By Tom and Karen Lantz
Ben Franklin said, “Nothing’s certain but death and taxes.” But Ben never had to fill up his S.U.V. Gasoline prices aren’t as high as when they peaked under George Bush in 2008. But they’re rising steadily.
One of us bravely taught the drooling students in the macroeconomics class from which Ferris Bueller justifiably took the “Day Off.” But anybody can see it’s a Brave New World oil market. Remember the movie “Back to the Future,” when the car pulled into the 1950s gas station, and five guys in uniforms sprinted out to service it?
The good news is, the American economy has been improving for three years.
But that’s the bad news, too.
The resulting increased demand for oil in the U.S. is one reason for increased gasoline prices. Increased demand in the developing, “[email protected]” countries is a second reason.
“Now that-we’ve-won-in-Bananastan, let’s-declare-war-on-Iran” war-jitters is a third reason for higher pump prices. 20 percent of the world’s oil is shipped through Iran’s neighboring Strait of Hormuz. Fear of supplies being cut off makes airlines and other big users willing to pay more, to guarantee future supplies.
“Don’t-buy-Iranian-oil” sanctions, which, though they’re an appropriate diplomatic effort to avoid war, cut off our nose to spite our own economic face, is a fourth reason. We’ll see if Saudi Arabia keeps its promise to pump enough extra oil to keep the lost Iranian oil from driving up gas prices.
Wall Street speculators bidding up the cost of oil is a fifth reason. President Obama’s new Consumer Financial Protection Bureau is trying to control the hundreds of billions of dollars – twice the usual amount – pouring into the oil “futures” market from Wall Street. (Experts say speculation by non-oil-users is adding 56 cents to the price of each gallon of gas.) But certain congressmen (not Sam Farr) and Wall Street law firms have been stonewalling the C.F.P.B.
And last-but-not-least is Big Oil. It’s not drilling on a lot of its federal oil leases. Big Oil just shut down some perfectly good American refineries. That cut the supply and upped the price of refined gasoline. The top five oil companies alone made a record $137 billion in profits last year.
The rising gas prices are dragging down our rebounding economy. (Our rebounding economy, for any Ferris Buellers who haven’t been taking notes, was the first reason we listed why prices are rising at the pump.)
And our economy will keep bouncing back. The last two years, we gained four million new American jobs. The past three months averaged almost a quarter-million new jobs a month. That’s despite state and local governments’ pink-slipping a quarter-million workers just in 2011, (taking a lot of President Clinton’s 100,000 new cops off the street), after the stimulus ran out. Dow-Jones stocks are worth twice what they were after the Bush Crash. Nasdaq stocks are the highest in 11 years – since Clinton left the White House.
European governments’ spending cuts sent their economies slumping back into a “double-dip” recession. That’s kept gas prices down a little.
But our economy grew at 3 percent a year the last “quarter” of 2011. So now, we use 20 percent of the world’s oil, while producing only 2 percent. And we rely on war or the threat of war to protect the U.S. oil supply.
So President Obama has been reducing our dependence on foreign oil. Obama’s support of “green” energy and higher fuel efficiency and his successfully increasing domestic oil production has reduced our dependence on foreign oil to 45 percent of our consumption. That’s down from 60 percent.
In fairness to Bush, “W’s” $4.12 national average for “regular” low-octane gas, compared to the $3.81 national average on March 14 of this year, wasn’t all HIS doing, either. (Though ”W” claimed that Iraq’s second-biggest-in-the-world oil reserves would pay for his “weapons of mass destruction” wild goose chase. Instead, “W’s” wild goose chase cost us a lot of the $3 trillion eventual bill for Bush’s wars – wars that helped raise the price of gas to that $4.12 national average for low-octane, in less-inflated “2008 dollars”.)
American presidents are like the Wizard of Oz: like Dorothy, Americans aren’t happy when we find out how limited the Wizard’s power is. But we have a Constitution full of “checks and balances”. It was written by long-haired revolutionaries who didn’t want to empower another King George III-style “tyrant”. And imposing “socialistic” wage and price controls, like President Nixon did to combat economy-wide inflation, would only reduce the supply of gas at the pump. And that would only result in lines of cars blocking traffic while they wait for a fill-up – reminiscent of the 1970’s.
Experts agree the price of oil is set by worldwide conditions. Many of those conditions are beyond our control. Maybe those who expect the Wizard of the White House to wave Harry Potter’s magic wand over our gas pumps should recall what the great Will Rogers advised: “Be thankful we’re not getting all the government we’re paying for.”