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CURL: White House out of gas on remedies for pump price
Question of the Day
President Obama hasn’t a clue what to do about high gas prices. Not a clue.
For proof, just look at what happened in one single day last week. The White House opened by angrily haranguing oil companies for making a profit; then the brain trust in the Oval Office blamed “speculators” for pushing up the price of oil; then the president demanded that Congress do away with $4 billion in oil industry tax breaks; and finally, at day’s end, Mr. Obama begged world producers to increase crude output.
All four are wrong-headed: Oil companies do make lots in profits, but they also pay upward of 50 percent in taxes (and employ a lot of people); speculation isn’t to blame for high prices, the lack of U.S. oil exploration and production is; ending tax subsidies for oil companies will just make the price higher, not lower; and OPEC said last month there is no shortage of oil in the market, it’s just expensive — especially if you’re paying with weak dollars (another action point on which Mr. Obama is clueless).
At midday, the ill-prepared White House spokesman, Jay Carney, had no idea how to handle a simple question: If, say, you end all those subsidies to oil companies, won’t they just pass the cost on to consumers?
“Look,” he said, “what I know is that gas prices are very, very high, no question. So the idea that with these subsidies oil companies are artificially depressing gas prices, tell that — go out to a gas station in Virginia or Maryland and tell that to somebody who’s paying the price.”
The reporter broke in. “No concerns from you guys that the oil companies are going to pass this through? …”
“What I’m saying,” Mr. Carney started saying, “is that on balance, overwhelmingly the right thing to do is eliminate these subsidies and — because the American taxpayer should not be subsidizing companies that don’t need subsidies by any stretch of the imagination.”
“But,” the reporter pressed, “you don’t know that they won’t pass it on, do you? Is there any …”
“I think I’ve addressed this. I’ve addressed this. What I’ve said is on balance, knowing what we know and looking — and analyzing what we know, that this is overwhelmingly the right thing to do.”
The right thing to do. Oh, and yes, of course they will pass on the cost. They’re in business; that’s what businesses do.
While the White House is clueless about what to do, there’s one thing Mr. Obama knows for sure: His re-election will hinge on American’s displeasure over high gas prices.
So, what to do? First, consider this fact: In the six years between George W. Bush’s first day in office and the day Democrats took control of Congress in 2007, gas prices rose an average of 14 cents each year. And since Mr. Obama took office in January 2009, the average price of a gallon of gas has more than doubled — from $1.79 to $3.88.
Now, take note, Mr. President: On July 15, 2008, when gas was $3.28 a gallon, Mr. Bush took action, lifting the executive ban on offshore drilling and urging Congress to lift the federal moratorium. What happened? Crude oil futures plummeted nearly $10 the next day, the largest decline in 17 years.
But what did Congress do in response? Nothing. With oil at $130 a barrel and gas teetering around $4 a gallon, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid demagogued. Democrats then — as now — played the old saw: Opening drilling won’t lower prices in the short term.
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