Price superficiality

March 12, 2012
The price of gasoline will drown Republican lawmakers and presidential hopefuls in a backwater of superficiality if they keep waving it like a political sword at President Barack Obama.

The price of gasoline will drown Republican lawmakers and presidential hopefuls in a backwater of superficiality if they keep waving it like a political sword at President Barack Obama. Republicans would more profitably target the president's vastly more substantial vulnerabilities on energy and extrapolate from those to the broader principles that should be decisive in the next presidential election.

It's true that Obama's wayward energy program, grounded as it is on the expenditure of public money to replace fossil energy with uneconomic alternatives, benefits from elevation of the gasoline price. It's also true that Obama's administration has proposed and implemented regulations that will achieve that effect over time. But blaming Obama for painfully high gasoline prices of the moment is as silly as the president's claim of responsibility for recent increases in production of oil and gas. Presidents customarily take credit for happy events while they're in office and receive blame for unhappy ones. Still, most voters know coincidence when they see it.

Price influence

Gasoline prices are high in the US because crude prices have increased and refineries have closed on the East Coast and in the Virgin Islands. Crude prices are high because a market emerging from supply strains last year now faces worry about supply from Iran and possible war in the Persian Gulf. The tension comes while dollar weakness imposes an upward bias on crude prices.

Obama can and should be held to account for the extent to which his policies discourage refinery investment and limit domestic production of oil and gas. But he has little influence over contemporaneous gasoline prices. Republicans should know that. They're supposed to understand markets. They should know that expectations for oil consumption worldwide this year are receding and that gasoline demand in the US is below year-earlier levels. The physical market is softening. If worry over Iran abates and no other disturbance emerges, crude prices will drop and take gasoline prices in the US with them. Obama then will claim credit, and Republicans now blaming him for high gasoline prices will be hypocritical if they dispute him.

Instead of exploiting price phenomena that might be history by November, Republicans should be attacking Obama's state-centered approach to energy and governing in general.

For example, the consistent attempt to use regulation and tax law to replace oil, gas, and coal with costlier, less abundant energy sources isn't just bad energy policy. It's bad governance. It's bad energy policy because it channels barely controlled amounts of public money to uneconomic energy forms promising too little supply. It's bad governance because it yields to cronyism and claims an unseemly role for public officials in choices best left to individuals. Obama's energy record thus offers Republicans the chance to conquer the high ground on corruption and freedom.

Overregulation

A handmaiden to state activism is overregulation now straining the constitutional separation of powers. The Environmental Protection Agency is out of control. A sequence of missed deadlines on crucial regulations and a stack of court cases challenging EPA's claims to authority testify to the agency's unseemly zeal. True to Obama's taste for activism, EPA acts as though it's on a mission to transform the US, including the behavior of Americans. This is constitutionally backward. In the US, change begins with voters. On key issues with which EPA has charged forward, many related to climate change, voters have expressed a preference for caution and a distaste for energy prices elevated by government. None of that stops EPA. For Republicans, rogue regulation should be a bright target.

On gasoline prices, meanwhile, all Republicans should say is that they hope relief comes soon before the economy suffers further. Then they should focus on everything Obama has done to hobble recovery and stretch constitutional governance to fit his political agenda. Those issues are more important than gasoline prices to efforts to unseat an activist president and his administration—and far less subject to change.

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