The Rest of the Story

Polls show that most Americans do not blame President Bush for the recent increases in gasoline prices.  Media reports have informed us that the increased demand for oil in China, OPEC  quotas, and limited refining capacity are to blame.  Other reports assure us that there still is plenty of oil, although of course that only refers to the number of decades that will elapse before oil prices get really high.  (See Cheap-Oil Era Is Far From Over, Analyst Say, from National Geographic News)

Scanning the Blogosphere and US news outlets, there is a lot of commentary about gas prices; but scanning the international news outlets, there are only a few concerns mentioned.  There is a G7 conference  coming up; oil prices will be a topic there.  US diplomats are meeting with OPEC ministers.  Asian stock markets are declining a bit, because of the price of oil.  Why is there a discrepancy between the great expressions of concern in the US, but such muted concern elsewhere?

In this post, I outline the issues that pertain to gasoline prices, then show why we should join the rest of the world in not making a big political issue out of it. 

Obviously, the election in November 2004 is one reason.  The US may be the only country in which such an important election could have its outcome determined by the price of oil. 

Bush proponents point out that the price of gasoline, adjusted for inflation, is not  at a record high.  Bush detractors point out that high gasoline prices are are disproportionate hardship for poor people, and that such prices could put a drag on the economic recovery.  Republicans point out that Democrats have impeded efforts to expand oil production in the USA.  Some have commented, snidely and without thinking it through hall the way, that liberal environmentalists have advocated for higher taxes on gasoline, but now liberals are complaining that the price of gasoline is too high.  Liberals counter by pointing out that oil company profits increase  greatly when oil prices are high, adding that the current Administration has close ties to the oil business. 

The American Petroleum Institute (FYI on Gasoline Prices 5/19/2004) tells us that gasoline prices are high because global prices for crude oil are high.  They tell us, helpfully I guess, that oil is the principle cost component of gasoline.  They go on to inform us that "[t]oday a barrel of crude oil is selling for more than $40. This is $15 a barrel higher (or 36 cents per gallon higher) than it was at this time last year. The retail price of gasoline also 52 cents more per gallon today than last year, averaging $2.06 per gallon."

<rant-tangent> Perhaps it did not occur to them that some people might notice that they are selling the end product for 52 cents more per gallon, while the cost of the raw material is only 36 cents per gallon higher.  I realize that this does not necessarily translate into a higher profit margin, but it probably does.  </rant-tangent>

As I mentioned, polls show that most Americans do not blame Bush for the higher prices.  They probably are right.  Everyone knows this, yet everyone in the US seems to be making it an election issue.  Of course, the election may be so close that a butterfly flapping its wings in Brazil  could decide the outcome of the election. And all of us pundits are out there flapping our arms, anytime the political wind starts to blow one way or the other.   I say, let's focus on the real issues:  the hazards of a one-party government; jobs; sustaining the economic recovery; Iraq; and the integrity of the candidates.   The price of gasoline is just one part of the issue of the sustainability of economic recovery.   It deserves some attention, but not the sheer volume that we have seen lately.