Wednesday, February 22, 2012

Republican Gasbags

Rising gasoline prices are being viewed with glee by Republicans who see it as a vehicle to undermine the President's economic agenda, energy policies and political prospects.

Laura Clawson lays out the Republican perspective:   
First off, prices should be rock bottom at all times, because it is the God-given right of Americans to use the maximum possible quantity of fossil fuels, the retail cost of which should therefore not reflect their true costs. Second, the way to keep prices at rock bottom is through the aforementioned "drill, baby, drill" strategy. Third, President Obama is a wild-eyed environmentalist-socialist who is coming between Americans and their God-given right to more oil, and therefore everything is his fault.
Accordingly, Republicans plan to use the fear of rising gas and oil prices to support for their push for increased domestic production and to challenge Obama's blocking of construction of the Keystone XL pipeline.

 Clawson points out that Republicans are conveniently ignoring that we have been "drilling, baby, drilling," with domestic crude production on the rise since 2009.  Indeed, "the number of rigs in U.S. oil fields has more than quad­rupled in the past three years."

And, as Robert Reich helpfully explains, rising gas prices have nothing to do with offshore drilling or the Keystone XL.  There are three causes of the increase.  First, "on the supply side, is Iran’s decision to cut oil exports to Britain and France in retaliation for sanctions put in place by the EU and United States." Second, "on the demand side, is rising hopes for a global economic recovery – which would mean increased oil consumption."

But, as Reich explains, neither of these would matter much if it weren't for the third cause:  "overwhelming bets of hedge funds and other money managers that oil prices will rise on the basis of the first two reasons."  

How come Republicans aren't railing against speculators.  Reich suggests it might have something to do with the fact that "hedge funds and money managers are bankrolling the GOP as never before."  

Could be.


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