The Real Kingmakers of Election 2012
In the next 10 months we'll be hearing about all kinds of groups and individuals who will be credited for determining which team wins or loses November's election. And there will be some plausible suspects thrown out there about who the real heavy is. Among them will be Angela Merkel and the European Union, Wall Street crony capitalists, Middle Eastern saber rattlers, and SuperPACs bankrolling individual candidates' campaigns with eight-figure cash infusions to render the opposition paralyzed. Any one of these could prove to be the puppetmaster responsible for determining who controls the White House and the Congress in 2013. But my money is on a different player altogether, a group that has been responsible for nearly a decade's worth of misery for Joe Sixpack already and is only getting started.....and that group is oil speculators.
For all the talk of how the economy is gonna determine the election, that's only half true. No matter what's going on with the economy, if Americans are paying an average price of $5 for a gallon of gas, or anywhere over $4.50 for that matter, the incumbent party will take it in the shorts this November because there is no more tangible metric of misery index for the average voter than spending another $40 a week on gas. And now that Obama has passed on the Keystone XL pipeline, he has given Republicans a perfect excuse to blame him for even a penny's worth of gas price increase between now and November, no matter how demagogic that connect-the-dots may be in the real world.
Making matters worse, oil prices have never been this high in January before, meaning that if one domino falls to drive down oil supply (or lead speculators to believe oil supply could hypothetically decline), the typical annual increase in oil prices as summer driving season approaches will be all the more painful. The deeply unsettled situation in the Middle East, including but not limited to Iran, makes it unlikely we'll be able to keep a lid on oil market uncertainty. It's possible the oil markets can be contained to a politically manageable level for Obama, but my money is on gas prices soaring above $4.50 nationally by summer.
About the only thing that could save surging oil prices is another bad scenario....a collapse of Europe's economy and a recession in China driving down demand. The double-edged sword of that is obviously a new set of serious problems emerge for America if the global economy loses its footing.
As cartoonishly bad at politics as both leading contenders for the Republican nomination may be, there are still plenty of icebergs for Obama's reelection campaign to steer around, and few things could hamstring his efforts for a second term more than $5 a gallon gas.
For all the talk of how the economy is gonna determine the election, that's only half true. No matter what's going on with the economy, if Americans are paying an average price of $5 for a gallon of gas, or anywhere over $4.50 for that matter, the incumbent party will take it in the shorts this November because there is no more tangible metric of misery index for the average voter than spending another $40 a week on gas. And now that Obama has passed on the Keystone XL pipeline, he has given Republicans a perfect excuse to blame him for even a penny's worth of gas price increase between now and November, no matter how demagogic that connect-the-dots may be in the real world.
Making matters worse, oil prices have never been this high in January before, meaning that if one domino falls to drive down oil supply (or lead speculators to believe oil supply could hypothetically decline), the typical annual increase in oil prices as summer driving season approaches will be all the more painful. The deeply unsettled situation in the Middle East, including but not limited to Iran, makes it unlikely we'll be able to keep a lid on oil market uncertainty. It's possible the oil markets can be contained to a politically manageable level for Obama, but my money is on gas prices soaring above $4.50 nationally by summer.
About the only thing that could save surging oil prices is another bad scenario....a collapse of Europe's economy and a recession in China driving down demand. The double-edged sword of that is obviously a new set of serious problems emerge for America if the global economy loses its footing.
As cartoonishly bad at politics as both leading contenders for the Republican nomination may be, there are still plenty of icebergs for Obama's reelection campaign to steer around, and few things could hamstring his efforts for a second term more than $5 a gallon gas.
posted by Mark at 7:14 PM
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