The wrong way to argue about gas prices

Updated
 

President Obama was in Miami yesterday talking about gas prices, making a pitch for an “all-of-the-above” energy policy that would rely on oil production, alternative energy, and improved fuel-efficiency standards. Anticipating the Republican response, Obama added, “Anybody who tells you we can drill our way out of this problem doesn’t know what they’re talking about, or just isn’t telling you the truth.”

If an “all-of-the-above” policy sounds vaguely familiar, there’s a good reason: as recently as 2008, it’s what Republicans said they wanted, too. But like health care mandates, cap and trade, the DREAM Act, the payroll tax cut, and contraception coverage, the GOP is now against what they were for a few years ago.

Regardless, Republicans aren’t just demanding expansive drilling. They’re also pushing a talking point that’s quickly become ubiquitous on the right.

“The president would like everyone to forget that gas prices have doubled over the past three years while he consistently blocked and slowed the production of American-made energy,” a spokesman for House Speaker John A. Boehner, Brendan Buck, said in a statement.

The second part of this is just silly; oil production has increased every year under Obama’s presidency, and is now higher than it was at any point in Bush’s second term. But it’s the first part that’s important.

At first blush, the GOP line may seem compelling. Indeed, at a certain level it’s just a matter of arithmetic – either the price has doubled or it hasn’t.

But for those who care about context and a more thorough understanding of the situation, the relevant details make all the difference.

It’s true that when President Obama took office, gas cost about $1.81 a gallon, roughly half of where it is now. The price had fallen sharply in late 2008 for a very good reason: there was a global economic catastrophe. GOP officials may not understand this – or they may chose not to – but gas was cheap because the economy had fallen off a cliff. As the economy improved, demand went up, and the price of gas started climbing. It’s Economics 101.

As Matt Yglesias explained yesterday, “It turns out that driving to work, ferrying stuff from the warehouse to the store, hauling containers across the Pacific Ocean, and flying around to meetings all takes oil. If you manage to orchestrate a situation in which millions of people lose their jobs, retail sales plummet, stores close, and economic activity generally grinds to a halt, this frees up a lot of extra oil. Cheap oil leads to cheap gasoline, so if you did have a job at the depths of the recession your commute got cheap. And good for you. But this should all serve as a reminder that there’s little constructive action the American government can take to lower the price of gasoline.”

This may seem unsatisfying, and it may make Republican talking points appear ridiculous, but reality in this area is stubborn.

The wrong way to argue about gas prices

Updated