Why Rising Gas Prices Could Backfire On The GOP In November
Eight months before the fall elections, Republican strategists are in a dour mood.
-The economy has begun to gain traction.
-Their leading candidate for president, Mitt Romney, is universally viewed as an uninspiring poster child for the one percent, with no core values anyone can point to except his own desire to be elected.
-Every time Romney tries to “identify” with ordinary people he says something entirely inappropriate about his wife’s “two Cadillacs,” how much he likes to fire people who provide him services, or how he is a buddy with the people who own NASCAR teams rather than the people who watch them.
-The polls show that the more people learn about Romney, the less they like him. The Republican primary road show doesn’t appear to be coming to a close any time soon.
-Together, Bob Kerrey’s announcement that he will get into the Senate contest in Nebraska and the news that Olympia Snowe is retiring from the Senate in Maine, massively increase Democratic odds of holding onto the control of the Senate.
-The Congress is viewed positively by fewer voters than at any time in modern history — and two-thirds think the Republicans are completely in charge.
-Worse yet, the polling in most presidential battleground states currently gives President Obama leads over Mitt Romney and Rick Santorum.
The one thing Republican political pros are cheering right now is the rapidly increasing price of gas at the pump and the underlying cost of oil.
The conventional wisdom holds that if gas prices increase, it will inevitably chip away at support for President Obama — and there is a good case to be made. After all, increased gas prices could siphon billions out of the pockets of consumers that they would otherwise spend on the goods and services that could help continue the economic recovery — which is critical to the president’s re-election.
But Republicans shouldn’t be so quick to lick their chops at the prospect of rising gas prices.
Here’s why:
1). What you see, everybody sees.
The sight of Republicans rooting against America and hoping that rising gas prices will derail the economic recovery is not pretty.
The fact is that Republicans have done everything in their power to block President Obama’s job-creating proposals in Congress, and they were dragged kicking and screaming to support the extension of the president’s payroll tax holiday that was critical to continuing economic momentum.
Senate Majority Leader Mitch McConnell actually announced that his caucus’ number one priority this term was the defeat of President Obama. The sight of Republicans salivating at the prospect of $4-plus per gallon gasoline will not sit well with ordinary voters.
2). Democrats have shown that they are more than willing to make the case about who is actually responsible for rising gas prices — and the culprits’ footprints lead right back to the GOP’s front door.
Who is really to blame for higher gas prices?
-The big oil companies that are doing everything they can to keep oil scarce and the price high;
-Speculators that drive up the price in the short run;
-Foreign conflicts, dictators and cartels — that have been important in driving up prices particularly in the last two months;
-The Republicans who prevent the development of the clean, domestic sources of energy that are necessary to allow America to free itself from the stranglehold of foreign oil — all in order to benefit speculators and oil companies.
The fact is that the world will inevitably experience increasing oil prices over the long run because this finite, non-renewable resource is getting scarcer and scarcer at the same time that demand for energy from the emerging economies like China and India is sky rocketing.
Every voter with a modicum of experience in real-world economics gets that central economic fact.
That would make Republican opposition to the development of renewable energy sources bad enough. But over the last few months the factor chiefly responsible for short-term oil price hikes have been the Arab Spring and Israel’s growing tensions with Iran — all of which are well beyond direct American control.
But with only 2% of the world’s oil reserves, any idiot knows we can’t make ourselves materially more energy independent solely by drilling for more domestic oil. In fact, it is obvious that to have any hope of controlling the prices we pay for energy in the future, we must free ourselves from the dependence on oil in general and foreign oil in particular.
We need an emergency “all of the above” energy independence program that accesses all of the domestic sources of oil that can be developed in an environmentally safe way – plus a major investment in renewable, clean energy sources that free us from dependence on oil – and especially foreign oil.
President Obama has proposed a big first step in exactly that direction, and the Republicans have answered: “Hell no — drill baby drill.”
If they are forcefully challenged by Democrats this year — as I believe they will — that Republican position is simply laughable.
Domestic drilling has increased substantially under President Obama’s administration. And our dependence on foreign oil imports has gone down every year of his presidency. The president has put in place new mileage standards for cars that will save massive amounts of potential oil imports — standards that Republicans have opposed for decades.
But that fact remains, that for all his administration can do on its own to increase energy independence, it is impossible to free America from the stranglehold of foreign oil dependency without the kind of massive national commitment to domestic, renewable energy that must be passed by Congress. The Republicans have said “no” because their biggest energy patrons — the oil companies — oppose a crash program to create renewable energy sources for one simple reason. Every day that we fail to act, the value of their oil goes up — it’s that simple.
If you doubt that Mitt Romney and the Republicans are bought and paid for by Big Oil — just ask the infamous Koch brothers — who finance major Republican “super Pacs” — how much they stand to make personally every time the long-term price of a barrel of oil increases by another dollar.
Simply put, the Republicans have put the profits of their patrons in Big Oil well above the economic and national security interests of the United States of America.
The Republicans even continue to do everything in their power to block the elimination of the astonishing taxpayer subsidy of the oil industry, that continues notwithstanding the fact that big oil companies are more profitable today than any other companies in the history of humanity. And the Republicans do it all the while they blather on about how if we once again install them in the White House, they will bring us $2 a gallon gasoline.
Whoever is pushing those kinds of lines must be studying the techniques of the late, famous circus impresario, P.T. Barnum, who famously said, “There’s a sucker born every minute.”
But in fact, polling shows that American voters simply are not so gullible that they buy either of these preposterous positions.
3). Speculators.
A final contributing factor that has recently amplified increases in gas and oil prices is the role of speculators.
In a purely competitive market, oil prices should settle in the long run at the marginal cost of producing the next barrel of oil — currently between $60 and $70 a barrel. Oil closed last week at about $106 per barrel and ran up to twice the marginal cost of production during the Bush era 2008 oil spike.
Currently about 80% of positions on oil commodity markets are held by “pure speculators” — who bet on changes in oil prices — rather than “end users” who actually consume oil and use the markets to hedge against price increases.
Academic studies have demonstrated that there is a big speculative premium in oil prices, above and beyond any “risk premium” that might normally develop from fear of some immediate, short-term shortage. That speculative premium could be materially dampened if steps were taken to limit the market’s domination by pure speculators.
The Dodd-Frank Wall Street reform bill — which was opposed by most Republicans in Congress and all of their presidential candidates — allows the Commodities Futures Trading Commission to limit the percentage of market positions held by pure speculators as opposed to end users.
Already the CTFC has position limits on the percentage of positions that can be held by individual companies or investors to prevent one from cornering the market. Many economists have proposed imposing similar position limits on pure speculators as a class.
Ordinary voters don’t like speculators. But far from supporting limits on speculation, Mitt Romney wants to go back to the “good old days of yesteryear” where wild, unbridled speculation led to the worst economic collapse in 60 years and costs eight million Americans their jobs.
None of this is good politics for Republicans.
Voters don’t want to be held hostage by the big oil companies or foreign oil. They don’t want to have their pockets picked by oil market speculators. They understand that when world oil prices go up, it benefits oil-state dictators: it’s like allowing Iran’s Ahmadinejad to levy a tax on American consumers. And voters sure as hell don’t want to pay a taxpayer subsidy to oil companies like Exxon that made more in profits in one minute last year (about $85,000) than the average American worker earns all year long.
If Republican strategists think they can reverse their fortunes by focusing on the gas price debate, the odds are good they will be wrong.
By: Robert Creamer, The Huffington Post, March 6, 2012
“Fundamental Dishonesty”: When Do Reporters Start Calling Mitt Romney A Liar?
Two days ago, Barack Obama went before AIPAC (which is commonly known as “the Israel Lobby” but would be better understood as the Likud lobby, since it advocates not Israel’s interests per se but the perspective of the right wing of Israeli politics, but that’s a topic for another day), and said, among other things, the following:
“I have said that when it comes to preventing Iran from obtaining a nuclear weapon, I will take no options off the table, and I mean what I say. That includes all elements of American power: A political effort aimed at isolating Iran; a diplomatic effort to sustain our coalition and ensure that the Iranian program is monitored; an economic effort that imposes crippling sanctions; and, yes, a military effort to be prepared for any contingency. Iran’s leaders should understand that I do not have a policy of containment; I have a policy to prevent Iran from obtaining a nuclear weapon. And as I have made clear time and again during the course of my presidency, I will not hesitate to use force when it is necessary to defend the United States and its interests.”
This didn’t surprise anyone, because it’s the same thing Obama has been saying for a while, in scripted and unscripted remarks alike, in both speeches and interviews. Yet later that day, Mitt Romney went out and said the following:
“This is a president who has failed to put in place crippling sanctions against Iran. He’s also failed to communicate that military options are on the table and in fact in our hand, and that it’s unacceptable to America for Iran to have a nuclear weapon.”
So here’s my question: Just what will it take for reporters to start writing about the question of whether Mitt Romney is, deep within his heart, a liar?
Because he does this kind of thing frequently, very frequently. Sometimes the lies he tells are about himself (often when he’s trying to explain away things he has said or done in the past if today they displease his party’s base, as he’s now doing with his prior support for an individual mandate for health insurance), but most often it’s Barack Obama he lies about. And I use the word “lie” very purposefully. There are lots of things Romney says about Obama that are distortions, just plain ridiculous, or unfalsifiable but obviously false, as when he often climbs into Obama’s head to tell you what Obama really desires, like turning America into a militarily weak, economically crippled shadow of Europe (not the actual Europe, but Europe as conservatives imagine it to be, which is something like Poland circa 1978). But there are other occasions, like this one, where Romney simply lies, plainly and obviously. In this case, there are only two possibilities for Romney’s statement: Either he knew what Obama has said on this topic and decided he’d just lie about it, or he didn’t know what Obama has said, but decided he’d just make up something about what Obama said regardless of whether it was true. In either case, he was lying.
The “Who is he, really?” question is one that consumes campaign coverage, but in Romney’s case the question has been about phoniness, not dishonesty, and the two are very different things. What that means is that when Romney makes a statement like this one, reporters don’t run to their laptops to write stories that begin, “Raising new questions about his candor, today Mitt Romney falsely accused President Obama…” The result is that he gets a pass: there’s no punishment for lying, because reporters hear the lie and decide that there are other, more important things to write about.
To get a sense of what it’s like when reporters are on the lookout for lies, remember what Al Gore went through in 2000. To take just one story, when Gore jokingly told a union audience that as a baby his parents would rock him to sleep to the strains of “Look for the Union Label,” everyone in attendance laughed, but reporters shouted “To the Internet!” and discovered that the song wasn’t written until Gore was an adult. They then wrote entire stories about the remark, with those “Raising new questions…” ledes, barely entertaining the possibility that Gore was joking. Why not? Because it was Al Gore, and they all knew he was a liar, so obviously if he said something that wasn’t literally true it could only have been an intentional falsehood.
That is not yet the presumption when it comes to Mitt Romney. There’s another factor at play as well, which is that reporters, for reasons I’ve never completely understood, consider it a greater sin to lie about yourself, particularly about your personal life, than to lie about your opponent or about policy (I wrote about the different kinds of lies and how the press treats them differently here). Because Romney is lying about his opponent and about a policy matter, reporters just aren’t as interested. But at some point, these things begin to pile up, and they really ought to start asking whether this dishonesty is something fundamental in Romney’s character that might be worth exploring.
By: Paul Waldman, The American Prospect, March 6, 2012
Speculators, Hedge Fund Managers And “Gas Wars”
Nothing drives voter sentiment like the price of gas – now averaging $3.56 a gallon, up 30 cents from the start of the year. It’s already hit $4 in some places. The last time gas topped $4 was 2008.
And nothing energizes Republicans like rising energy prices. Last week House Speaker John Boehner told Republicans to take advantage of voters’ looming anger over prices at the pump. On Thursday House Republicans passed a bill to expand offshore drilling and force the White House to issue a permit for the Keystone XL pipeline. The tumult prompted the Interior Department to announce on Friday expanded oil exploration in the Arctic.
If prices at the pump continue to rise, expect more gas wars.
In fact, oil prices are rising for three reasons — none of which has to do with offshore drilling or the XL pipeline.
The first, on the supply side, is Iran’s decision to cut in oil exports to Britain and France in retaliation for sanctions put in place by the EU and United States. Iran’s threat to do this has been pushing up crude oil prices for weeks.
The second, on the demand side, is rising hopes for a global economic recovery – which would mean increased oil consumption. The American economy is showing faint signs of a recovery. Europe’s debt crisis appears to be easing. Greece’s pending bailout deal is calming financial nerves on both sides of the Atlantic, and the Bank of England and European Central Bank are keeping rates low. At the same time, China has decided to boost its money supply to spur growth there.
Neither of these would have much effect were it not for the third reason — overwhelming bets of hedge funds and other money managers that oil prices will rise on the basis of the first two reasons.
Speculators have pushed crude oil to $105.28 per barrel, up 35 percent since September. Brent crude, Europe’s benchmark, is now $120.37 a barrel – also worrisome because many East Coast refineries use imported oil.
Funny, I don’t hear Republicans rail against speculators. Could that have anything to do with the fact that hedge funds and money managers are bankrolling the GOP as never before?
But that’s okay. The gas wars may come to a screeching halt before too long, anyway. So many bets are being placed on rising oil prices that the slightest hint the speculators are wrong – almost any sign of expanding supply or declining demand – will set off a sharp drop in oil prices similar to the record one-day fall on May 5 of last year.
By: Robert Reich, Robert Reich Blog, February 20, 2012
Iran War Would Cost Trillions: Will the GOP Pay More Taxes For That?
While GOP presidential candidate Ron Paul is doing all he can in this election cycle to gin up a debate about US foreign policy and a measure of the costs and benefits, the debate about Iran, China, Afghanistan, Iraq, Israel’s security has been taking place in a gravityless environment.
Mitt Romney’s opening foreign policy opus at the Citadel criticized Obama for defense cuts with promises to boost America’s defense commitments abroad, to boost military spending on hardware and ships in the Pacific — to do everything we have been doing but more.
Where are the dollars going to come from?
I am one who thinks that war with Iran is far off and in the near term unlikely — unless Israel makes a tremendous mistake by triggering and forcing a geostrategic move by the United States, a choice that could very well ultimately dismantle the close US-Israel relationship, or alternatively if forces inside Iran that would benefit from war actually cause an escalation of events that produce a potential nightmare in the Persian Gulf and region.
That said, fewer and fewer people agree with me — and various of the presidential candidates seem to be competing with each other to tell US citizens how quickly they would deploy US military and intelligence assets to undermine Iran’s Supreme Leader and his government.
That’s OK — in the Summer of 2007, both analysts and agitators in the political left believed Bush and Cheney would bomb Iran before year’s end. Neoconservatives and pugnacious nationalists like John Bolton also believed this. I did a survey of folks on the inside and argued in September 2007 in a widely read Salon article that they would not bomb Iran. They didn’t.
In the summer of 2010, some folks on the left were absolutely convinced that the US would bomb Iran before August. Again, that was not how things turned out — and was not the analysis I had from talking to people in the defense and intel establishments.
Today, things are fuzzier — but at the highest levels of the national security decision-making tree — there is palpable doubt that bombing Iran achieves any fundamental strategic objectives while at the same time ultimately undermining US, Israel, and regional security, undermining the global economy. One senior official I heard when asked about bombing Iran then said, “OK, and then what? Then what?! Seriously, then what???”
I’ll write more soon about what a much more level-headed and serious strategy with Iran would look like — particularly since so many are hyperventilating today and in some cases pounding the drums for a collision, one that they think can be done on the cheap.
It is ridiculous to think that a strike by Israel against Iran, that would in real terms tie the US to the conflict, would not be staggeringly expensive and consequential.
So, it would be interesting to hear from those who want to reside in the White House — and even the Obama administration which has some ‘kinetic action’ advocates on the inside — on what a more sensible financial management strategy for these proliferating conflicts, including an Iran War, would be.
George H.W. Bush got the Japanese citizens to write a check for $13.5 billion to the US to pay for the first Gulf War. He was perhaps the last fiscally responsible war time US President.
Wars cost lots and lots of money — and if a substantial chunk of the GOP crowd wants these wars and feels that it is in our national interest to have them, then by all means they should start lining up some of the wealthiest in the country who are helping to agitate for these conflicts to pay more in taxes for them.
By: Steve Clemons, The Atlantic, February 12, 2012
The “Appeasement” Parrots Of The GOP
With the country still struggling to pull itself out of an economic recession, foreign policy has not rated the highest among issues discussed by the Republican presidential candidates. But among those foreign policy issues that have been debated, one has dominated the agenda: Iran. And other than Ron Paul, the candidates have arrived at the same verdict on President Obama’s Iran policy: It is appeasement.
Speaking at a forum last month, the candidates lined up to launch the charge at Obama. “For every thug and hooligan, for every radical Islamist, he [Obama] has had nothing but appeasement,” said former Sen. Rick Santorum. “Internationally, President Obama has adopted an appeasement strategy,” said former Gov. Mitt Romney. In September, standing alongside hard-line supporters of Israel’s settlements, Texas Gov. Rick Perry similarly condemned the administration’s “Middle East policy of appeasement” — at almost precisely the same moment that Obama was delivering a speech defending Israel at the United Nations and demanding that Iran meet its nuclear treaty. In late December, Newt Gingrich said on an Iowa radio program, “You have an Obama administration who’s dedicated to appeasing our enemies and dedicated to giving away our secrets.”
It’s not a particularly surprising line of attack. “Appeasement,” with its obvious reference to British Prime Minister Neville Chamberlain’s capitulation to Adolf Hitler at Munich in 1938, is probably the single most overworked accusation in the conservative foreign policy lexicon, a free-floating, no-evidence-required assertion of weakness and surrender. The charge has become so unmoored from any actual historical context that many who use it are not even aware of its provenance. During the 2008 presidential campaign, “Hardball’s” Chris Matthews famously humiliated right-wing shout radio jock Kevin James by repeatedly asking what had actually happened at Munich, to which a red-faced James could only repeatedly scream, “Appeasement!”
One can disagree with the Obama administration’s two-track approach of engagement with and pressure on Iran. But to describe that approach as “appeasement” is to declare oneself desperately in need of a dictionary. The Obama administration has overseen the adoption of some of the most stringent multilateral sanctions ever on Iran. It has undertaken unprecedented defense cooperation with regional allies, including the placing of a NATO missile defense radar system in Turkey, to Iran’s continued outrage. And the administration successfully facilitated the appointment of a special U.N. human rights monitor for Iran to track the regime’s continued abuses.
Iranian President Mahmoud Ahmadinejad’s recent jaunt through Latin America, intended to combat the perception that Iran is increasingly isolated, was a bust, long on photo ops and statements of solidarity from the likes of Hugo Chavez, but short on actual measures that might help Iran out. The Wall Street Journal reported Tuesday that Iranians’ efforts to protect their savings from rampant, sanctions-induced inflation by offloading rials for more stable currencies had gotten so bad that Iranian authorities cracked down on the practice.
There is a legitimate argument to be had over whether the punishing measures taken by the international community will actually push the Iranian government toward a compromise on its nuclear program, which it insists is for peaceful purposes, but about which the International Atomic Energy Agency continues to have troubling unanswered questions. At the very least, though, one would think that enacting such measures would inoculate the administration from the charge of being weak on Iran. But no, some of Obama’s conservative critics have gone so far as to redefine appeasement as simply the act of talking to one’s adversaries, as columnist Charles Krauthammer did when he insisted that the administration’s efforts at negotiations with Iran “did nothing but confer legitimacy on the regime.”
In reality, talks with Iran have served as a force multiplier for other efforts to put pressure on Iran over its nuclear program. As one Israeli defense official told me for an article last year, the Israelis themselves were very skeptical that talks with Iran would have any benefit, but now recognize that the effort “contributed to building international consensus” around the problem. Negotiations have actually done the opposite of conferring legitimacy on the regime — they made clear to the world, and to the Iranian people, that the Iranian government, not the U.S., was the central obstacle to a resolution, thereby facilitating further sanctions. On Monday, Nicholas Burns, the under-secretary of state for political affairs during the George W. Bush administration, told MSNBC’s Andrea Mitchell that “Iran is probably more isolated today than the day that President Obama took office.”
Conservative mendacity aside, it’s worth looking at what former British Prime Minister Winston Churchill, the patron saint of the anti-appeasement crowd, had to say about it. “The word ‘appeasement’ is not popular, but appeasement has its place in all policy,” Churchill told an audience in 1950. “Make sure you put it in the right place. Appease the weak, defy the strong.” Returning to the theme later that year, he noted that “Appeasement in itself may be good or bad according to the circumstances.”
It should come as no surprise that the views of Churchill the man are quite a bit more nuanced than those of Churchill the Neocon Dashboard Saint, but what might this mean with regard to Iran? It means remembering that, despite the significant self-inflicted setbacks created by our invasion of Iraq, the U.S. is still dealing from a position of considerable strength against a weaker power in Iran. The U.S. has by far the largest military in the world, with an annual defense budget of over $700 billion, while Iran spends around $9 billion per year.
This certainly doesn’t mean that the U.S. should acquiesce to an Iranian nuclear weapon, but it does suggest that the U.S. and its partners should at least consider making explicit what was implicit in the proposed 2009 deal on fuel for the Tehran Research Reactor: a recognition of Iran’s right to domestic enrichment in exchange for the complete satisfaction of the IAEA’s concerns, and a commitment to ongoing verification. At the very least, talks should continue to be pursued in the hope of establishing some line of regular communication between the U.S. and Iran as a way to calm tensions, which are running high over Iran’s provocative threats to close the Strait of Hormuz, and the assassination of another Iranian nuclear scientist.
Finally, as we face a new round of calls for preventive war against Iran, from many of the same people who advocated preventive war against Iraq, it’s very much worth remembering that the Iraq war provided a greater strategic benefit to Iran than any “appeasement” conceivably could. Some of those gains have been lost in recent years, partly as a result of the Arab Spring, partly as a result of the Obama administration’s hard diplomatic work, and partly because of Iran’s own incompetence and belligerence. Clearly, Iran continues to represent a challenge to the U.S. and its interests on a number of fronts, but it’s important to keep that challenge in perspective, and not allow ourselves to be marched into another ruinous military adventure with unforeseeable consequences through the ridiculous idea that anything short of war is “appeasement.”
By: Matt Duss, Policy Analyst , Center for American Progress, Published in Salon, January 20, 2012
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