Mullings Commentary: Hot Air About Gas Prices

April 25, 2011 - 3:48 AM

Gasoline prices are continuing to rise and it's all Obama's fault. Ok, that was just to get your attention, but let's look at the numbers.

The national average for regular unleaded gasoline, according to the Lundberg Survey stood at $3.88 a gallon on April 22, up about eleven-and-a-half cents per gallon from April 8.

According to Reuters, that "price was still below the July 11, 2008 all-time high of $4.11" but AAA Mid-Atlantic is warning drivers that a national average of $4 per gallon gasoline by Memorial Day weekend is still a very real possibility.

Spokesman John Townsend said, "Easter weekend is here and Memorial Day weekend is just five weeks away, which has motorists wondering just how high will gas prices climb before the unofficial start of summer arrives."

In Alexandria, Va., it looks like prices range from about $3.99 to $4.19 per gallon for regular.

Keep in mind, this spike in gasoline prices is occurring while unemployment remains stubbornly close to nine percent, and estimates for the first quarter GDP growth (due to be released on Thursday morning) are for a barely above-water 1.7 percent.

That should put the brakes on gasoline price increases because more people will be concerned about their economic futures and so will drive fewer miles and buy less gasoline.

President Obama's poll numbers from normally friendly polls in the NY Times and Washington Post show his approval for handling the economy sinking. The Post poll (taken in conjunction with ABC News) shows only 42 percent approve, while 57 percent disapprove.

Up in New York City, the Times (which teams up with CBS News for these polls) is even worse with a 38-57 deficit on his handling of the economy.

GDP, Balance-of-Trade, and the strength of the dollar versus the yuan are not the stuff of Monday chatter around the coffee pot in most businesses. The price of gasoline is.

So, if Obama's numbers are gas-tanking, the political/policy czars in the White House need to find someone to blame, and fast.

The President has announced the formation of yet another task force, this one in the Department of Justice to look for fraud and illegal manipulation of gasoline prices.

According to the Christian Science Monitor, "The Oil and Gas Fraud Working Group is being organized as an arm of the President's Financial Fraud Enforcement Task Force."

I'm not certain why we need a task force to enforce financial fraud, but that's may be why we're having so much trouble getting our arms around federal spending.

No less than the Huffington Post joins those warning of the political dangers Obama faces because of gasoline prices. In a piece by Mark Smith, this: "With gas prices climbing and little relief in sight, President Barack Obama is scrambling to get ahead of the latest potential obstacle to his re-election bid, even as Republicans are making plans to exploit the issue."

Republicans can point to the mostly-still-in-effect ban on deep water drilling off America's coasts, but it is not clear that enough oil would be produced to make a major dent.

There might be a bunch of guys sitting in a bar outside of Houston who are manipulating world oil prices -- I'm serious; that could be -- but it is far more likely that the resurgent economies in the BRIC nations (Brazil, Russia, India, and China) plus the fact that the world is close to having peaked in its ability to locate, drill for, and produce oil means more industrialized nations are chasing less oil.

Demand rising + Supplies dwindling = Prices increasing. Even I understand that.

About a jillion Chinese are joining the middle class from having been subsistence farmers and local merchants. People in the middle class in China (or Russia, Brazil and India) want the same things as middle class Americans in Ames, Iowa: Cars, TVs, air conditioning, and Kraft Dinner.

Manufacturing almost anything takes oil. Moving raw materials to the factory, and moving the finished goods from point A to point B takes oil.

Rather than spending more millions of our tax dollars on even on more government employees looking into whether private companies are doing anything wrong, it would be nice if the President would look for ways to incent private companies to do something right.

The only good thing about $4.00 gasoline is that Obama will not be able to push for what his liberal allies want most of all: A dollar-per-gallon tax on gasoline to cut consumption.

That would be Obama's fault.

On the Secret Decoder Ring today: Links to the Christian Science Monitor and the Huffington Post looks at gasoline prices. Also a really nice Mullfoto from our trip to the West Coast this past weekend and a Catchy Caption of the Day.