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Why Barack Obama doesn’t care that you’re paying $5 a gallon for gasoline.

Because he doesn’t pay for gasoline of course. But that’s not it.

Despite his protestations to the contrary, Barack Obama thinks you’re stupid. Gasoline prices are 90% higher today than they were when he took office and he wants you to think he has nothing to do with it. At the same time however he wants you to give him credit for the fact that imports make up the lowest percentage of US energy usage in years.

The President reminds me of the “Magic Grits” scene from My Cousin Vinny; where perhaps the laws of economics cease to exist on Obama’s watch. Unfortunately for America, they don’t.

It is accurate that American energy imports are down and production is up since Obama took office. Contrary to the President’s spin however, it’s in spite of his actions, not because of them. Last year oil production on state and private land (where the feds have less influence) was up by 14% and 12% respectively. On federal lands, you know, the ones that President Obama controls… down 11%. At the same time, during the last quarter of 2011, permitting for drilling in the Gulf fell off a cliff. Then of course there is the languishing economy that reduces demand for oil in the first place. Not to mention a mild winter and a surge of natural gas production, that is, again, overwhelmingly on private land. Add those things up and you simply have less demand overall and a smaller need for foreign oil

Now to gas prices. The single biggest factor in the price of gasoline in the United States is the cost of oil. Oil is denominated in dollars which means that when you print lots more money – as the fed has been doing with Obama cheerleading – the price of stuff denominated in dollars tends to increase. Then there is the unrest in the Middle East, a Saudi production cut and the increasing (but ever more slowly) demand from China and India. Why do these things matter? Because all of these factors tend to drive up the price of crude oil, and crude makes up about 76% of the price of a gallon of gasoline today, up from a historic average closer to 65%.

So back to the President. It’s higher oil prices that translate into higher gasoline prices – as opposed to the price gouging by Big Oil which is what the President would have you believe. Enraged, the President tells us he’s been working to bring down gas prices. How? His answer is to reduce demand for gasoline by pouring billions of taxpayer dollars into green energy boondoggles while simultaneously putting the brakes on exploration and development on federal lands. Oddly that strategy hasn’t worked. Prices are the highest they’ve ever been at this time of the year. Is it possible that our 4th best president failed Econ 101 and that this is all just a terrible mistake? Actually no. Just listen to candidate Obama from January 2008: “Under my plan, electricity rates would necessarily skyrocket”. So, it turns out he actually does know what he’s doing, only right now he’s doing it with gasoline. He’ll have you driving an electric brick within five years if it’s the last thing he does!

Five dollar a gallon gasoline is the result of Barack Obama’s desire to have the American people foot the bill for his gullibility in the face of the global warming hoax. That is a key element in his long term goal: To join the likes of Alexander the Great, Julius Caesar, Napoleon, George Washington and others in the pantheon of great men on the stage of history. Not sure? Remember this: “This was the moment when the rise of the oceans began to slow and our planet began to heal”?

Of course the price you pay for his grandiosity is found in much more than just gasoline. Oil and energy play a role in virtually every aspect of the economy, from food to transportation to chemicals and virtually everything else, like stuff packaged in plastic, products made out of metal, commodities that need to be excavated or buildings that need to be heated. It may not be easy to see, but the price of oil and gasoline impact everything in the economy. As a result, just when consumers need a little more money in their pocket to spend, inflation is inching back up. Believe it or not, that’s just fine with President Obama.

Why? Polls tell the story. Despite the fact that gas prices are up 90% on his watch; despite the fact that there are millions fewer Americans working than when he took office; despite the fact that he’s added $5 trillion to the national debt in a mere 3 years, President Obama leads whoever the flavor of the week GOP candidate is in virtually every poll.

Unfortunately the electoral math is pretty simple. Fifty percent of Americans pay no income taxes. There are 2.1 million federal employees who love the fact that they earn average salary and benefits of $123,000 per year, double the civilian workforce. There are 14 million state and local employees, half of whom are teachers and many of whom are in unions making more than their civilian counterparts. None of these constituencies are particularly interested in getting rid of Barack Obama and potentially destabilizing their gravy trains. Add to that the fact that blacks (who make up 12% of the population) tend to vote Democrat at a 9 to 1 or more ratio regardless of the consequences and the idea that $5 gasoline will somehow undo Barack Obama is pretty hard to imagine.

The reality is that Barack Obama doesn’t need to get rid of $5 gasoline to become reelected. He simply needs to use it as a foil with which to pillory his opponents and demagogue corporate profits. At the end of the day $5 gasoline is not a net negative for Barack Obama. It allows him to play the populist advocate who is seeking to break the stranglehold big business in general and Big Oil in particular have on the American people. Populist messages sell, particularly to those who are warm and comfy in the swaddling clothes of government largess and who don’t want to be forced to stand up and venture out in the world and actually take care of themselves.

COMMENTS

  • antonio

    Somehow I pay $3.93 where I live.

    • APA Guy

      I realize that Marx predicted that we would all be herded into cities as communism overtook socialism, but to the best of my knowledge that hasn’t happened yet.

      SOME parts of the country are already paying at or near the $5 level. The cost of living in other parts of the country dictates that prices will vary. In any event, wasn’t the cost of a gallon of gasoline under $2 when Obama took office? Are you OK with paying more than DOUBLE the price for that gas now?

      Don’t be shy..we all know liberals want $10/gallon gas so people will be forced to stop using gas and you can “save the planet”. Now is the time to step up and claim your prize.

      • dajeeps

        As we had in 2008/9, that’s why oil/gasoline prices were so low. Demand has started to recover and the supply problems have been made worse, which is why, in real terms, it is even more expensive than it was in the summer of 2008. If we had the kind of roaring economy now that we did going into the Great Recession, we would likely be paying double what we are now.

        I don’t think anyone will really like what I have to say about it, but I’ll say it anyway. Obama is partially right, the more drilling we do here, the more the oil cartels will reduce output to keep the price from collapsing. It is, after all, a global market, and global supply issues are killing us. We can either do something about the cartels (and I don’t think we have the will or desire to liberate the markets all across the middle east) or we need to switch to LNG. Just a few minor modifications are required on gas-powered cars so they can use LNG. It’s ~80% cleaner than gasoline, and we have so much natural gas here, that it would be really cheap.

        The Obama admin should have been working on this over the last three years if it really wanted to solve our energy problems, but it is full of complete idiots. And so here we are, three years later with none of the problems solved, with Tweedle Dee and Dummer attacking fracking.

  • CrabCakes

    I can’t find anywhere in America, not even Hawaii, on gasbuddy’s list.

    Also, the cost of living in the suburbs, exurbs, and rural areas is that you spend more of your budget on gas. Sure, you can buy a giant house for less than my little Baltimore row home, but the tradeoff is that you have to pay more to get to work and back (not to mention getting to all of the fun stuff in the city!). If you like the suburbs, great. But don’t whine that you don’t get a cheap commute *in addition to* a cheap house. That’s just greedy.

    With the way Asia is booming, gas prices aren’t going down no matter what we do. Even the most aggressive drilling and efficiency efforts would only slow the inevitable price climb.

    Of course, suburbanites could say thanks to us urbanites for using so little gas, which reduces demand for and the price of gasoline, making it more affordable for people to live suburban lifestyles if they so choose. I’m fine with going unappreciated, though; being able to walk to my favorite bar, restaurant, and grocery store is reward enough on its own.

    • CrabCakes

      .

    • APA Guy

      There are pockets in D.C, CA and FL (Orlando is the city I read about) with gas as high as $5.89/gallon.

      Your little swipe at rural workers is sickening, by the way. “The cost of living in rural areas”? So rural workers who have to drive where the jobs are are ASKING to pay more in gas and should be punished by Obama’s terrible energy policies?

      You should clarify…because as a rural resident who works in the city, I resent your implication that I am somehow deserving of being punished for refusing to abandon the Indiana heartland.

      • CrabCakes

        My point is that if you choose to live far from where you work, for whatever reason, then more of your budget is going to go toward getting you there. Since global demand for oil isn’t going to decline any time soon, you can expect the percentage of your budget that goes toward gasoline to be higher in ten years than it is now. If you can’t afford for gas to be more expensive in ten years than it is now, then move somewhere that is either smaller or closer to where you work or buy a more fuel efficient car. If you can afford to live like you do now even when gas prices inevitably go even higher than they are now, though, then enjoy the suburbs. Just don’t whine that gas is expensive when you’re enjoying the benefit of a bigger house for less money by living so far away.

        Incidentally, gas prices as they are today have little to nothing to do with Obama’s energy policies. Global oil production is higher than it has ever been. The issue is that lots of places, like China, India, etc. are consuming *lots* more oil than they used to. That drives the price up. Could the U.S. drill more to produce more oil? I’m sure it could, but at present the U.S. produces less than 10% of the world’s oil. Even if we doubled that (which we can’t), we’d increase the world’s oil supply by 10%. That isn’t enough to bring prices down in any real way.

        • APA Guy

          …are allowing large quantities to be exported. As you may or may not know, the issuers of these leases can stipulate the terms by which the oil is distributed. Right now, these companies pay their royalty…then send the oil to the highest bidder. What is keeping us from stipulating that a condition of getting these reduced contracts for domestic drilling is that the oil stays on the domestic front? Answer: NOTHING…except Obama’s desire to drive the price up so high that we can’t afford to consume it. Environmentalist idiots are running energy policy in his administration.

          By the way, suppose we all just accept high gas prices (as you seem to be suggesting) and move to where the jobs are. What are we to do with the countless rural towns that will be abandonded as a result? The premise of your argument is absurd. Either pay the artificially-bloated gas prices or move in mass out of small towns because there aren’t enough jobs in those towns to sustain the population…yes…GRAND IDEA.

          Honestly, you sound like an Obama supporter with that drivel. Libs HATE small town USA because small town USA doesn’t share Euro values. To advocate a bend-over-or-vacate-small-towns approach is reprehensible…sorry, but it’s the truth.

          • CrabCakes

            Brilliant. At least you acknowledge that more drilling isn’t going to do much for global oil prices unless we artificially keep domestic prices below market value by forcing drillers to sell their oil here. Doesn’t sound very “small government” to me.

            I don’t care where people want to live. Live wherever you can afford. I don’t see small towns as inherently superior to big cities or vice versa. Good and bad people live in both. Pardon me for not want to subsidize the suburbs with bad trade policy, though.

        • Scope

          RS must be hitting the big time, as we now have Ken Salazar posting here.

          Do you even have a clue that jobs are hard to come by for millions, and when you have to travel to the only job you are lucky to have, it doesn’t help to not have enough paycheck left for food and/or mortgage payments after paying the high cost of gas? Do you understand how costly it is to pull the family roots up and move cross state, or across the country? What good does it do to move when the cost of everything is going to go up because of the high gas prices, and that is happening across the nation.

        • Jack_Savage

          So if I can’t afford $5.00 gas I should move? What makes you think I can afford to move if I can’t afford $5.00 gas? Do you have the slightest friggin’ idea the effect higher fuel costs have on all the other goods and services that we buy? The SLIGHTEST friggin’ idea?

          Obama’s energy policies have little to do with gas prices? The magical gas price fairy does, though?

          I swear, Obama’s apologists are deaf, dumb and blind, and I don’t mean in a “I can’t help it” way.

          • CrabCakes

            I don’t support subsidizing the suburbs when it isn’t economically feasible for them to exist on their own.

            And yes, energy policies do affect price, but not nearly as much as good old supply and demand. Demand is skyrocketing globally; attempting to keep prices low in the face of that fact is swimming upstream.

          • Scope

            You don’t want the government to subsidize those living in small towns or rural areas, because according to you there is no advantage to living there. Then you come back and say you want the government to subsidize people’s moves to the big city. You have got to be a liberal who believes that moving everyone into the cities makes them more manageable and easier to control. In other words, you have no problem with big government doing what ever it dang well pleases. BTW, what government subsidies are being expended in small towns and rural areas that are not being spent in larger cities?

          • CrabCakes

            I support government giving temporary help to people if it will help them to remain productive and self-sufficient in the long-run. I don’t support the government helping people to live places that aren’t economically feasible anymore. If the government can make the suburbs economically feasible without perpetual subsidies (i.e, if it funded R&D for the creation of a car that runs on solar power, etc.), then great. If we’re talking about going all protectionist on our oil supply, then no thanks.

            As to government subsidies for the suburbs, I know of no state government who fully funds its highways out of gasoline taxes and other automobile related revenue. They almost all (if not all) draw some of their highway budget from general funds. That means that my state income taxes go toward funding roads that I rarely use to make it more affordable for people who make half-hour commutes to live in big houses in the suburbs.

          • jimmyg

            Just for starters:

            The USDA’s rural programs are grouped in three areas:

            The Rural Business-Cooperative Service (RBS) provides grants and loans to rural businesses, and it funds organizations such as the National Sheep Industry Improvement Center.3
            The Rural Utilities Service (RUS) provides grants, loans, and loan guarantees to electricity, telecommunications, and water utilities in rural areas.
            The Rural Housing Service (RHS) provides rental assistance to tenants, subsidizes housing developers, facilitates home ownership, and promotes community development through a variety of grant and loan programs.

            http://www.downsizinggovernment.org/agriculture/rural-subsidies

            don’t want to get in the weeds with crab cakes, but if you live in a rural area, just about all your utilities are subsidized, including your dial up service.

          • CrabCakes

            It costs me the same to mail a letter from the city as it costs for folks in the country to mail the same letter. It costs the Post Office a lot more to mail their letter than mine, though. My price is artificially high so that theirs can be artificially low.

          • Jack_Savage

            You think low oil prices are to subsidize suburbs? So people in cities don’t buy milk and bread, or go on vacations, or use heating oil?

            And this all time gem:

            “And yes, energy policies do affect price, but not nearly as much as good old supply and demand.”

            No s**t, Sherlock. That’s exactly what the entire diary is about. That’s what Obama’s policies affect. Supply. I typed that real slow for you.

            You honestly are trying become a caricature of a parody of a conservative’s view of liberals.

          • CrabCakes

            And for how long? Like I said, even if we doubled our production, we still wouldn’t increase global supply by 10%. So we aren’t going to dramatically impact the supply part of the supply/demand curve, and the demand part is continually rising thanks to the Asian boom, so where are prices going to go?

          • Scope

            We need to think about supplies for our own country, which by everything I’ve read we have enough natural resources to keep us supplied for more years than you will be alive, and I don’t care if your twenty something. It seems that you have totally and completely missed that most every politician says that we need to be less dependent on oil from countries that don’t like us, and the only way that happens is by producing our own supplies. Did you miss the comment above that talks about Obama selling our oil supplies to other countries, while we have high costs for that supply at home? Do we really need to be controlled by OPEC?

          • CrabCakes

            Unless you want the government to force domestic oil to be sold domestically and you think that other countries wouldn’t retaliate, setting off a lovely little trade war, then there is no way to keep domestically produced oil here.

            It’s bad economics, bad foreign policy, and would more than likely end up with *higher* oil prices for Americans than if we let the market work its magic.

          • APA Guy

            I love how lessening our dependence on foreign oil is now viewed by liberals as “protectionism”. Take that schnit on over to kos where it belongs.

            This is called looking out for American interests first. We have bowed to oil cartels long enough.

          • CrabCakes

            I’d simply prefer lessening that dependence via decreased consumption than via protectionism, which is exactly what forcing domestic drillers to sell their oil domestically is (pretty much by definition).

          • Jack_Savage

            But you propose never to find out.

            Nice policy. It has really helped.

          • CrabCakes

            Great plan. Or you could look at current domestic reserves, the cost of extracting them, the potential increase to global supply, and come to the conclusion that we just don’t have enough oil to significantly bring down global oil prices.

            If you’re ideologically committed to drilling more for the sake of drilling more, that’s fine. Just say so. It’s a lot more honest than pretending that there’s any evidence whatsoever that more drilling is going to make any noticeable difference in American gas prices or that there isn’t plenty of evidence that it won’t.

          • Jack_Savage

            Supply. Demand. And all that stuff.

            Hey – by the way – what’s real estate doing up in North Dakota? Going up? How about unemployment? Really low? I wonder why? Is it because the government is subsidizing people up there? No?

            Hmmm…..

          • CrabCakes

            I just don’t see any evidence whatsoever that it will bring down gas prices. The numbers I do see tell me that we just don’t have enough oil to make an impact.

            And, yes, drilling can be good for local economies. If you want to argue that drilling is good because it’s good for North Dakota, then that’s fine. Let’s not pretend that it’s having any real impact on gas prices for the rest of us, though. If you want to turn a few suburbs into oil towns, that’s fine, too. I don’t think that’s what most suburbanites want, though.

          • Jack_Savage

            Here is what I have learned tonight:

            1) Increasing the supply of oil has no effect on prices.
            2) The President of the United States has no influence on the price of gasoline whatever, and it is silly to suggest so.
            3) Low gas prices are just a sinister plot to subsidize suburbs, and everyone knows that cities are safer, more convenient, and much better run. Plus, the quality of life in cities is fantastic for, say, a family of five.
            4) Low fuel prices have no effect on the prices of any other goods and services we buy, which is just another reason for Barack Obama to be excused for his incompetence on this issue, because it doesn’t matter anyway.

            Got it. Thanks!

          • CrabCakes

            then you have a promising career as a literary critic ahead of you.

          • Jack_Savage

            “Pardon me for not want to subsidize the suburbs with bad trade policy, though.”

            “Incidentally, gas prices as they are today have little to nothing to do with Obama

          • CrabCakes

            I don’t want to subsidize the suburbs by resorting to neo-protectionism, do you? I didn’t say that cities are better than suburbs. In fact, I said the opposite three different times in three different sentences just before the quotation you pulled. As I’ve said repeatedly, if you can afford to live in the suburbs, then have a ball. Just don’t expect people who choose to live in the city to foot part of your bill.

            The key word in that second quotation is “today.” I never said that government policy can never have an effect on gas prices. All I said is that the present rise in oil prices is almost entirely due to increased global demand due to economic growth in Asia. If we started drilling in every conceivable spot the day Obama took office, the oil prices today wouldn’t be very different from what they are now.

            And finally, people who live in rural areas who also work in rural areas are different than people who live in rural areas but work in the city. The former don’t have half-hour commutes like people who live in rural areas because they like big yards. If you don’t like paying high gas prices, then live near where you work, whether that’s the city or the country. If you don’t want to live near where you work, then don’t complain when gas prices continue to climb as the rest of the world industrializes.

          • APA Guy

            …twice on Sunday.

          • CrabCakes

            Right now we consume over twice what we produce. So we’d need to double domestic production to continue using as much as we do now, which isn’t feasible even with the most aggressive drilling. Even if we could double domestic production, though, gas prices would still go up, since the oil in the Middle East is cheaper to get at than the oil in the Gulf of Mexico, especially the deepwater reserves.

            Or we could consume less oil by either driving more fuel efficient cars, by ceasing to subsidize inefficient residential areas, or a combination of the two.

            Personally, I’d be happy if highways had to be fully paid for out of gasoline taxes, rather than forcing people like me to subsidize suburban commuters. People who can afford to pay for the highways they use should be allowed to live as far from their jobs as they want. People who can’t should move, rather than expecting me to subsidize their half-acre yards.

          • APA Guy

            Increasing domestic production = higher gas prices…is that why Obama approved of the OK to TX Keystone segment – because he wants HIGHER gas prices? After all, it relieves a bottleneck of domestic supply. Is that why he approved oil leases that had been previously delayed during the Obama moratorium?

            Demand is already easing down…is THAT why gas prices are $4-5/gallon and oil hovering just below $110 a barrel?

            MORE federal spending on highway projects? Hasn’t that task always been more historically reserved for the states to decide and fund? And how exactly do you propose we fund such initiatives without more oil leases…which provide royalty revenues that constitute the 2nd largest source of government income next to income taxes?

            And even if we did, I don’t know what YOUR assessment of the impact of the Obama “stimulus” was, but in there parts, the stimulus didn’t create nearly the amount of jobs Obama promised.

            Your assertions are falling flat. Does anyone except maybe Alan Grayson agree with them?

          • CrabCakes

            If you want to increase domestic supply, then, yes, you’d bring global prices down. For example, if we doubled our domestic supply, then global supply would increase by just under 9%. A 9% increase in global supply, though, isn’t going to have a giant impact on gas prices. Additionally, doubling our domestic production is far more optimistic than I’ve seen anyone suggest is possible.

            If you’re talking about not buying oil from OPEC and instead relying on our own reserves as your comment seemed to indicate, though, then you’re talking about some pretty fierce protectionism. That would indeed mean higher gas prices.

            Finally, I’m not talking about more spending on highways. I’m talking about funding highways solely with gasoline taxes. The people who use highways should have to pay for them, not those of us who prefer to live near the places we work and shop. To fully fund the highways at their current rate, we’d have to add about another 50

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