How to Defuse Political Peril of Surging Gas Prices: Ron Klain

[dipsydoodle]

The White House’s economic achievement checklist looks better each day. Unemployment rate back in the low 8 percent range? Check. The Dow Jones Industrial Average back above 12,000? Check. Payroll-tax cut extended for the rest of this year, giving an extra boost to the economy? Check.

Yet a worrisome item casts a shadow over the good news. The political risk of rising gasoline prices is the emerging hot topic in Washington. The question is: Are gas prices and their impact on middle-class families like the weather, a phenomenon everyone complains about but no one can change? Or can President Barack Obama and his team defuse this danger before it grows harder to manage?

According to AAA, gas prices have climbed an average of 14 cents a gallon in the past month and about 30 cents a gallon since late November. In states such as Pennsylvania and Florida, prices are an additional 10 cents to 15 cents a gallon higher, and seem to go up each week.

The political pinch that this can cause is often underappreciated. For some people, a few extra dollars at the pump each week is little more than an annoyance. But for hard- pressed middle-class families, and working families living paycheck to paycheck, the soaring numbers at the corner gas station are far more meaningful than the indexes at the New York Stock Exchange. (SPX)

http://www.bloomberg.com/news/2012-02-21/defusing-political-peril-of-surging-gas-prices-commentary-by-ron-klain.html

[RC]

1. And higher gas prices cause higher food prices.

And higher prices for most anything that gets shipped. This puts a real damper on the economy because the cost of doing business goes up and the main street customers (you and me) cannot afford to buy as much because of the higher prices.

[Uncle Joe]

4. Precisely, ultimately higher gas prices will be felt across the board

and if the rise continues employment will take a hit as well.

[DCKit]

5. Economic terrorism. A threat to national security.

But they won't stop the speculators.

[zipplewrath]

2. A strengthening economy will have the effects

One of the concerns with all of the stimulus activity, from the original and TARP to QE I and II, as well as the payroll tax cut, was that inflation would kick in. The worries up until now have been overstated. When you realize all of the stimulus that's been applied, and there still was no inflation, that was an indication of just how bad the economic situation was. But what we are seeing now in the speculation on gasoline prices, is that the markets are anticipating better conditions coming. Consumer confidence is up, many consumers and industries are sitting on large amounts of cash, and demand for products is anticipated to increase. Basically, inflation could be "just around the corner", which strangely is a good thing since it means we are coming out of the worst of the recession. The article is correct that the administration would do well to "get out ahead" of these trends and if nothing else, start explaning that these trends are 1) a compliment to the strength of the economy and 2) and indication that we can start generating greater revenues to pay down the deficit.

[denverbill]

3. The author is fantasizing. The GOP will do NOTHING to help Obama in 2012.

They'd rather the entire economy collapse in ruins than do anything that might help Obama politically.

It's not like Obama can issue an executive order cutting taxes on individuals and raising them on oil companies by executive order.

Do you really think House Republicans would vote to cut taxes for the poor and increase them on corporations, especially oil companies?

[BuckWoody]

6. Ohio Gas Prices fell to the floor the weeks prior to the last Presedential Election

I suppose that makes sense.
Its important as the great, "Handi Capper General" to try and punish big oil so they are equally handicapped as the middle class.

http://www.dailymotion.com/video/x20n68p_2081-everyone-will-finally-be-equal-short-film-adaptation-2009-of-kurt-vonnegut-jr-s-harrison-berge_shortfilms

I did notice the week before the last presidential election, driving through Ohio that gas prices there, "One of the Key Votes Needed" for both candidates that the gas price was around $1.89 a gallon. I filled up my 20 gallon hybrid for under $40. I asked why and they said it was because of the election.

[uppityperson]

7. This chart shows gas hasn't been below $3/gal in Ohio since early 2011, >$3.20 Oct 2012

http://charts.gasbuddy.com/ch.gaschart?Country=Canada&Crude=f&Period=36&Areas=Ohio,,&Unit=US%20$/G

It was lowest in the last 2 ys Jan 2013

Edited to add this article.
http://www.cleveland.com/business/index.ssf/2012/10/ohio_gasoline_prices_continue.html
Oct 22, 2012

Ohio gasoline prices are continuing to fall this week and average prices close to $3 per gallon are possible before Thanksgiving.

Ohio's average gasoline price Monday was $3.38 per gallon, second lowest in the nation, according to calculations provided to the AAA by the Oil Price Information Service. Only Missouri posted a lower average price, $3.34 per gallon.

In Northeast Ohio, average prices calculated by OPIS ranged from $3.27 per gallon in Canton to $3.39 in Akron to $3.43 in Cleveland. The national average price Monday was $3.66 per gallon.