Why Gas Prices Are Out of Any President’s Control

pineinthegrass wrote:
[snip]

(I'm waiting on the Iran attack).

[snip]

So am I!

lionshead2010 wrote: I'm not economist but I still believe that the foreign policy actions (or inactions) of world leaders such as our President do have an impact on oil futures which then affect gas prices.

That being said, here is the plan:

"A better approach would be to gradually raise the gasoline tax to levels similar to those in Western Europe, where fuel-efficient cars are the norm. N. Gregory Mankiw — the Harvard economist who advises Mr. Romney and is a fellow contributor to the Economic View column — has long advocated such a policy. I agree with him, as do most other economists."

I wonder (if) why most economists agree that we should raise the gasoline tax? So we can reduce our use? Or does the middle class just need more taxes?

And here is the tell:

"Richard H. Thaler is a professor of economics and behavioral science at the Booth School of Business at the University of Chicago. He has informally advised the Obama administration."

Yet another Chicagoan on "the team".

While Europe and possibly Obama's America raise gas prices through higher taxes, many developing nations continue to sell gasoline for less than it costs, even a country like Iran which has limited refining and must import gasoline subsidizes fuel sales.
Mexico does the same and some Americans are slipping across the border to fill up their cars with tax free petrol.

The Liberals GOP Twin wrote:

OmniScience wrote: When Bush was in office he was manipulating the global oil market to benefit his big oil buddies. That's fact. I know, liberals told me so. Now, people are saying our President has no control over global markets and gas prices? Imagine that.

http://www.thegatewaypundit.com/2012/02/video-flashback-obama-and-dems-blast-bush-for-gas-prices-in-2008/

Did you read the entire article? Bush's non-effect on the market was discussed in detail. The article is about if the president can really effect oil prices, not who blamed who for the prices. It was a non-partisan insight into oil prices and you are simply doing the same thing the left does, and you comment does not influence or address the real problem.

Your answer is the problem.

That was sarcasm, hence the purple. However, maybe you should read this article from your source, the NY Times.

http://www.nytimes.com/2006/05/10/washington/10poll.html?pagewanted=all

Sharp disapproval of President Bush's handling of gasoline prices

The two biggest problems for Mr. Bush and Republicans are gasoline prices and Iraq. By 57 percent to 11 percent, respondents said they trusted Democrats more than Republicans to find a way to curb gasoline prices.

So, in May of 2006, the NY Times suggested that the President wasn't doing enough to 'curb' gas prices. Now, the NY Times says that the President has no control over prices?
Sorry, twin, my answer isn't the problem, the NY Times is the problem.

Personally, I believe U.S. Presidents have little control over global commodities markets. And oil in particular is driven less by supply and demand than most people think. I do believe that increasing the margin requirements on speculation would be a good place to start. The Wall Street folks take little risk in oil speculation because the margins are so low. Last year house bill 2328 was introduced to address this issue, but I never did hear what happened to it.
There are many things/events that influence the global markets, but few things that a President can do to directly influence them.

Science Chic wrote:

PrintSmith wrote: The price of any commodity goes up or down depending upon the ability of the market to supply the demand for that commodity.

It would if it were actually the case that free market determines the price of oil, but it doesn't. Prices are artificially controlled thanks to government subsidies, and stockpiling of the item, and by stock markets freaking out and inflating the prices on unsubstantiated fears. So while you're statement

What will lower the cost of oil is increasing the proven reserves of the commodity compared to the demand for the commodity.

might be true for free market items, it is not the case for this item as the easily reached reserves are proven to be becoming more scarce and the more expensive, dirtier, harder to tap reserves will only cause prices to go up, regardless of amount on the market.

Tell me what effect Iran threatening to close the strait would have on the price of oil if there existed a means to replace that supply instead of having to suffer through the disruption of the supply that would occur if the straits are closed by Iran. I've got an answer for you - none. Being able to replace that supply easily would take the sting out of the threat, which would mean that only those oil producing countries that rely on the strait to get their product to market would be affected, the rest of the world would still get their oil whether the strait was open or closed. Having that ability would also lower the cost of the commodity overall because it would mean the supply was far in excess of the demand and easily able to meet the demand. Oil producing companies would be looking for buyers and using price to attract them away from other producers, resulting in an overall lower price. The threat of cutting back on supply would be insufficient to have the desired affect either. Who cares is Saudi Arabia cuts their production in half if Mexico is willing to replace that supply? No one, that's who. The problem gets to be when Mexico can't replace that supply because they can't increase the volume being transported, because they haven't built the pipeline to serve the wells they didn't drill. They know there is oil down there mind you, they have just decided not to do anything to establish how much there is precisely or to prepare it for sale in the market. Thus, the market is kept guessing at how long the supply can be met, which raises the cost, and we get the additional benefit of guessing whether the supply will be interrupted by world affairs, which drives it up a little more. Brilliant plan to keep the market stable, don't you think? The president agrees that it is. He's even gone a step further and driven up the cost of getting to the oil by coming up with a whole new set of regulations that must be complied with that has to be factored into the equation of whether or not it's even worth taking a risk drilling the well to begin with and going one step beyond that and saying that, unlike every other business around, you shouldn't be able to deduct the cost of your raw materials from your balance sheet before figuring out how much you owe in taxes anymore. Oh yeah, none of that combined won't have any effect on the total price - Cass Sunstein's co-author has told us that it won't, right?

Of course the President could also propose incentives to increase non-oil energy consumption and production to reduce the reliance on global oil markets. Oh wait, he did, but the Republicans blocked those initiatives. He could propose regs that would decrease the consumption of oil, but wait, he did, but the Republicans blocked those regs. The Republicans only want reliance on oil related energy, thus requiring participation in the global market.

Something the Dog Said wrote: The Republicans only want reliance on oil related energy, thus requiring participation in the global market.

What a complete crock.

That's like saying the Democrats only want inefficient 'green' energy sources that require massive government subsidies and end in failed initiatives (Solyndra).

OmniScience wrote:

Something the Dog Said wrote: The Republicans only want reliance on oil related energy, thus requiring participation in the global market.

What a complete crock.

That's like saying the Democrats only want inefficient 'green' energy sources that require massive government subsidies and end in failed initiatives (Solyndra).

So what iniatives have the Republicans offered to lower dependence on oil-related energy? Other than government subsidies in the billions for the oil companies that are reaping record profits?

Something the Dog Said wrote: Of course the President could also propose incentives to increase non-oil energy consumption and production to reduce the reliance on global oil markets. Oh wait, he did, but the Republicans blocked those initiatives. He could propose regs that would decrease the consumption of oil, but wait, he did, but the Republicans blocked those regs. The Republicans only want reliance on oil related energy, thus requiring participation in the global market.

And what do you propose is a self-sustaining alternative? Self-sustaining includes economic viability. And before you answer, just as a reference, I worked in a alternative energy research facility for 15 years, so I have some idea of the state of renewable technologies. And I would be the first to say that renewables have a future in this country, a future in the world, but were are not there yet.

And we can't just spend our way to self-sustainability in renewables. It seems that some people think that renewables are a magic bullet, poised and ready to defeat big bad oil. Well it's not. A quick review of the last year, and the failed ventures in private renewable industries, artificially propped up with stimulus money courtesy of the DOE, should be a wake up call for the greens who barrel ahead with no understanding of the state of the technology.

So... what is your solution?

I propose, as has President Obama, an all of the above solution rather than the singular focus on drill baby drill., While the haters rant about his energy policy, under his watch domestic oil production is at the highest level in recent years, natural gas production is at a record high, he has made 75% of offshore oil and gas fields available for leasing, oil imports are at the lowest level in 16 years, the first nuclear plants in recent years have started construction, he has increased the standards for fuel efficiency to reduce oil dependency and other initiatives to reduce our dependency on the global oil market. Yet all we hear from Republicans is drill baby drill.

I honestly don't have a problem with the Administration making reasonable efforts to reduce America's dependence on fossil fuels. What I do have a problem with is the idea that the BEST way to make alternate forms of energy affordable and viable is by raising taxes on gas and diesel.

The people these taxes hurt the most are the people who can least afford to spend the extra money because they are already having a hard time making ends meet and they need the fuel to do or get to their work.

Where's the compassion?