Posted on 06/10/2008 9:32:29 AM PDT by pissant
The recent spike in oil prices and unemployment is dramatically changing this presidential campaign — virtually overnight. The near $20 jump in oil to $140 a barrel, the unexpected half-point increase in the jobless rate to 5.5 percent (the biggest monthly increase in 20 years), and the resulting 400-point plunge in stocks has created a new campaign issue right before our eyes.
Public worry number one is now oil, jobs, and the economy, with the inflationary woes of the U.S. dollar right underneath. The candidate who can connect with these issues will win in November. But so far neither Obama nor McCain are dealing with the new political reality.
In fact, it’s all about oil right now. The price has doubled over the past year while the economy has slumped.
But here’s an eye opener. Recent polling data from Gallup show the percentage of voters blaming oil companies for skyrocketing gasoline prices has dropped from 34 percent to 20 percent over the past year. At the same time, support for more drilling in U.S. coastal and wilderness areas has increased to 57 percent from 41 percent.
And the candidates remain blind to these shifts.
Obama continues to lambaste oil companies while congressional Democrats push for cap-and-trade. They’re missing the point, big time. The public wants more energy and more fuel to cut high prices and spur economic growth. But the costly cap-and-trade plan would produce less fuel and less growth. It would only raise gas pump prices while mounting a Gosplan-type taxing, spending, and regulating program that would be the moral equivalent of Hillarycare on nationalized medicine.
Sen. McCain has an opening here. Yet he, like Obama, would have voted for cap-and-trade, which went down to defeat in last week’s Senate vote. And while Mr. McCain favors some off-shore production and has been strong on nuclear development, he is against drilling in ANWR Alaska.
Then there’s the oil nobody is talking about. The Bakken fields beneath North Dakota, Montana, and Canada hold an estimated 400 billion barrels of oil. In comparison, Saudi Arabia’s biggest field, Gahawar, has an estimated 55 billion barrels, while ANWR has an estimated 10.4 billion barrels.
Hat tip to Mark Perry at the Carpe Diem blog site for these figures. Perry also is reporting a Bureau of Land Management study showing 279 million acres under federal management where oil and gas could potentially be extracted. But more than half of this is totally off limits. Off-shore, where another 86 billion barrels lie in wait, is also restricted. Then there’s liquefied natural gas, oil shale, and the various coal-to-liquid carbon-capture and sequestration technologies that would be priced out of the market by cap-and-trade.
The U.S. is the Saudi Arabia of coal, but we can’t produce. We’re still the world’s third-largest oil producer, but we could be the Saudi Arabia of oil if our companies were free to drill. Oil CEOs like Rex Tillerson of ExxonMobil and David O’Reilly of Chevron keep saying this. But politicians aren’t heeding their message.
Israeli saber-rattling against Iran could have accounted for some of last week’s huge oil spike. And the unemployment story may not be as bad as the May jobs report suggests. An unexpected inflow of teenagers probably bloated the jobless figure by a couple tenths of 1 percent. And economist Jerry Bowyer points out that an unprecedented hike in the minimum wage may be derailing students looking for summer work. However, in a sign of future job improvement, the civilian labor force grew by nearly 600,000, meaning that more people looking for work could signal recovery. Weekly jobless claims are near 350,000, not the 500,000 of past recessions. Overall, at 5.5 percent, unemployment continues to be historically low.
But the economy is still in a slump, not a boom. And the fact remains that Americans are very worried about the economic outlook. This could be a recession election. And right now voter economic anxieties are all about oil, even more than the sub-prime housing credit problem.
Sen. McCain has a great pro-growth plan to slash corporate tax rates, a move that would be a strong tonic for jobs and wages. But he must bolster that plan with a new emphasis on deregulated energy markets that can produce a total portfolio of conventional and non-conventional energy, including major new drilling. He should couple that with a strong-dollar message to curb both energy and non-energy inflation, which is shrinking consumer paychecks and damaging corporate profits.
More oil, more jobs, better wages, and low inflation. That’s a winning GOP message this fall. But what if Sen. Obama gets there first? It’s unlikely, but not out of the question. Either way, voters will move to the candidate who connects with their worries. Right now those worries are up for grabs.
I am all for alternative sources, but all of the ones we already know about still require lots of work.
I have written to the McCain campaign so many times that, if he does win, I’ll probably be audited by the IRS every year for the rest of my life. Everyone else needs to write and tell him, and his staff, that you know of a surefire campaign issue and position he can take that will win him the election: drill federal land and push for offshore drilling. If he doesn’t, he runs the risk of being as deaf, dumb, and blind, as he was on the “amnesty that’s not really an amnesty” issue.
Locating, drilling, and producing oil is a tremendously expensive undertaking. Its not done in a day, but I’m sure the majors could get it done in record time IF Congress suddenly gets smart.
My son, working in Germany, tells me that the EPA will not allow European diesels. They aren’t “clean” enough.
You'd get a better product going after whales.
Just going out to fill up my SUV.
The RNC needs to run an ad showing all the Democrats saying "We need HIGHER gasoline prices...we aren't paying ENOUGH for gasoline....Europe pays more, so should we".!!! It would be a LANDSLIDE to Republicans!
DRILL IN ANWAR.....DRILL OFF THE COAST (China is)!!!! BUILD REFINERIES on OLD Military Bases!!!!
This is the “AMNESTY” issue of today and we CHANGED what happened to AMNESTY!!! CALL CONGRESS....DRILL and REFINE...HERE in AMERICA!!!
BUMP to that!
Senate GOP blocks tax on Big Oil
Most people won't read past those headlines today. We're toast.
sw
Dream on
Methodology: Retail gasoline prices are the result of literally hundreds of factors including crude oil supply, global demand, refinery capacity, regulation, taxes, weather, the value of the dollar, etc. Therefore it is impossible to say with certainty what one individual action will do to the overall price. However, based on what we know about the impact of crude oil supply and prices it is possible to develop some potential ranges of impact on gasoline prices for certain policy changes. For example, using the methodology employed by Speaker Pelosi and House Democrats that suspending shipments into the Strategic Petroleum Reserve (between 40-77,000 barrels of oil a day) would reduce gas prices by at least 5 cents, bringing ANWR online (at least one million barrels of oil a day) could impact gasoline prices by between 70 cents and $1.60.
So you agree with Pelosi’s campaign tactics, and disagree with Blunt’s?
They are all wrong. Anti-trust has caused this situation. Allow Standard Oil to re-integrate, vertically, and the price of gasoline can be half what it is now.
You should contact Roy Blunt, let them know your idea.
In Washington DC:
217 Cannon House Office Building
Washington DC, 20515
(202) 225-6536 (202) 225-5604 Fax
Without competition, monopolistic practices might again ensue.
The end-to-end distribution efficiencies and reduced number of transaction costs gained compared to the present distribution chain might merely go to the bottom line—not that that is automatically bad, for it is indeed capitalism; but we must guard against unconscionable strangleholds by multinational corporations. Not that we’ve done a great job lately....
J D Rockefeller did provide the best price possible. His predatory method of eliminating competition drew attention and the eventual anti-monopoly legislation, not the existence of monopoly in itself. There is nothing inherently evil in monopoly even though it is also the economic managment technique of Russian Communism and German National Socialism.
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