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Is There Anything That Washington Can Do About Gas Prices? Not Really

With Congress set to return on Monday, it’s looking like the skyrocketing prices of oil and gas will be at the top of the agenda, but mostly it will just be another excuse for both political parties to blame the other for a problem over which neither one has control:

WASHINGTON — Congress returns next week to a flaring brawl over oil industry profits and tax breaks, with both parties hoping to capitalize on growing public ire at high gasoline prices.

“When oil companies are making huge profits and you’re struggling at the pump, and we’re scouring the federal budget for spending we can afford to do without, these tax giveaways aren’t right,” President Obama said in his weekly address on Saturday. But in the Republican response, Rep. James Lankford of Oklahoma countered: “For more than two years, his administration has knowingly increased energy prices by choking off new sources of traditional American energy and smothering our economy in new energy regulations.

Last week, Mr. Obama touched off the latest flurry with a letter to Congressional leaders last week calling for the repeal of $4 billion a year in tax incentives for domestic oil and gas production, saying the industry was doing very well, thank you, and needed no help from the government. Republicans responded that the president’s proposal would only raise the cost of production and the price of gasoline, which now tops $4 a gallon in many parts of the country.

Both parties are planning legislative maneuvers this week to try to caricature their opponents as either in the pockets of the oil companies or hostile to domestic energy production.

The debate may generatea fair amount of noise that provides one side or the other with a temporary political advantage but is unlikely in the end to have an appreciable impact on gasoline prices.

“Every time Americans have to shell out $60 or $80 to fill their tanks, they mutter under their breaths about government and it puts pressure on Congress and the White House to do something,” said Byron L. Dorgan, the former Democratic senator from North Dakota who is now co-chairman of an energy project at the Bipartisan Policy Center in Washington. “But it’s just howling at the moon. The basic laws of supply and demand haven’t changed.”

While both political parties will fight over the issue, though, it’s the President who has the most to lose here:

“You can talk all you want about Republicans and oil companies and OPEC, but consistent in American history, the price of gas lands on the president’s desk as a blame issue and that goes back to the first oil shocks for Nixon,” said Jeremy Mayer, an associate professor at George Mason University. “It’ll be an albatross around his neck if it’s $5 by the election.”

With gas prices climbing, Obama’s poll numbers are indeed sagging. This week, a Washington Post-ABC News poll found 60 percent of independents are concerned enough about gas prices to say that they definitely will not back Obama for reelection.

If you’re in the White House, this has got to be making you nervous. The average national price of gas is now at $3.93 per gallon, that’s up more than a dollar from where it was is April 2010, and nearly two dollars a gallon higher than it was in April 2009.  Some projections suggest we could see gas prices at $5.00 or even $6.00 per gallon by the time summer rolls around. The economic impact of energy prices at that level are rather apparent, as are the political consequences. The truth of the matter, though, is that there’s very little that the Federal Government can do that would have a significant impact on the price of gas in the short or medium term.

To see why that’s the case, one need only examine the factors that are actually driving up gas prices today:

1.The Supply and Demand Factor. Fuel demand from China, India and Brazil — three countries with a combined population of 2.7 billion — is the chief factor behind rising prices. China’s fuel demand increased 12 percent in 2010. Meanwhile Saudi oil production has fallen, as AEI’s Steve Hayward told me. Perhaps the Saudis are pulling back after overstating their reserves, in which case we’re in serious trouble. Or perhaps they’re accepting higher prices in the short term to spend more money on their people to avoid a Libya-type revolution, in which case the production shortfall should be temporary. Either way, supply matters and there’s less of it.

2. The Middle East. Break the past year in gas prices into three phases. First, in the summer and fall of 2010, gas prices were pretty steady around $2.80. Second, beginning in the late fall, they started to climb gradually for six months. Third, since February, they have increased dramatically. What happened in February? Revolutions swept the Middle East, then Libya descended into civil war and its oil production fell by more than 50%. Ongoing uncertainty about the region continues to push up prices.

3. The Weak Dollar. A falling dollar can be good for Americans. It makes our exports more attractive and imports less attractive, which keeps more money in the U.S. economy. Unfortunately, as the dollar loses value, oil becomes more expensive.

4. The Summer. The EIA estimates that good weather and vacations cause U.S. summer gasoline demand to be 5 percent higher than during the rest of the year. Better weather means more vacations, which means more gasoline use. Think of it as a naturally occurring demand enhancer.

5. The Speculation Factor. Oil speculation — investors betting up the price of oil in the futures market — is a controversial factor in rising gas prices, and Hayward doesn’t believe it’s a deciding factor. Burned by the bust of oil prices in the 2009, it’s unlikely that oil speculators are back in the market bidding up the price of crude. But it’s a possible, if marginal, factor.

6. The Drill, Drill, Drill Argument. The U.S. can drill all it wants but it’s hard to find anybody who expects greater domestic production to move gas prices by more than, say, two percentage points in the next six months. The problem is that the market for oil is global and U.S. supply is too small to make an impact.

Taken together, it’s clear that the majority of the factors driving energy prices up are beyond the control of any government. In fact, the main reason that oil and gas prices are higher today than they were in 2009 is because the world economy is in far better shape now than it was then and demand has, consequentially, returned to pre-recession levels for the most part. Add this increased demand into the supply problems created by the fact that the majority of the world’s oil happens to be located in the most politically unstable part of the world and it’s easy to see why the prices of both these commodities has increased so significantly over the past two years.

As we’ve found far too often over the past 40 years or so, there’s very little we can do to make the Middle East more politically stable. That may happen some day, but it wil happen because the people of the Middle East want it to happen not because of some “solution” imposed from the outside. So, we’re likely to  have to deal with a politically unstable Middle East for the foreseeable future.

Additionally, there’s not much that can be done in the short term to impact the demand side of the equation. Demand for energy has increased in China and India precisely because these nations are becoming more developed economically, meaning that they need more oil for electricity generation and gasoline. Economic progress in those countries is actually a good thing, though, since it means a wider market for American goods and, of course, a better life for the people of India and China.  Back home, the demand for energy continues unabated and it’s now clear that even increases in the price of gasoline, whether naturally or through imposition of higher gas taxes, has very little impact on driving behavior.

Finally, there’s not a lot we can do on the supply side of the equation either. In 2010, the U.S. Energy Information Administration, part of the Department of Energy issued a report that found that opening the entire outer continental shelf to offshore drilling would have very little impact on the price of gasoline. As the chart below shows, the study analyzed the difference between full offshore drilling (Reference Case) and restriction to offshore drilling (OCS limited case).  In 2020, the report found that there would be virtually no  impact on gasoline prices.  In 2030, US gasoline prices would be three cents a gallon lower. So much for “Drill Baby Drill.”

Of course there is one thing that is virtually guaranteed to bring the price of oil and gas down. If the economy were to contract again, consumer and business demand for energy would fall, and world prices would decline at least to some extent. Of course, there are plenty of bad things about another recession, and no politician is going to tell the public that the best thing they could do to bring down gas prices is to crash the economy again. Instead, we’ll get more demands for “investigations” into speculation from the White House, and continued repetitions of the catchy, but rather meaningless, phrase “Drill Baby Drill” from Republicans. In the meantime, don’t count on prices at the gas station going down any time soon, at least not until this current price bubble has decided to deflate.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. john personna says:

    I think you are trying to conflate two things there, Doug.

    Obama talking about taxes on oil companies is not the same as talking about gas prices.

    In fact, there’s common ground between Obama and Ryan’s call (reported here) to end oil subsidies.

    Like or Dislike: Thumb up 0 Thumb down 0

  2. john personna says:

    Yeah, re-read your piece, and don’t see any Democrats blaming pump prices on oil company profits. Indeed, you quote a Dem as saying “But it’s just howling at the moon. The basic laws of supply and demand haven’t changed.”

    Like or Dislike: Thumb up 0 Thumb down 0

  3. John,

    Of course what Ryan and Obama are ignoring is that getting rid of those subsidies would likely increase energy prices, at least in the short term.

    Like or Dislike: Thumb up 0 Thumb down 0

  4. john personna says:

    First of all, your comment runs counter to your claim in the article.

    Second, the relation between oil company tax and pump price won’t be linear. There are feedbacks, and not all vendors enjoy equal subsidies.

    Third, is it really a price increase to pay more at the pump for gas, and less out of our tax bill for gas? I mean you get that the subsidies are paid buy us, right?

    Like or Dislike: Thumb up 0 Thumb down 0

  5. john personna says:

    Note: The tax subsidies must be a net transfer from those who drive less to those who drive more.

    Like or Dislike: Thumb up 0 Thumb down 0

  6. John,

    This is a post about the ability of the government to exert downward pressure on energy prices. I didn’t even talk about the subsidy issue because it’s a totally different topic. I did, however, respond to your comment. There’s no contradiction.

    Also, the marginal amount by which individual taxes might decrease if tax subsidies are eliminated (and personally I favor eliminating all tax subsidies and most deductions and credits as part of an overall tax reform package but that is, as I said) is likely to be far lass noticeable to the average consumer than what they pay every week or so when they have to fill up the Honda Odyssey.

    Like or Dislike: Thumb up 0 Thumb down 0

  7. jwest says:

    There are arguments both ways on each point raised, but it’s pointless to make any of them. Politically, the only thing that matters is the perception.

    Bush – $1.87

    Obama – $6.00

    Jimmy Carter is in serious jeopardy of losing his place in presidential history.

    Like or Dislike: Thumb up 0 Thumb down 2

  8. jwest,

    The only reason gas prices got that low under Bush is because the economy crashed, or perhaps that’s just a pesky fact you choose to ignore.

    Under George W. Bush gas prices hit $4.55 cents before declining because of the worldwide financial crisis. We haven’t hit that level yet, in case you haven’t noticed.

    Like or Dislike: Thumb up 0 Thumb down 1

  9. ponce says:

    Can anyone do anything about gas prices?

    Sure they can.

    The government has the power to set gas prices, nationalize the oil industry, make public the names of speculators bidding up the price of oil, etc.

    Like or Dislike: Thumb up 2 Thumb down 0

  10. ponce,

    Yea that is a “solution” worse than the problem.

    But nice try

    Like or Dislike: Thumb up 0 Thumb down 1

  11. ponce says:

    Why would publicizing the names of the people and corporations (and maybe even countries) bidding up the price of oil be a bad thing, Doug?

    Like or Dislike: Thumb up 1 Thumb down 0

  12. It would be mindless populism but it wouldn’t do anything constructive

    Like or Dislike: Thumb up 0 Thumb down 1

  13. Eric Florack says:

    Obama talking about taxes on oil companies is not the same as talking about gas prices.

    Yes, there is a connection.
    As usual, Obama gets things backward.
    He things raising oil company costs will lower the end price of their product.
    I mean, does anyone not a far leftist, NOT understand that taxes get passed on by ANY business, as a cost of doing business?

    Like or Dislike: Thumb up 0 Thumb down 2

  14. Eric Florack says:

    Ohhh… and doesn’t George Soros speculate in oil?

    Like or Dislike: Thumb up 0 Thumb down 1

  15. Pete says:

    Ponce, price controls have always worked well-NOT!! Publishing the names of people bidding up prices is a typical idea of communists. Good Lord, Ponce, you don’t usually sound so moronic.

    Like or Dislike: Thumb up 0 Thumb down 1

  16. jwest says:

    Doug,

    “Some 2008 reports including the March 6, 2008, “Early Show” exaggerated the already rising prices by emphasizing extremely high prices. That morning CBS showed viewers a California gas pump that was charging $5.19-a-gallon for regular unleaded before mentioning the national average for that day, which was $2.02 lower.”

    Read more: http://newsbusters.org/blogs/julia-seymour/2011/03/01/networks-link-bush-skyrocketing-gas-prices-15-times-more-obama#ixzz1L22EVEBT

    Like I said, it’s all perception. If it weren’t for viewers like you, the MSM would be forced to tell the truth.

    Like or Dislike: Thumb up 1 Thumb down 0

  17. ponce says:

    “It would be mindless populism but it wouldn’t do anything constructive”

    Really?

    Suppose we learned the price of oil was being bid up by the government of Saudi Arabia and Exxon?

    We could at least cut off their government subsidies.

    Like or Dislike: Thumb up 1 Thumb down 0

  18. G.A.Phillips says:

    Good Lord, Ponce, you don’t usually sound so moronic.

    waa…

    http://www.youtube.com/watch?v=Jg82EoUCiJY&feature=player_embedded#at=44

    Like or Dislike: Thumb up 0 Thumb down 1

  19. G.A.Phillips says:

    Ohh… and doesn’t George Soros speculate in oil?

    lol, oil,nations, the minds of children….

    Like or Dislike: Thumb up 0 Thumb down 1

  20. ponce says:

    G.A.,

    I used to work in the auction business back in college. You’d be surprised how often people were bidding against the owner of the item up for sale. Sure, sometimes the owner ended up making the “winning” bid on their own property, in which case they just paid a small fee and ran it again on another day.

    But most of the time an owner bidding on their own property got other bidders to bid higher.

    When you own billions of barrels of oil, it sure is worth your while to pay someone to see if they can bid the price of oil up, up, up.

    Like or Dislike: Thumb up 1 Thumb down 0

  21. G.A.Phillips says:

    ponce, I have been to a few auctions, I love locker wars,I have also worked one, speculation sucks, but then so does communism.

    We have crap loads of energy in this country, crap loads! Fossil fuels up the yin yang! Can’t we just get and use that while we invent and perfect new sources?

    Compromise…. think if we would have started 2 years ago, 10 years ago, 30 years ago…..

    Now we need someone to save us, then get us to start all late and crap.

    I pray that that someone comes along and that we start soon:(

    Like or Dislike: Thumb up 1 Thumb down 1

  22. anjin-san says:

    Standard Oil’s profit surged by 26% in the first quarter. Exxon made a tidy 10 billion dollar profit.

    Clearly, high gas prices are Obama’s fault. Or George Soros’.

    Like or Dislike: Thumb up 0 Thumb down 2

  23. anjin-san says:

    Bush – $1.87

    Obama – $6.00

    Did it hurt when you pulled those numbers out of your ass?

    Only perception here is that you are a liar AND an idiot…

    Like or Dislike: Thumb up 0 Thumb down 1

  24. Ben Wolf says:

    Ponce,

    It’s not an issue of countries and speculators bidding up the price of oil. We no longer have access to vast quantities of conventional crude, the cheapest and highest quality type of oil. Meeting demand over the last two decades has forced the oil industry to move into expensive, energy intensive sources like shale, tar sands and deep water.

    Saudi Arabia has been deliberately overstating their reserves for years, and in 2008 they finally admitted (internally of course) their production trajectory was unsustainable.

    I’ve seen estimates that for every year of fossil fuel use, we burn the equivalent of 400 years of planetary biomass. We’ve hit the limits of what the planet can provide, and it’s a choice of either chronic recessions every time gas hits a new high, or a massive commitment to increasing efficiency.

    Like or Dislike: Thumb up 1 Thumb down 0

  25. ponce says:

    Ben,

    I understand the desire to to randomly assign your political beliefs as the cause for events, but supply and demand has nothing whatsoever to do with the recent 30% jump in the price of gas.

    Gas prices have jumped because some people, companies or countries are bidding up the price of oil.

    It’s in our national interest to find out who.

    Time to see if the C.I.A. and the N.S.A. can actually produce some intelligence that has value to the American people…

    Like or Dislike: Thumb up 0 Thumb down 1

  26. anjin-san says:

    Ben & Ponce are both probably at least partially correct. It is a complex situation…

    Like or Dislike: Thumb up 1 Thumb down 0

  27. reid says:

    He things raising oil company costs will lower the end price of their product.
    I mean, does anyone not a far leftist, NOT understand that taxes get passed on by ANY business, as a cost of doing business?

    Just where does Obama claim that it has anything to do with lowering gas prices? Wingnuts across the land have been wailing and gnashing their teeth over the deficit, calling for ending the funding to PP and NPR, among other trivial things, and Obama counters that we can save a large chunk of money by ending subsidies to incredibly profitable companies. Do you disagree? Or are you simply twisting events to try to make Obama look bad as usual? Never mind.

    Like or Dislike: Thumb up 0 Thumb down 1

  28. Patrick T. McGuire says:

    As we’ve found far too often over the past 40 years or so, there’s very little we can do …

    Additionally, there’s not much that can be done in the short term …

    Finally, there’s not a lot we can do…

    I wonder how many people told JFK “Geez Jack, there just isn’t much we can do to get a man to the moon like you want”?

    Like or Dislike: Thumb up 0 Thumb down 0

  29. Wiley Stoner says:

    Doug, you do not see any correlation between this administration’s stance on fossil fuel energy and the cost of gas. How about the fact there used to be many more drilling rigs in the Gulf of Mexico than there are now. How about the fact Ken Salazar would cripple this country for the sake of the people who own him, think green? Shell just got stopped from opening drilling at a place they had spent billions to develope. Only an idiot would beleive when the third largest oil producer in the world curtails exploration and recovery prices will not rise. Experts in the field believe if the government got out of the regulation of energy business, prices at the pump would go down. But then you posted this report and you do not think government has any hand it this, in spite of the statement by Obama he would like to see gas prices much higher and those in the EPA and Energy dept. would like to see European like prices. You can believe what you want, Doug, but when you put your by line on foolishness like this, you are not someone I would hire to defend me in an air tight defense.

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  30. Wiley Stoner says:

    Anjin, there is a liar who posts on this blog regularly and it is not GA, You lie, when someone calls you on it, you call them liars. If I were to guess, I believe you suffer from the brain disorder called liberalism. Sorry, Anjin but they have not figured out a way to fix stupid. I guess you are stuck. An addional answer to what Doug posted above. When you curtail production and print billions of dollars, you decrease supply and raise the cost because money is less valuable. I think some of the people who post here must have taken Econ classes from Politcal Sci. Profs.

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  31. mpw280 says:

    Your president of choice said explicitly that he “Would Raise Gas Prices”, flipping own it. Second the children at the Fed and Treasury have printed money which debases the US $ which is what world oil is traded in, thereby increasing the price of oil, again own it . As to anjin, way too complex for the likes of Obama, Geitner, and Bernanke, let alone you and liberals in general. Hope you have stockpiled some basics like rice, flour, pasta, and meat in the freezer. Your boy and his ship of fools have sponsored inflation the likes of which have not been seen since the supreme captain of the ship of fools Carter. Fluff it away all you want but Obama and his fools have screwed the pooch, again OWN IT, YOU VOTED FOR THE FOOL. mpw

    Like or Dislike: Thumb up 0 Thumb down 0

  32. ponce says:

    mpw,

    Who do you think will win next week’s Republican primary debate?

    Like or Dislike: Thumb up 0 Thumb down 0

  33. mpw280 says:

    ponce, not you. mpw

    Like or Dislike: Thumb up 0 Thumb down 0

  34. john personna says:

    So MPW, other countries with other presidents are ok?

    (Re. Speculation – when sellers like the Saudis are ok with a moderate price, they may not press it to see how high buyers, including new buyers in emerging economies, will go. In this case, speculators can step in and force price discovery. It’s still a natural market price, but one that OPEC etc were trying to avoid.)

    Like or Dislike: Thumb up 0 Thumb down 0

  35. mpw280 says:

    jp wtf are you talking about? Do you even know. Our president has said he is OK fing ok with higher gas prices, his bonehead in charge of the fed and treasury are ok with higher inflation and printing money yet you are a flipping moron about what that ends up with. ARE YOU FLIPPING STUPID? Other presidents have nothing to do with the debasement of the US $, but suck on Obamas big long one and have his hairy ones bounce off your chin. But don’t call yourself a teabagger because that would be a bad thing. mpw

    Like or Dislike: Thumb up 0 Thumb down 1

  36. Jay Tea says:

    Funny, I just read an article that came to the opposite conclusion — by noting a time when the government did act, and brought down energy prices.

    I also note that the government makes more in taxes on gasoline than the oil companies do in profit — significantly more. So a reduction in the gas tax would do far more than yelling and threatening the oil companies, let alone imposing an illegal “permitorium” on offshore drilling, shutting down Exxon’s multi-billion-dollar Arctic venture just as it’s about to start, and instead choosing to subsidize offshore oil drilling in Brazil.

    Set aside Obama’s pretty words, and look at his deeds. He’s working very hard at INCREASING our dependency on foreign oil, and DECREASING our chances of energy independence. That’s the common thread of his actions.

    The only question is: is he just so stupid he doesn’t realize it, or does he know it and have some actual plan behind it?

    J.

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  37. An Interested Party says:

    Your president of choice said explicitly that he “Would Raise Gas Prices”, flipping own it.

    Perhaps you could stop foaming at the mouth for a moment to provide a link to back up that claim…

    Like or Dislike: Thumb up 0 Thumb down 0

  38. mpw280 says:

    IP suck his long one a little longer and think about it. He FUC*ing did say he was OK fling OK with higher oil and gas prices, not even your bs can back up the claim that he didn’t. Why don’t you prove he didn’t for a flipping change. Prove Obama isn’t an anti oil socialist, but wait you flipping can’t. You are too busy sucking on his long one with his hairy ones bouncing on your chin.

    Like or Dislike: Thumb up 0 Thumb down 1

  39. mpw280 says:

    Like or Dislike: Thumb up 0 Thumb down 0

  40. mpw280 says:
  41. Ben Wolf says:

    Other presidents have nothing to do with the debasement of the US $ . . .

    MP,

    You are a liar.

    http://www.ritholtz.com/blog/wp-content/uploads/2011/04/dollar-index.png

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  42. Ben Wolf says:

    Prove Obama isn’t an anti oil socialist . . .

    Fascinating how often Rightists throw the “S” word around. Do you even know what socialism is?

    Like or Dislike: Thumb up 0 Thumb down 0

  43. Ben Wolf says:

    You can see in the following graph that U.S. Crude production peaked around 1970 and steadily declined from 1985-2008.
    http://www.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus1&f=m

    Notice an actual increase in production over the last two years of the Obama administration, something neither the Reagan or Bush administrations managed to pull off.

    Like or Dislike: Thumb up 0 Thumb down 0

  44. An Interested Party says:

    I had no idea that they allowed such wide-spread Internet use at whatever asylum houses you, mpw280…as can be clearly seen at this link, with the corresponding video, the president never said that he “would raise gas prices”…so the only one who needs to do any owning is you…take a moment from flicking spittle at the keyboard to own up to your lie…

    Like or Dislike: Thumb up 0 Thumb down 0

  45. Ben Wolf says:

    Here’s another chart showing a sharp increase in American production under Obama, in comparison to the all-time production low of the Bush Administration:

    http://climateprogress.org/wp-content/uploads/2011/03/USFieldCrudeProd2000-2010-New.bmp

    Like or Dislike: Thumb up 0 Thumb down 0

  46. anjin-san says:

    The checking I did appears to back Ben up. Under Bush, oil domestic production declined steadily and gas prices rose steadily.

    And the right remained silent about it steadily.

    Like or Dislike: Thumb up 0 Thumb down 0

  47. ponce says:

    “Here’s another chart showing a sharp increase in American production under Obama”

    Despite wingnut propaganda to the contrary, the number of oil rigs operating in the U.S. is up 22% over the past year

    http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

    Like or Dislike: Thumb up 0 Thumb down 0

  48. Jay Tea says:

    Fascinating how often Rightists throw the “S” word around. Do you even know what socialism is?

    Let’s see… last time I checked, it meant “the people own the means of production.”

    Such as, say, the government taking over a private business, setting aside its own laws regarding bankruptcy, and determining the new ownership and management on terms favorable to its favored constituencies and screwing over other involved parties, while keeping a sizable chunk of said business for itself? That “socialist” for you?

    How about asserting control (but not actual ownership) of the majority of the nation’s banks, coercing all (even those not in financial trouble) to accept loans that some don’t even need, then using said loans as leverage to get them to comply with the government’s demands?

    How about asserting control over 1/6 of the nation’s economy, the health care industry, and demanding that all citizens purchase a service that they may not want or believe they need, and dictating the prices and terms of said services from the providers?

    You know, you’re right. We shouldn’t call it “socialism.” That’s too bland a term. It should just be spelled out in stark terms, and let the ugliness be self evident.

    J.

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  49. Jay Tea says:

    anjin, I’d like to see your source for “gas prices rose steadily.” I’ve looked at the DOE’s weekly report on the average price of premium gas since 1996, and it’s hardly steady. In fact, there was a hell of a spike between February 2008 ($3.19) and October 2008 ($3.18) that saw a peak in July ($4.34). That means it went up around 35% in 5 months, and dropped back in 4 months.

    Let’s look at gas prices under Obama, with the criteria “increase since he took office” and “increase from its lowest point since he took office.”

    November 3, 2008 (first report after his election): $2.68
    January 26, 2009 (first report after his inauguration): $2.07
    December 29, 2008 (lowest price after his election): $1.87
    January 26, 2009 (lowest price since his inauguration): $2.07
    April 11, 2011 (highest price since his inauguration, also most recent date): $4.03

    In Obama’s 2.25 years in office, gas prices have gone up roughly 95%. From the day Bush took office to the day he left (give or take a few days — the DOE’s numbers are updated weekly), they went from $1.66 (January 22, 2001) to $.2.08 (January 19, 2009) — roughly 40%.

    Let’s just toss in one more — gas prices from Bush’s inauguration to roughly this same point in his administration, which was post-9/11. The last data point I have is for 4/11/11, so we’ll go to that same point in 2003, and it’s 4/14/03 — $1.79.

    Now let’s go back to that Bush gas price peak — the precise date on the chart is July 7 & 14, 2008 (same number for both weeks, $4.34). According to the article I linked to at 20:43, July 14 was the day “signed an executive order lifting the moratorium on off-shore drilling in the eastern half of the Gulf of Mexico and off the U.S. Atlantic and Pacific coasts.” And the price of gas started dropping IMMEDIATELY and steadily (except for one two-week blip in September), to a low of $1.92 on January 5, 2009.

    So, anjin, you wanna show me how “The checking I did appears to back Ben up. Under Bush, oil domestic production declined steadily and gas prices rose steadily?” ‘Cuz this DOE-generated spreadsheet I linked to says you’re full of crap on the gas prices part.

    J.

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  50. Axel Edgren says:

    People suffer for reasons unrelated to gas prices: “BWahaa you parasites should have made a better bed for yourselves, don’t expect the government to do anything!”

    People suffer due to higher gas prices after having spent several years not planning ahead and refusing to buy cars with better mileage standards: “THIS IS PRIORITY 1! HELP THE POOR SOULS OBAMA! GOVERNMENT ACTIVISM NOW! FELLATE THE OIL COMPANIES HARDER!”

    You complain when the government tries to help people with health insurance, but apparently we now need a symposium, a crisis group and a national conversation because gas prices have gone up…

    You are not good for the country, JT. You are one of its many problems.

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  51. Gerry W. says:

    Cases like this takes a long term view. We should have been working on energy independence thirty years ago. As it is, any growth from China, any disruption of drilling, pipe lines, and refining, any mishap or war in the Middle East, and any fear of any other disruption will raise oil prices. The commodity is limited and we keep ignoring the consequences. Ex CEO of Shell oil said that we are nowhere with some 8 presidents and 19 congresses. It is interesting in how slow our congress is. Boone Pickens has spent millions over the last three years in pushing his plan. While some of his plan may not work, there are other parts that would. Three years to make a decision is too long.

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  52. [...] Doug Mataconis proves once again why Outside The Beltway is becoming mostly left leaning [...]

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  53. Jay Tea says:

    Axel, you are truly pathetic. The “action” Bush took that had such a drastic effect on gas prices was to simply “get out of the way.” And note that gas prices started rising back up just as Obama was coming in, and restricting oil drilling.

    Yes, I’m aware of the correlation-causation fallacy. And yes, I’m aware that there are other factors at play. But the line of events is pretty hard to refute: Gas prices go up, president ends ban on oil drilling, gas prices go down. President resumes ban on oil drilling, gas prices go back up.

    If I wanted to get the government more involved, I’d call for tapping the strategic petroleum reserve. Instead, I’ve suggested cutting the taxes on gas and opening up more areas for oil development — both examples of the government choosing to do less.

    Sadly, in the current regime, “the government doing less” is not an option.

    J.

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  54. Jay Tea says:

    Gerry, why bother? We won’t see any results from that right now.

    That’s the argument that’s ALWAYS used. When the president closed off ANWR, he said it was because we wouldn’t see any benefits for ten years.

    That was in 1998.

    J.

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  55. sam says:

    @Jay

    “Funny, I just read an article that came to the opposite conclusion — by noting a time when the government did act, and brought down energy prices.”

    googling ‘gulf deep water drilling permits’ yields:

    #
    Obama Administration Approves Fourth Gulf Deepwater Drilling …
    Mar 22, 2011 … The Interior Department announced Tuesday it has approved another Gulf of Mexico deepwater drilling permit under a series of beefed-up …
    http://www.commondreams.org/headline/2011/03/22-6 – Cached

    #
    Obama administration approves fourth Gulf deepwater drilling …
    Mar 22, 2011 … The Interior Department announced Tuesday it has approved another Gulf of Mexico deepwater drilling permit under a series of beefed-up …
    thehill.com/…/151277-obama-administration-approves-fourth-deepwater-drilling-permit – Cached
    #
    Deepwater drilling permits in the Gulf of Mexico get the green …
    Deepwater drilling permits in the Gulf of Mexico get the green light. by Stuart Hampton, March 24th, 2011, Thursday. Category: Environment, In the News, …
    http://www.bizmology.com/…/deepwater-drilling-permits-in-the-gulf-of-mexico-get-the-green-light/ – Cached
    #
    Exxon Gets 4th Deepwater Drilling Permit In US Gulf – FoxBusiness.com
    Mar 22, 2011 … HOUSTON -(Dow Jones)- U.S. regulators said Tuesday that oil giant Exxon Mobil Corp. (XOM) has received a permit to drill in the deep water …
    http://www.foxbusiness.com/…/exxon-gets-4th-deepwater-drilling-permit-gulf/ – Cached

    Etc. So, on your theory, shouldn’t oil prices be coming down markedly?

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  56. Jay Tea says:

    sam, did it occur to you to actually read the links you listed? TWO permits, the first issued in over a year.

    And those took a court order to pry out.

    More notably, Shell has spent about 4 billion dollars on an Arctic drilling program over several years… and the EPA shut them down at the last minute because of fears that the emissions of an icebreaker might have an adverse effect on a village of 700 people hundreds of miles from the site.

    And while Obama has been doing all he can to prevent domestic oil development, he’s done all he can to help Brazil develop oil off its shores and promised that the US would be a great customer for their oil.

    So… offshore oil drilling is bad off the US, but fine off Brazil? Is Obama a racist? It’s OK if oil messes up brown people’s coastlines?

    And so much for his pledge to work towards energy independence — he just pledged to INCREASE our dependence on foreign oil.

    The thing with Obama is to ignore his words, and discredit anything he does that he’s coerced into… it’s what he does of his own volition that matters. And here, he’s shown that he is against US energy independence.

    Which is why so many oil rigs have left the Gulf, and gas prices keep rising.

    J.

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  57. anjin-san says:

    Axel… you are not really wasting time on vaporware J are you? Try talking to a rock, it is more rewarding :)

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  58. anjin-san says:

    For those who are interested, some gas price data:

    http://zfacts.com/p/35.html

    Which show, gasp, a steady increase in gas prices under Bush. Yet another chapter in the “Exit Clinton, enter Bush, everything starts to suck” saga.

    And yes, after the oil companies put the squeeze on in 2008 and Bush was kind enough gave them what they wanted, prices dropped like a stone. For a little while.

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  59. Eric Florack says:

    If the answer that we keep ignoring, and I think intentionally so, is “drill baby drill”. For all the effort to that end, there is no way to overcome the laws of supply and demand. the fact is, there is something that the government can do. It can get out of the way. Pacific league, it can women eight the EPA And allow the free market to take hold. Once we start producing our own well, under those conditions, we can fairly will dictate what prices we will and will not pay.

    The biggest problem that we have in terms of the cost of oil, is the power of government, and those who wield it.

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  60. Eric Florack says:

    Which show, gasp, a steady increase in gas prices under Bush. Yet another chapter in the “Exit Clinton, enter Bush, everything starts to suck” saga.

    Perhaps you’d like us to ignore the fact that guess prices of doubled since bush left office? The left was filling its diapers while bush was in office about the relatively small price increases of that time. Why is it you’re not willing to lay blame on this White House for the price is having doubled since Obama came to be immaculated?

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  61. Ben Wolf says:

    So Jay doesn’t actually know what socialism is. Apparently his definition is “Anything government does is socialism.”

    Socialism is the ownership of the means of production by the proletariat. Higher taxes aren’t socialism, regulations aren’t socialism and expanding government isn’t socialism. The Sovet Union wasn’t socialism, in fact it was almost the exact opposite. Is it too much to ask that you actually read Marx or Engels before forming an opinion?

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  62. Ben Wolf says:

    Erik,

    Because higher prices under George Bush weren’t his fault, just as high prices now aren’t Obama’s. But you keep trying to have it both ways, exhonerating your tribe of any responsibility while trying to hold your adversarial tribe accountable for the samemdamned thing.

    Now, what you should do is admit that you’re holding on to one hell of a double standard.

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  63. Eric Florack says:

    Oh, I’m hardly trying to have it both ways. Tthey are both responsible. Bush didn’t eliminate the EPA either. One more reason I keep saying bush was no conservative, but rather at best, a centrist.

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  64. Eliminating the EPA is never going to happen regardless of what it’s merits might be so it is kind of silly to talk about it as a possible course of action.

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  65. Eric Florack says:

    Ah, but it IS possible once Americans see what that nonsense is casting us. You may (or may not ) know that the Senate actually had a bill that damn near passed, which put extreme limits on the huge power the EPA has. I suiggest we’re an election away from such bills being passed.

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  66. Axel Edgren says:

    Eliminating the EPA is never going to happen regardless of what it’s merits might be

    No merits. Corporations are predators and will do everything that is legal or is considered something they can get away with. Everything. Eliminating or sabotaging the EPA is comparable to a terrorist act looking at probably casualties and suffering.

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  67. Eric Florack says:

    Gotta recalb the voice dictation. Sigh

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  68. [...] Is There Anything That Washington Can Do About Gas Prices? Not Really [...]

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  69. jwest says:

    Ben,

    You might be misunderstanding Jay Tea and other conservative’s views on government.

    First off, I believe the most common definitions of socialism would denote an element of central planning and control (in lieu of ownership) of the means of production. The planning aspect can be anywhere from full Soviet style to decentralized or market-specific and the control can amount to picking management to onerous tax and regulation policy.

    The key aspect that signifies a socialist system as opposed to a capitalist system is the adherence to the rule of law. In a capitalist system, rules are established for the overall good of society and are applied equally without regard to factors such as social position, race, wealth, religion, gender or anything else. Everyone knows the rules and operates by them, making investments, taking risks, reaping rewards or going bankrupt.

    In a socialist society, the planning aspect interferes with the rule of law. By necessity, laws must be arbitrary in order to make the changes necessary to accommodate social demands. Additional rules and burdens are placed on companies that do too well, firms that should fail are supported, and laws that were intended to be applied equally are ignored or rigidly enforced, depending on the race or wealth of the individual.

    Conservatives don’t oppose government, in fact they depend on it. Government is essential to organize and be the mechanism of the people to collectively do what they could not do individually. Infrastructure, defense, currency and numerous other functions are what the government can and should do. Even a government-run single payer health system falls under the auspices of the government according to conservative icon F.A. Hayek.

    Personally, I don’t understand why most liberals deny their desire to bring a greater amount of socialism to the government.

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  70. Ben Wolf says:

    Erik,

    I suppose I had hope that some level of reasonable conversation was possible.

    If, after all the data and discussion posted here your take is the EPA is responsible for high gasoline prices, then we’ve reached the end of that road.

    When I was growing up conservatism was about understanding there was no such thing as a free lunch, that actions had consequences. But what we have today is a radical Right which insists eveey problem is the fault of liberals, socialists and government, and if only we could purge our country of these evils everything would be great.

    Sorry but it doesn’t work that way. The radical Right can either accept that the bill for decades of selfishness, profligacy and imperialism has come due, or it can continue on the self-destructive path it now walks.

    I won’t hold my breath in anticipation of choosing responsibility.

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  71. Eric Florack says:

    Axel: Fear tactics?
    No sale.

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  72. Eric Florack says:

    I suppose I had hope that some level of reasonable conversation was possible.

    If, after all the data and discussion posted here your take is the EPA is responsible for high gasoline prices, then we’ve reached the end of that road.

    There’s no such thing as a free lunch, you say, and yet you’re unwilling to recognize that the added regulations laid down in the name of “saving the planet” have dire economic consequences.

    Interesting.

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  73. Ben Wolf says:

    Jwest,

    Socialism in Marxist theory means a period of dictatorship under proletarian control before the state “withers away”. I haven’t noticed the government becoming more responsive to the poor, have you? What I have seen is a government fallen under control of an exceedingly wealthy and well-connected elite, which uses that control to maintain the status quo which has enriched them.
    This includes industrialists, corporations, politicians and media figures paid to spin propaganda.

    We aren’t becoming more “socialist”, we’re becoming more fascist.

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  74. Jay Tea says:

    Oh, my, anjin. You showed me.

    That graph derives from the very same data source I provided, but yours is a pretty picture for those who can’t read. And it confirms precisely what I said — gas spiked under Bush, crashed back after he opened up more oil exploration, and starrted going right back up just before Obama took office to the point where it’s almost double what it was the day he took office.

    And there’s nothing “steady” about that chart, it’s spikes all over the place. And the biggest drop was July-December 2008, the end of the Bush administration.

    That’s what you learn when you can actually read numbers, and not just glance at pretty pictures.

    J.

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  75. anjin-san says:

    Jay..n get a dictionary, and look up the difference between steadily and constantly. Then try and wrap you brain around pricing at the peak of a historic spike and the following trough being outliers at the margins of an atypical event.

    Then go back to 7/11 or wherever it is you work, and get back to it.

    And Bush caving to the oil companies after their power play and giving them exacatly what they wanted? Not impressive except to right wing tools that enjoy being bent over by Exxon…

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  76. anjin-san says:

    you have to love the whole line about today’s high gas prices being the result of obama stifling domestic production. only problem is production is up under obama, just as it was down under bush. Oops…

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  77. Eric Florack says:

    Yes, Domestic oil production is up, but it has nothing to do with Obama. The current production is the result of decisions made years, or even decades ago. Obama has proven to be the enemy of domestic oil production, even while he encourages increased production from foreign sources, including Brazil.

    Funny how you failt to mention that.
    Also funny what the future, given those facts, is going to be like given the anti-energy stance of this administration.

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  78. anjin-san says:

    did not say that the increase in domestic production was due to obama just that this happened in his era. I can use smaller words if you’re having trouble.

    point is that the argument made on the right “high gas prices are obama’s fault” is simply partisan nonsense which is pretty much what we expect from you. You were humiliated on the birther issue, so now no reed is too slender to cling too.

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  79. Jay Tea says:

    anjin, you really need to get out of your fantasy world. No one’s saying the rising gas prices are Obama’s fault. What I’m saying is that 1) there are things Obama can do that would help a great deal, and B) the things he has done and proposes doing will likely make it worse.

    But when we remember that this is a man who, as a candidate, said his energy policy would make energy prices “necessarily skyrocket” and appointed as Energy Secretary a man who said the US ought to be paying the same prices for gas as Europe does, it all makes a certain amount of sense.

    I’m still trying to work in “the US will subsidize Brazil’s offshore oil development and pledge to buy a lot of it” fits in, but I’m sure it all hangs together somehow…

    J.

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  80. [...] Is There Anything That Washington Can Do About Gas Prices? Not Really [...]

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  81. ponce says:

    “No one’s saying the rising gas prices are Obama’s fault.”

    http://lmgtfy.com/?q=rising+gas+prices+are+Obama%E2%80%99s+fault.

    How can you tell when Jay Tea is lying?

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  82. Jay Tea says:

    Sigh. Obviously I meant “no one here,” but ponce the literal asshole (and I mean that both ways) has to remind us all how he earned that title.

    J.

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  83. An Interested Party says:

    Obviously I meant “no one here,”

    Actually, that is inaccurate…

    mpw280 says:

    Saturday, April 30, 2011 at 19:43

    Your president of choice said explicitly that he “Would Raise Gas Prices”, flipping own it. Second the children at the Fed and Treasury have printed money which debases the US $ which is what world oil is traded in, thereby increasing the price of oil, again own it . As to anjin, way too complex for the likes of Obama, Geitner, and Bernanke, let alone you and liberals in general. Hope you have stockpiled some basics like rice, flour, pasta, and meat in the freezer. Your boy and his ship of fools have sponsored inflation the likes of which have not been seen since the supreme captain of the ship of fools Carter. Fluff it away all you want but Obama and his fools have screwed the pooch, again OWN IT, YOU VOTED FOR THE FOOL. mpw

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  84. anjin-san says:

    I am kind of losing track of how many ways Jays posts on this thread have been show to be BS. Does anyone have a count?

    That’s what you learn when you can actually read numbers

    If you could actually read the numbers, you would be looking year over year across the 8 year arc of the Bush administration. Daily, weekly & monthly fluctuations in something as volatile as gas prices are not very meaningful. Long term trends are. The long term trend in prices under Bush was steadily upward. Production was down, even though Bush “got out of the way” of the oil companies to the extent they damn near had their own office in the west wing. Certainly the regulatory environment was a complete joke.

    But when we remember that this is a man who, as a candidate, said his energy policy would make energy prices “necessarily skyrocket” and appointed as Energy Secretary a man who said the US ought to be paying the same prices for gas as Europe does, it all makes a certain amount of sense.

    You are either saying higher prices are Obama’s fault or you are simply blathering.

    So are you a liar or a blathering idiot? Well, we already know you are a liar. And wait, we already know you are an idiot. I retract the question.

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  85. Jay Tea says:

    Actually, Anjin, I went back at my earlier numbers, and found I’d made a mistake. A very simple one, one that embarrasses me.

    You said I need to look at long-term trends, not short-term fluctuations. Well, I compared the gas prices under Bush after 2.25 and 8 years, and they were 8% and 25% respectively (I mistakenly said 40% for the latter number). And in the 2.25 years of Obama’s administration, they’ve gone up 95%. (All numbers rounded to the nearest whole number.)

    I used weekly numbers, but here they’re taken over literally years. That “long term” enough for you?

    Good lord, it’s like talking about the deficit. “You didn’t complain about Bush’s spending, so why are you complaining now?” Because Bush’s was bad, but sustainable. Obama’s taken Bush’s bad policies and thrown them into overdrive. Here, it’s “you didn’t complain about 25% over 8 years, so why are you whining now about 95% in 2.25 years?”

    And I don’t say Obama did it on purpose, especially since he didn’t get his cap and trade disaster passed. I’m saying that these higher prices are perfectly in line with his goals, so instead of saying “we need to do something about this,” he’s saying “this is just about right — what’s the big deal?”

    After all, if you don’t like paying higher gas prices, go out and buy a more fuel-efficient vehicle. That financial decision should pay for itself in… oh, say a decade or so. And those people who can’t afford gas — why, they’re just the perfect people to spend 30K or so on a new car!

    This is precisely what we should expect from electing a man who’s spent his whole life learning how to NOT make decisions, and never had to face the responsibilities that go with them.

    J.

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  86. An Interested Party says:

    I’m sure it will be shocking for some people to learn that increasing the gas mileage of American cars will do more to cut gas prices than drilling…this ties in directly with what the president was saying in the interview that mpw280 blatantly distorted…

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  87. anjin-san says:

    And in the 2.25 years of Obama’s administration, they’ve gone up 95%

    Guess the part about the 2008 spike being an atypical event that produced highs and lows that were outliers (such as the post-spike low price around the time Obama took office) went a little over your head. Well, it’s a very easy bar to clear.

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  88. [...] colleague at OTB, Doug Mataconis, has a post up there titled “Is There Anything That Washington Can Do About Gas Prices? Not [...]

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  89. Eric Florack says:

    did not say that the increase in domestic production was due to obama just that this happened in his era. I can use smaller words if you’re having trouble.

    The implication of your statement was clear. Quit trying to weasel out now.

    And actually, no, your fantasy of my position on the Birth Certificate is just that, a fantasy. My position has always been that it was one question of many.

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  90. Jay Tea says:

    Interested, would that be when the president said that we should all keep our tires inflated, or when the president said that a guy with ten kids that he should get a (non-existent) hybrid van?

    Anjin, you call it a “spike.” I’m not so sure. Obama has already ruled out the action that brought down the last spike, and has shown that he doesn’t see any real problems in the price of gas. So I don’t expect this “spike’ to ease any time soon.

    Which makes keeping my 10+-year-old SUV on the road more and more expensive. If I can’t afford the gas, perhaps I should go buy a new hybrid vehicle instead…

    J.

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