RISING GAS PRICES: JUST THE FACTS
It’s official. Gas prices have hit $4 per gallon. Heading into last weekend, Chicago’s CBS 2 News reported, “Premium gas at some Chicago pumps has reached an unfortunate milestone-$4 a gallon-and its not even Memorial Day yet.”
While prices have yet to hit $4 in Texas, they are certainly heading that way, much to the dismay of Texas families and businesses. The Associated Press reported this week that gas prices spiked once again, according to analysis from AAA, “Gas and diesel pump prices jumped to yet another record Friday, piling on the costs for motorists as well as consumers reliant on trucks, trains and ships that deliver goods to market.”
In 2006, then House-Minority Leader Nancy Pelosi promised Americans that “Democrats have a common sense plan to help bring down skyrocketing gas prices.” The truth is-over a year later-the price of gasoline in Central Texas has risen from $2.74 to $3.31 and diesel has jumped from $2.88 to $4.04, according to AAA. With the travel season just a month away, this news could not come at a worse time for Texans planning their summer vacations.
Now, in what seems to be a desperate attempt to discredit progress being made in Iraq, many Democrats are linking the slowing economy and record gas prices to the success our troops are having in Iraq. According to leading columnists and economists, this presumption is false. Below are quotes from recent articles, many written by liberals, discrediting this assumption.
• Princeton University Economist and New York Times Columnist Paul Krugman: “An Iraq recession? One thing I get asked fairly often is whether the Iraq war is responsible for our economic difficulties. The answer (with slight qualifications) is no…” (“Conscience of a Liberal,” 1/29/08)
• Martin N. Baily, a former chairman of President Bill Clinton’s Council of Economic Advisers: “…[T]he current problems the United States is facing [with the economy] have very little to do with the war in Iraq.” (The Washington Post, 4/15/08)
• Max Boot, Senior Fellow at the Council on Foreign Relations: “In short, it is absurd to suggest that a lack of Iraqi production is responsible for the rise in oil prices; the likely culprits are increased demand in China, India, and other emerging markets.” (Commentary Magazine, 3/21/08)
• Trilby Lundberg, editor of the nationwide Lundberg survey on the “essential causes” of high gas prices: “The essential causes are strong crude oil prices, dramatically higher ethanol prices and seasonally rising gasoline demand.” (Reuters, 4/6/08)
The truth is that the rising cost of gas can be linked to simple supply and demand. Demand continues to go up, but our supply is starting to decrease. According to the U.S. Energy Department, inventories of gasoline fell 5.5 million barrels last week, a much bigger decline than forecast by analysts surveyed by Dow Jones Newswires. Crude inventories fell 2.3 million barrels last week, the department’s Energy Information Administration also reported, compared to the gain analysts expected. We can’t expect to see gas prices go down if we don’t increase our supply.
Congress needs to stop blaming our soldiers, blaming the President and blaming each other for skyrocketing gas prices. Legislation that simply raises taxes on American oil companies isn’t going to alleviate the problem either. In fact, it will only make the burden heavier for consumers. We need to get down to the facts and start passing legislation that will encourage conservation and promote the research and innovation necessary to develop new technologies. But, while doing this, we must also unlock new oil supply. We live in a world where people still put gasoline in their cars, so we can’t expect new technology to take the place of oil and gas over night. Good reforms to energy problems are the only way Americans are going to see lower energy prices, and it is time Congress starts doing something about it.
April 21st, 2008 at 1:40 pm
[…] oil corporation profits when talking about high gas prices. Blaming high gas prices on just “supply and demand” without any context is misleading, to say the least. Of course this war, that has now cost us more […]
April 22nd, 2008 at 4:57 pm
The supply and demand argument is valid, and though one may argue our Foreign policy and presence in the Middle East as a factor, one thing for certain is the borrowing to fund our empire and the resulting devaluation of the dollar relative to our decreasing buying power in the world market.
I believe that the government engaging in “energy” legislation will only further burden industry and the citizen taxpayer. The market will resolve the energy issue without the current/ongoing destruction of our enviroment by the agricultural activity and the resulting polluting of the waterways and the Gulf of Mexico [in order procure federal redistributions for ethanol corn in the form of subsidies] which has adverse affect on the fisheries.
Mark
April 24th, 2008 at 5:02 am
We live in a RICH COUNTRY compared to those around the world. There are Third-World Countries that would love to have just the very basics of what we, as Americans, have. My husband and I are in - I guess you could say the lower Middle-Class White Collar Bracket. And we are both employed with no children, we own our own home - modest though it is. We have one vehicle and car-pool. I have worked for the state almost 29 years and my husband has worked for the federal governement for over 17 years. We have the same concerns for rising health costs - which we pay ourselves (over and above what our jobs don’t cover) … the issue is though, that the COST OF FUEL is ridiculous! There has got to be a stopping point … since when did the Oil Companies begin telling our Government what to do?
It’s beginning to be a decision on paying for gas … or paying for the extra items … so this stimulus payment that the Presisdent is granting is a joke … really!
Please … get together and stop the Oil Companies from any more GOUGING … you do this when there is a major catastrophe!
Thank you.
April 26th, 2008 at 3:36 pm
The parabolic rise in oil prices in the last 6 months can be attributed to simple dollar devaluation. Thanks to Congress’ pork barrel spending for every project and cause under the sun and a weak Federal Reserve that is cowed constantly by Wall St. investment banks our cash really is trash and is not in demand by oil producing nations. Of course we have Hank Paulson almost comically saying the Bush administration supports a strong dollar, when in fact the dollar is at its lowest levels in history according the the dollar index. It should be clear to everyone that the Bush “supply sider” playbook now calls for massive inflation now that their heads are pressed to the mat on the economy. Look for $5/gal gas soon. Can’t wait for my tax rebate!
April 29th, 2008 at 5:55 pm
Here is a suggestion that will help small, medium and large businesses, individuals, and sole proprietors
raise the IRS standard mileage allowance from .505 to any amount higher.
Lowering taxes and lowering the cost of doing business is always a good idea.
April 30th, 2008 at 5:10 pm
[…] stated in this LTE at the RRL: The representative from Exxon, John Carter, in his latest spin attempts to smokescreen why he and Exxon are enjoying record excessive profits at all our expense. […]
May 1st, 2008 at 5:33 pm
Only a year or two ago, $4 gas seemed like a nightmare scenario. Now in spring of 2008 we’re seeing that scenario come to fruition. I think you’re absolutely right - everyone needs to stop playing the blame game and start working together to come up with solutions to these serious issues.
May 3rd, 2008 at 12:30 am
Keep up the good work. Manufacturing is suffering in the USA. Do not give up the fight!!!
May 14th, 2008 at 6:11 pm
Oil exploration, drilling in Alaska and in the Gulf, licensing of clean nuclear and coal fired plants, conservation programs, wind and solar power, all MUST be done. Not one or the other.
Second, the Democrats are playing the useful idiots by blocking at every step the ability to bring new refinaries on line. Oil companies that own refinaries in the USA think thats just great, as competition cannot just come in a build a refinary. Its a monopolies dream.
Three, we’ve got to encourage competition. Mobile and Exxon should not have been allowed to merge. We’ve got to take steps to break up these monopolies that have such a large market share that they find it unnecessary and unprofitable to compete.
May 19th, 2008 at 12:45 pm
What our country is is a giant business. And our problem is that the CEO (President Bush) has no idea how to run a company. We are constanly outsourcing jobs to other countrys because we make it so difficult for people to run corporartions in this county. On gas prices…..we have so much oil in Alaska that we haven’t even touched. Congress needs to messing around with ethanol all that has done is drive up food prices. Lets tap into OUR oil so we don’t have to worry about OPEC. Lets move foward instead of backwards.
May 19th, 2008 at 4:57 pm
Ending the War — Vote taken May15 fro Military Construction and Veterans Affairs & Related Agencies Appropriations act
Rep Carter
Amendment 1: Blank check for war — You did not vote though you were present “good thing”
Amendment 2: Accountability measures to help end the war — you voted “nay”
Amendment 3: Domestic measures, including the new GI Bill — “nay”
It is time that we end this war. “Bush & Chenny” initiatives are not going to work, they have no plan to win this effort. It is time you step up and do the moral thing, vote against the continuation of War. This war cost us countless lives American and Iraqis, It has cost us our balanced budget. It has weaken our economy.
Each time you vote “nay” it delays the inevitable. It takes away funds we can use for infrastructure from our community.
May 21st, 2008 at 9:51 pm
Sir,
I would like to say that I basically agree with your entire blog. However, I think public transportation needs to play a role. More buses, trains, and subways in place would alleviate our dependency on oil. Perhaps our tax dollars should go to work towards that cause.
Also, less finger pointing between the parties in congress would be nice to see. Lets put the politics to the side and do something about this economic disaster before it is too late!
May 23rd, 2008 at 11:11 am
I just discovered your blog and appreciate the fact-filled entry concerning gasoline prices. I lean toward Libertarian, but also must admit that true conservative economic principals work well for our US (and world) economies.
I would love to see the Republican Party increase their chances for success by simplifying their platform and concentrating on a clear message for this November.
1. We are winning the War on Terrorism. The number of lives lost to terroristic acts has decreased since 2001. The cost of the War on Terrorism is far less than the cost of the War on Poverty or the War on Drugs and the results are much better.
2. The gasoline price increase is a symptom of a our lack of a clear energy policy. We must increase domestic supply (ANWR & off-shore)…we must decrease demand (improve rail [instead of trucking] and more safe nuclear power generation [like France].
3. We need a guest worker program for workers who want temporary employment in the US. permanent jobs. We need to stop providing services (rewards) to people who illegal enter the country.
4. We need to get basic economic principles back into health care. Medicare, Medicaid, the VA systems, and private insurance have policies that encourage people with minor illnesses to go to the Doctor. Doctors should try diet and exercise before Zocor, Lipitor, Vasotec, and other drug therapies.
5. We need to STOP earmarks & handouts (to individuals and businesses) and adopt a simple Fair Tax so that every American can contribute fairly.
6. Republicans should have supported reforms to Social Security.
A simple message should resonate with the People…the means to our National Security have to center on the basic diplomatic, economic, financial, legal, science & technology, and informational power we possess. The administration and the Party should be using the media to communicate a SIMPLE strategy.
Thanks for the Forum (blog)
May 23rd, 2008 at 11:32 am
I agree whole-heartedly that it’s time Congress starts doing something about it. So now I ask, where is legislation in the House or Senate that stands up to the environmentalists and pushes for drilling in ANWR and other domestic locations, in an effort to increas our reserve supply of domestic oil? Where is the legislation that allows for the building of American oil refineries of which no new one’s have been built in almost thirty years? Where is the leadership in the Republican party that will stand up for conservative ethical and fiscal priciples? Our de facto leader (John McCain) has demonstrated that he would rather court the liberal media and reach “across the aisle” which only moves his position farther and farther to the left.
I am disappointed that no one in the Republican party cares enough to stand up while the Senate is busy brow-beating the “evil” oil companies over the ten-cents-to-the-dollar profit they are making. No Republican is willing to stand up and denounce the ludicrous notions of Mrs. Bill Clinton and Mr. Barack Hussein Obama as their answer is to “take”, in the most Stalinist way possible, the profits of the “evil” oil companies, effectively socializing the oil industry in our free-market economy much the way Hugo Chavez is doing in his dictatorship over Venezuela.
The Republican party is starving for leadership, Congressman. For those of you that have the courage to stand up for our conservative values and principles, know that you may be villified by George Soros and his media, but the American people who still love America and what America was built on will stand with you until the bitter end.
May 27th, 2008 at 1:28 am
There is no doubt that supply and demand play a role in what is happening with gas prices.
I’ve made an effort to change the pattern of my driving to burn less fuel. Thus I no longer drive as fast as I used to, but try to keep to the speed limit at all times.
Unfortunately however, I still see people every day driving their V8 trucks, going well over the speed limit, which is 65mph here. It is a real shame that they just don’t get it. Or maybe they do, but just don’t care. They are wasting so much gasoline, and its at our expense that they are doing this!
June 28th, 2008 at 1:18 pm
I can only imagine how much the prices will sky rocket if obama gets in office and starts taxing the oil companies even heavier, haven’t we been down this road before?