than restricting production, cannot dictate the price of oil on any commodity exchange. In fact, Obama mentions this in his speech: “…America’s oil production reached its highest level since 2003.” As an aside, imagine what our oil production levels would be if the EPA was not denying clean air permits or Interior would actually allow companies to drill without unnecessary delays? What Obama is saying in that statement is that the laws of supply and demand are not dictating the price of oil. We also know that oil companies cannot dictate the price of oil and, thus, gasoline.
So, what is the Obama solution? He wants to end government subsidies to oil companies in light of their record profits and in an attempt to show fiscal sanity. This would amount to an annual savings to the Federal government of $4 billion. As he states, these are subsidies we can ill-afford in these tough fiscal times. That sounds great until we juxtapose those comments against those he made in Lake Tahoe, Nevada less than a week ago when he called on the federal government to provide $8 billion towards clean energy production. By my math, we cut $4 billion to spend $8 billion…wouldn’t that be a net negative $4 billion? Does Obama understand that the bulk of America is not stupid? He mentions this diversion of funds in his address: “…I believe instead of subsidizing yesterday’ energy, we should invest in tomorrow’s…” Put another way, we don’t subsidize fossil fuels; we do subsidize solar and wind energy.
Leaving aside that nonsense, we are actually talking apples and oranges here. The vast majority of oil is not used for the same energy that solar and wind sources produces. Most of our oil is refined into gasoline, diesel and jet fuel. Solar and wind energy would produce energy to power our factories and homes, not to power our automobiles, trucks, trains, and airplanes. That is, oil does not necessarily compete with these so-called clean energy sources. In typical liberal fashion, Obama is using high gas prices to stick it to his “enemies.” And he is using this to push his clean energy, green job creating agenda and pipedream that has proven futile elsewhere with Spain being the biggest poster boy for the failure of the green job creation myth. Only is there passing reference to domestic oil production in his address.
Most importantly, where does Obama address the Federal Reserve’s policy known as QE2 which is nothing more than a back door stimulus program. What Obama cannot get passed legislatively, he agrees to with a wink and a nod towards Bernanke and the Federal Reserve. Granted, this was a rather short address for our esteemed Boviator-in-Chief, but not once does he mention the phrases “speculators,” or “QE2,” or “Federal Reserve,” “Ben Bernanke,” or even the phrase “declining value of the dollar” to explain the rising price of gasoline. Nope- apparently it is all because of these $4 billion in subsidies.
Listen: I am all for ending government subsidies not only to oil companies, but to clean energy, agriculture, for housing, to banks, etc. Let us follow Obama’s lead and cease subsidies to oil companies provided we end all energy subsidies- to ethanol, to wind, to solar, you name it. But in the interim, Obama and company need to stop the Big Oil bashing and stop distracting the American public in a sad attempt to bolster his approval ratings.