On Thursday April 14th, 2011 President Obama was interviewed by George Stephanopoulos and was specifically asked about rising Gas Prices. President Obama's answer was the following;
"But the-- the last thing I want to say on gas prices, ‘cause I know it’s on people’s minds. I- I gave a major speech about this about a week and a half. There-- there aren’t going to be a lot of great short-term solutions to this problem. And what happens every time gas prices spike like this, and the last time it happened was when I was running for President is politicians get up and "We’ve got to do something about gas prices." And then when they go back down, we do nothing"
Yes Mr. President, it is on people's minds and it most certainly shouldn't be the last thing that you say on the matter.
Mr. Stephanopoulos makes a point of saying during the interview that this was the largest number of questions that he got from viewers and it is an issue that needs to be addressed at length as far as this citizen is concerned.
The price of gasoline has risen from $68 to $113 per barrel in less than one year. That is nearly a 100% increase in the cost of fuel and should be one of the core issues of any discussion that we have as it pertains to the economy.
Now for President Obama to say that there isn't "...a lot of short-term solutions..." is ridiculous and I don't really believe the President thinks this to be true.
Just about every expert on the issue of oil prices freely admits that the price has been driven up by Wall Street speculation and not by any actual demand surge or supply decrease. Actually demand is currently down in the U.S. (thanks to prices) and as such supply is up. Basically this means that the oil market is ignoring the Laws of Supply and Demand and thatsomething foul is at work here.
Now there are laws on the books to control the kind speculation that would drive up price needlessly (Dodd-Frank Act) but no one in our Executive branch seems to be enforcing these laws where it concerns oil. There have been no major investigations publicized by the media or announcements made by someone from CFTC that they are looking into any of the sudden sharp rises in price.
The real cost of oil per barrel is somewhere between $30 and $50.00 per barrel. Today oil closed at around $107 per barrel a little up from its opening price. Ironically the markets were down significantly today on a variety of news ranging from U.S. debt to Chinese inflationary control measures. You would think this would chase down the price of oil a bit, after all the tightening up of credit and budgets stunts growth and results in less gas being used.
In the end money spent on inflated gas prices is money not spent on goods or services. This affects a large number of individuals in a variety of ways and most likely will slow our recovering economy. Even in instances where the additional cost isn't that great it has been shown that just the psychological effect of rising fuel on the American consumer causes them to tighten the reins.
It appears as if Oil Speculation has won and our President is fiddling while gas is burning a hole in our pockets.
Sources
http://www.oil-price.net/
http://blogs.abcnews.com/george/2011/04/exclusive-interview-with-president-barack-obama-transcript-part-one.html
http://levin.senate.gov/newsroom/release.cfm?id=332185
http://uk.mobile.reuters.com/article/stocksNews/idUKLNE72M02M20110323
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