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POLITICAL BACKGROUND 3
THE DATA 5
According to the U.S. Department of Energy, the State of California is currently carrying a
heavy burden in gas prices. With the state average hovering around $4 per gallon, the
average consumer is feeling a worse pinch than during the 2008 election cycle, when gas
prices hit the mid $3 range.
Along with Obama’s growing problems related to his deficit reduction plan, and
preparations for his reelection, the need for major attention on energy policy and foreign
trade in relation to oil is overwhelming.
Fortunately, this problem has not gone unnoticed by the White House.
As you read this report, I hope that it will provide some indication that the election could
easily be swung by the gas pumps and polling data.
Sincerely,
Alex Tavlian
POLITICAL BACKGROUND
Two of the three issues were related to the foreign policy of the United States during the
Carter administration in the late 1970s. Carter’s decision in 1979 to stop Iranian oil imports
to the United States was one of the contributing factors to skyrocketing prices in gas.
Six years previous, during the Ford administration, the similarly high prices in oil caused
odd-even rationing to American consumers. The idea of oil rationing would return in the
Carter administration, and would be implemented in a few states, but was never nationally
implemented.
In 2008, a barrel of oil peaked at $145. During the first two-and-a-half years of the Obama
administration, the price of oil dropped considerably. And then it resurged to over $100 per
barrel in real terms.
That was primarily due to unrest and widespread government overthrows in the Middle
East, causing many indexes of oil have yet again raised a barrel to its highest since 2008.
While the price of gasoline is higher than 2008, the number is higher due to heavy
speculation on the part of futures traders.
As speculation grew over the Egyptian revolution in January, the price of a barrel of oil rose
back over the $100 mark.
The consequences of futures market speculation could prove disastrous to the Obama
administration, and Obama for America, as 2012 nears closer and closer and the Libyan
conflict grows.
However, the market cannot be blamed alone. There is some fault on the part of the
Obama administration. Most scenarios where active military engagement places American
troops in an oil-producing region makes speculators uneasy, and for good reason.
Their greatest fear is that production will be drastically cut during a time of military
engagement. Following Egypt, the entrance of American and NATO forces into Libya
caused the same sort of fear for oil traders.
As the Obama administration supports and aided the NATO excursion into Libya, it is also
crippling it’s energy policy and hurting its chances with the voters as they feel a chokehold
at the pumps.
The first step would be to shed light on the problem. California Republican congressional
and Senate candidates have a great opportunity to open up debate on oil imports, and the
devastating effect of the Obama foreign policy on the price of oil and, more importantly,
gasoline.
For the prospective candidates running against Obama, they can win support from
conservatives by supporting a more aggressive domestic energy production policy and
greatly reducing foreign imports to the United States. In the November, they just want to
point a finger at Obama and say, “Blame him.”
THE DATA
The correlation of this entire publication is to show that the increase in gas prices have had
a negative effect on the President’s approval rating.
By the numbers alone, it doesn’t always match up. And there’s a reason for that.
Obviously, the Presidential approval rating isn’t meant to categorize the American
electorate’s feelings on the price of gasoline. Because of that, the Presidential approval
rating will vary dependent upon the actions made by the President, the White House, and
even Democrats nationally.
Below are the explanations for the oddities in the correlation of approval rating and average
gas prices.
The MARCH 7 week was a resurgence from the President’s month-long stable 48% after
the State of the Union address. The 46% drop was an unnatural drop from the polling
numbers.
Gas prices began to climb as the Libyan leader starts to face greater problems against the
anti-Gaddafi movement, and more attention is brought on the country by western media
(the rise could have been worse had the stories about Libya’s conflict not been drowned
out by Charlie Sheen).
The reason why Obama’s numbers surged in this week-long period was due to his
address to the nation at the National Defense University regarding Operation Odyssey
Dawn and the American timeline for withdrawal.
The address, while considered ambiguous, was finally cleared up by the White House.
Their clarification focused on the fact that American forces would leave Libya by March 31
and hand over operational responsibilities to NATO.
On the gas side, prices rose due to speculation that Libyan production would greatly slow
after the US and NATO began their operations in the conflict.