Until now, Barack Obama has had some mildly good news on the economy, with weekly jobless claims sticking around the 350k-370K range and a boost in job creation in January. Unfortunately for Obama and all of us, the same problem that strangled the economy in 2008 and 2011 is about to hit the US again. NBC’s Today show reports on the significant price hikes coming in the price of gasoline:
If gas prices hit $5 per gallon as some economists now predict, that hits consumers in more places than just the pump. Gas price hikes raise prices throughout the distribution chain, especially at the grocery store. That kind of rapid rise in gasoline prices will quickly erode the small gains in consumer buying power from the last few months, leaving less disposable income and putting downward pressure on demand. That will reverse any gains in the economy and kill Obama’s chances of claiming economic growth when voters really start paying attention to the general election this summer.
This is no one’s fault more than Barack Obama himself. He blocked the Keystone XL pipeline that could have mitigated the price of gasoline, at least in the futures market. Over the three years of his presidency, he has blocked exploration and extraction in the Gulf of Mexico as well as on shore in the US, eliminated more domestic sources of oil that would shield us from price shocks on the world stage. That shortsighted energy policy will haunt his re-election efforts — and the White House knows it. I’d expect calls for another release from the Strategic Petroleum Reserve, even though the SPR doesn’t have enough to impact the long-term rise of gas prices and isn’t supposed to be used for political purposes of getting re-elected anyway.
Update: The indispensable Ed Driscoll remembers when NBC begged Obama to push the price of gasoline above $4:
Did I call this yesterday or what? NBC’s Matt Laurer begins a Today Show segment on rising gas prices by saying, “There’s some troubling news. Gasoline prices are back on the rise, and some analysts say it could get even worse, just in time for the summer driving season.”
If Matt sounds even more robotic than usual reading the script in his ‘prompter, that’s because the dean of NBC
newsreadersanchormen pleaded with incoming president-elect Obama on Meet the Press to raise gasoline prices, when they were temporarily at their lowest, back in early December of 2008:
TOM BROKAW: Let’s talk for a moment about consumer responsibility when it comes to the auto industries. As soon as gas prices dropped, consumers moved back to the larger cars once again. The SUVs are the big gas consumers. Why not take this opportunity to put a tax on gasoline, bump it back up to $4 a gallon where people were prepared to pay for that, and use that revenue for alternative energy and as a signal to the consumers: “Those days are gone. We’re not going to have gasoline that you could just fill up your tank for 20 bucks anymore.”
Be sure to read it all.
Update II: Tom Elia has some hypocrisy from Nancy Pelosi, too:
With gasoline prices nearing $3.50 a gallon in some places — with expectations they are heading higher — maybe it’s time to go back to April 2006 in order to review the wisdom of Rep. Nancy Pelosi (D-CA), as she expressed then her theory on rising gas prices at a press conference. (The video of her comments, which used to be located here, has been surprisingly [unexpectedly!] deleted.)
Her theory? Suffice it to say that it involves George Bush, Dick Cheney, and Biiiiiiiig Ooooooiiiiiilllll.