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Gas Pricing for Votes

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There has been much discussion of gasoline prices lately and the American right wing is crowing loudly about how this justifies the maintenance of Bush Administration economic policies.

There is only one big problem with these assertions. There isn’t much support coming from the media outside the Beltway. In fact, there is much coming out that refutes these assertions of ‘conservative economic success’.

One of the biggest problems facing those who are claiming such validation is the widespread belief that currently lower gas prices are being manipulated. 42% of respondents to a new Gallup poll agree that the Bush administration “deliberately manipulated the price of gasoline so that it would decrease before this fall’s elections.”

It isn’t just the common man in the street who is suspicious. CNN’s veteran political commentator Jack Cafferty suggested as much on August 30.

There is reason to believe that the strategy is working – at least enough for Diebold to work its magical transmogrifying vote tricks.

Americans appear willing to trade away their votes, unable to make any changes for two more years – for $10 lousy dollars per tank. This doesn’t speak well of the American people in that they can be bought off so easily by the reduction of just a few dollars in gas expenses.

Oil industry experts, however, maintain that gas prices should be dropping faster, yet in places like Wyoming, Utah, and Idaho there are experiencing higher than average gas prices despite this drop elsewhere in the nation [except for Naples, Florida!].

One Utah newspaper, the Daily Herald, insists that Gasoline price reforms needed: “How about a tax on retailers that would kick in when the retail price varies too much from wholesale?”

Such strong taxation language coming from an anti-tax, Redder-than-Red State!

Elected officials of these afflicted states are seeking to take some kind of legal action, but are finding themselves with few regulations to work with against an uncooperative and uncaring industry. Wyoming’s Gov. Freudenthal said, “The state does not have the inherent jurisdiction to investigate multi-national oil companies.”

Neither is there much to expect out of the national government, as The Kansas City Star rued in a recent editorial.

This leaves only the gasoline retailer for customers to complain to, but they protest they aren’t the ones to blame for these prices:

“If you want to find out where the problem lies just follow the money,” said Mark Walker of the Lindon [UT]-based Walker Oil. “You’ve got the retailers out here scratching and scrambling to make a nickel, while the big oil companies are making billions and posting 30 percent to 40 percent gains in their profits.”

Considering the huge record profits recently reported by oil companies, they can certainly afford a few weeks of lower prices (and profits) in the quest to ensure that the GOP retains control of the government.

The smoking gun that indicates there is some domestic political shenanigan afoot comes from these two opposing pieces of evidence. In Japan during the period that gasoline prices dropped in the US, crude oil prices were increasing.

This should normally mean that investors would be buying oil stocks expecting higher profits. Yet, instead, they were pulling their money out of energy markets.

I somehow doubt that wholesale oil prices vary that much around the world with demand being what it has been of late. In fact, the industry insiders are already talking about higher wholesale prices on the way.

Just a few days after these experts made their announcement, the news came out that an OPEC oil production cut is being discussed due to reduced demand (caused by higher prices?) in consuming countries. This is when investors normally dive in, and yet they did not despite this news which emerged just days after they had ‘bailed’.

There must be another reason, and I doubt that wholesale prices are the culprit. There is another reason that explains their anomalous response to favorable market conditions. The decreasing number of fuel suppliers in Montana is the clue:

“From 18 distributors 30 years ago, it’s now boiled down to one fairly large marketing firm – CityServiceValcon – and one small wholesaler in Whitefish,” said Dallas Herron, owner of CityServiceValcon.

By definition, a lack of meaningful competition indicates a monopoly exists. The lack of anti-monopoly enforcement against the oil industry by the Bush Administration aids the development of a situation that hasn’t been seen since the days of John D. Rockefeller’s overwhelming dominance. It is certainly in the interest of the oil industry to maintain this economic environment for as long as they can, even to the point of ‘losing’ a few billion in profits to ensure continued largess by offering voting consumers a few weeks of lower gas prices.

But like everything else the Bush Administration has diddled, nothing is simple or works as they expect without something else going wrong somewhere else. For instance, Economists say falling energy prices reflect weakening economic outlook in U.S..

For example, the economists at Wachovia Securities think the economy is slowing down. |Another analyst gets specific about the looming decline.

Pension funds in particular could be hit if the coming winter is a cold one and retired investors need their money to pay higher heating costs. But the retirees aren’t the only ones who are affected by higher energy costs: Charleston, SC-based America’s Research found that the percentage of shoppers who said they feel pressure from credit card bills doubled to 43 percent in July, from March.

That impression may hurt retailers during the coming holiday season – a point that may already have been reached.

But the effects of that condition won’t really be felt until the Bush Administration is safely past the November election. In the mean time, voters are being distracted by playing the gas price game.

In addition to higher profits allowing for a period of politically-oriented generosity toward the ruling party, there is an added benefit for Big Oil: they are running the independent gas retailer out of business. This will make it much easier for the oil companies to make even more dishonest dollars per quarter than they already have to date.

What is it that causes the wild price ride that forces the independent out of business? The availability of product from the refineries which are mostly owned by Big Oil. Supply – and prices – can swing wildly in just a few days.

For instance, on September 14, 2006, the Central Valley Business Times of California reported refineries increased their output of gasoline and diesel, yet just six days later, on September 20, 2006, the same source reported production of gasoline and diesel in California declined.

Only micromanaged price manipulation makes much sense as an explanation, as the experts say things are good for oil producers right now. If this is so, such benign global conditions do not cause the sort of price fluctuation activity that has been reported by the sources I quote above.

But political motivation to fuel the engine of continued Republican political dominance fills the tank very nicely.

To the top.

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  • http://jcb.pentex-net.com John Bambenek

    Here we are, the usual crap every time any shred of good economic news comes out. It’s all Bush’s fault gas prices are going down…

    Despite the fact that Labor Day weekend has always had the highest gas prices per year and they’ve declined sharply thereafter.

    Always.

    Every year.

    Even under Clinton.

  • JustOneMan

    “It isn’t just the common man in the street who is suspicious. CNN’s veteran political commentator Jack Cafferty”

    He also blames Bush for his fucking low ratings…

  • dee

    Doesn’t it all make sense now? This is why we saw the high gas prices a while ago, they told the companies to gauge now knowing that they would lower the prices closer to election time. Wow these guys are sneaky. Bushco told them make your money during this time; remember the record profits the execs could not justify? They were just building a nice treasure in order to do what they are doing now with the low prices. They might be losing money now but they have a nice treasure chest to tide them over until after the election. Don’t forget the poll that specifically tied lower gas prices to presidential approval ratings. Don’t think for a second that they could not have talked about this, explain all the closed door secret meetings with oil company execs at the White House. This is all just part of the bigger plan though wich is stealing the next presidential election. They already have the machines to do it in place and 80% of the voters will be using them with no paper backup. We will soon be living under a conservative Christian theocracy and that will really, really suck.

  • http://www.elitistpig.com Dave Nalle

    Good job streamlining this, Realist. Thanks for taking the trouble.

    There’s a lot here which I find questionable, but I do think you have a point on the gas price issue. Something very suspicious is going on there. I wouldn’t suggest the administration is behind it, but it does make perfect sense for the oil companies to create conditions favorable to the reelection of candidates they’ve invested in.

    Dave

  • Baronius

    Bush won in 2000. Bush won in 2004. (If I post this same comment on every board that denies it, I’ll never have time for anything else.) (Oh well, I don’t do much else anyway.)

  • http://www.roblogpolitics.blogspot.com RJ Elliott

    If Bush can control oil/gas prices, why did he let them get so high in the first place?

    Oh, wait, it’s a secret, devious, Rovian plan to turn Amerikkka into a theocratic oligarchy!

    Or, maybe it’s just supply and demand…you know, oil prices had been falling just prior to gas prices dropping…and OPEC is now openly considering a reduction of output…but I’m sure Bush is the one really in control for his assorted criminal purposes…BUSH IS HITLER!!!

  • Clavos

    Realist,

    You have a point about investors in energy futures and stocks.

    I noticed a few weeks ago that many money managers were being quoted as saying they were pulling out of oils. Thought it was anomalous at the time. Then the pump price started dropping.

    You shine an interesting new (to me, at least) light on the phenomenon.

    It does look like something is definitely afoot.

  • JR

    RJ Elliott: If Bush can control oil/gas prices, why did he let them get so high in the first place?

    Don’t be an idiot. What’s the point in lowering your prices to get sympathetic politicians elected if you can’t more than make up for it with higher prices the rest of the time? And if the Bushies were involved, they’d surely stand to share in those profits.

  • Nancy

    RJ, you & the other perpetual Bush apologists & butt-kissers are determined not to see the dirt on your idol’s feet, the blood on his hands, or the evil on his head. You’re all blind, deaf, and dumb – the perfect unquestioning followers of a blossoming Hitler wannabe. Sig heil.

  • MCH

    Nancy,

    But he is smart enough that the blood on GW’s hands will never be his…

  • http://www.roblogpolitics.blogspot.com RJ Elliott

    “Don’t be an idiot. What’s the point in lowering your prices to get sympathetic politicians elected if you can’t more than make up for it with higher prices the rest of the time? And if the Bushies were involved, they’d surely stand to share in those profits.”

    Bush is already rich. So is Cheney. So is Rumsfeld. And they have all had their assets placed into blind trusts anyway.

    So even if we pretend for a moment to dwell in Leftist Fantasyland, where a single man has the power to artificially control the price of a global commodity with a secret wave of his hand, we can STILL eliminate the motivation of greed.

    So, assuming Bushitler was capable of such control over the price of gasoline, wouldn’t it have been politically smarter to keep the price artificially LOW until after the 2006 elections? You know, rather than have a voting public that is pissed off at you for an entire year over historically-high gas prices?

    Just how far removed from reality are you moonbats?

  • JR

    RJ Elliott: Bush is already rich. So is Cheney. So is Rumsfeld.

    Oh, and rich people never want more money? Look who’s removed from reality now.

    And they have all had their assets placed into blind trusts anyway.

    When they’re out of office, they’ll be back on the payrolls of the companies they helped out while in office. Just like the people who’ve left the administration already.

    So even if we pretend for a moment to dwell in Leftist Fantasyland, where a single man has the power to artificially control the price of a global commodity with a secret wave of his hand, we can STILL eliminate the motivation of greed.

    The Bush administration is not “a single man”. Nor does it consist of only one man connected to the oil industry. Pretty fuckin’ far from it, really.

    And the administration doesn’t even need to be actively manipulating the market; all that’s needed is for the industry people to remember which side their bread is buttered on.

    You think the administration isn’t going to remind them?