If it is true that most Americans vote with their wallets, President Obama is in trouble. In fact, he faces a real dilemma: continue to patronize his liberal base with policies that drive up the price of gasoline and make America more dependent on foreign oil or show some leadership and get America moving toward energy independence. If he does the former, it will violate one of the left’s most fundamental principles—more government regulation. This, in turn, will anger his liberal base. But if he fails do the latter, he risks losing the presidency in November. So what is a president to do—poor guy?
In spite of rising gasoline prices, Barack Obama must be confident of a win in November because he appears to have chosen the first option: continue to promulgate policies that make gasoline more expensive while doing nothing to make the country less energy dependent. Ever the political animal, the president is at least hedging his bets by circulating a poor-me excuse for the untenable situation at the gas pump. Rather than show some leadership in confronting the energy crisis, he has enlisted the help of his ever-loyal friends in the media to spread the word that there is little or nothing a president can do to hold down gasoline prices. In other words, President Obama’s message to America concerning the issue that troubles them most is: “Don’t blame me—it’s not my fault.”
Unfortunately for him—but perhaps fortunately for our country—cash-strapped Americans are not buying the president’s poor-me routine. And the higher that gasoline prices go, the less open voters will be to excuses from the president. Americans do not elect a president to be told “I cannot do anything” when problems arise. Americans expect their presidents to apply that old leadership principle that says, “When you are in charge, take charge.”
The president’s dilemma is complicated by several factors that he chooses to ignore. First, there is the “BRIC” problem. Citizens of Brazil, Russia, India, and China are driving in ever-increasing numbers creating a rapidly growing demand for gasoline. Consequently, it is important that America and other oil producing nations do what is necessary to increase the worldwide supply while industrialized nations simultaneously undertake sensible strategies for reducing energy demand. Failure to do this will cause the price of gasoline to continue spiraling upwards. With this fact in mind, one wonders about the president’s convenient election-year flip flop on the Keystone Pipeline project. Does anyone really believe he has finally seen the light, or is he just taking the politically expedient route while giving a knowing wink to his leftwing base?
If the president is counting on an improving economy to keep him out of the weeds on the gasoline issue, he is betting on the wrong horse. The economic gains being experienced are tepid at best, and the declining unemployment figures are deceptive at best. Factor in underemployment, and the unemployment figures are not the 8 percent President Obama is so proud of, but closer to 18 percent. These tens of thousands of underemployed people are struggling to just get by from day to day. They can hardly afford $5 a gallon gasoline. An individual who was making $150,000 a year before losing his job in the recession and is now working at minimum wage is not likely to accept President Obama’s excuse that there is nothing he can do. Like many Americans, the underemployed are likely to use the voting booth in November to tell President Obama, “If you can’t do anything to help us, we will elect someone who can.”
The final factor complicating the president’s dilemma is a rule of thumb economists apply to determine the effect rising gas prices will have on the economy. Every sustained 25 cent increase in gasoline prices costs America’s economy $35 billion dollars or a 0.2 percent decline in the nation’s gross domestic product (GDP). The price of gasoline has increased by approximately a dollar in just one year and is still going up. Each multiple of 25 cents is slowing economic growth by another 0.2 percent. With the economy growing at a paltry rate between 2 and 3 percent, rising gas prices will soon reduce the recovery from a slow walk to a crawl or worse. Depending on how high gasoline prices go, the economy could return to the doldrums of the recent recession and this could happen by November. President Obama is ignoring the facts and counting on the recovery to continue, at least until the day after the election.