Election, economy and the price of gas
By Robert Weiner and Richard Bangs
Enjoy the price of gasoline now, because when the Saudis lower production, we could go right back to the $3 nightmare of three months ago. Washington state is especially affected -- regularly in the top 10 highest, 20 cents a gallon more than the national average ($2.42/gallon vs. national average $2.22 last week).
The gas prices crushing consumers dropped 80 cents a gallon since August. President Bush said, "That's good news for the American consumer." But there is more to the price changes than meets the eye.
Something Washington Post journalist Bob Woodward said two years ago while prices were going higher sends chills: "They could go down very quickly. That's the Saudis' pledge." According to Woodward, Prince Bandar bin Sultan, Saudi Arabia's ambassador to the United States, "told President Bush that the Saudis would cut oil prices to ensure a strong economy for Election Day." This prediction has come to fruition.
U.S. oil company executives also possess the power to allow price drops for the election. They have enough room to play -- including last year's collective $100 billion in record profits and Exxon Mobil's own near record $10.6 billion profits this past quarter. Oil executives are full of fear over new leadership in a Congress that would investigate them.
They are particularly afraid of Rep. Charles Rangel chairing the Ways and Means Committee. Rangel could ask: Why do companies that generate record profits from U.S. consumers receive $7.2 billion in government subsidies? Why was U.S. Rep. Tom DeLay, R-Texas, then Republican House leader, allowed to hold open a five-minute floor vote in the House for 48 minutes until some $2.6 billion in tax breaks for the major oil companies were approved by a two-vote margin? Just this week we learned of the administration's refusal to pursue hundreds of millions in fees for offshore drilling. Why?
Those policies defy basic logic until we look at the $32 million in contributions from oil representatives given to Republican congressional and presidential campaigns and the Republican Party during the 2004 and 2006 elections (versus $7 million to Democrats), according to the Center for Responsive Politics.
NBC News Anchor Brian Williams pointed out, "There are skeptics and cynics out there who say there's nothing to make voters happier than paying less for gasoline, and they're going to wonder: Did somebody just open a big spigot?"
An "improved" economy is a political boon to incumbent legislators. The Dow Jones high has appeared when gas prices on average dropped nearly 80 cents. It's as though the U.S. doesn't want to know why the prices are declining; we're just too happy about it to care.
The U.S. could again be frustrated when the Saudis and oil executives close the spigot after the upcoming elections. Maybe then we'll want to know why the gas prices arbitrarily fluctuate.
Robert Weiner was a senior public affairs director in the Clinton White House and spokesman for the U.S. House Government Operations Committee. Richard Bangs is a senior policy analyst at Robert Weiner Associates, weinerpublic.com.