HALF FULL REPORT 02/24/12

The average price of regular gasoline in February was $3.61 — 42 cents more than at this time a year ago — and an all time record for this time of year.  Gas prices have hit $5 a gallon in some stations in Florida and Washington, D.C., and are nearing $5 in Chicago and California.  Typically, the price of gasoline rises substantially between March and June, so many more of us could be paying $5 a gallon by Memorial Day.

That, coupled with high unemployment and stagnant wages for most who have jobs, means most Americans will be getting squeezed.  To pay more for fuel, we’ll have to cut back how much we drive, or on other things. Americans used 344 million gallons of gas per day last week, down from an average of 390 million gallons per day in 2007.  We drove about 100 million miles fewer than in 2007.  Either way, our moribund economic "recovery" will suffer another blow.

The news media, of course, didn’t focus on that.  "Higher gas prices cloud Obama’s re-election hopes," said the Associated Press Thursday.

WASHINGTON (AP) – Soaring gasoline prices are threatening to undercut President Barack Obama’s re-election prospects and offering Republicans an easy target. With prices pushing $4 a gallon and threatening to go even higher, Obama sought Thursday to confront rising public anxiety and strike back at his GOP critics.

"Only in politics do people root for bad news, do they greet bad news so enthusiastically," Obama said of Republicans. "You pay more; they’re licking their chops."

A poll for ABC News last April found the president’s job approval rating was 13 points lower among Americans who said the price of gas is causing them hardship.
 
It’s not unusual for the president to take the heat when gas prices rise: George W. Bush’s job approval rating correlated with the price of gasoline across his two terms at -.84, a very strong relationship. Obama’s approval rating has correlated with the price of gas at -.71.

Aware of the political threat, Mr. Obama made a major speech on energy policy at the University of Miami, in which he lied even more than usual.  It isn’t his fault gas prices are higher.  Blame the Iranians…and the Republicans. 

Zero took credit for a recent increase in oil production, which "couldn’t be farther from the truth," said the president of the American Petroleum Institute.   But more drilling for oil and natural gas can’t solve the problem, Obama said.  Drill drill drill is just a bumper sticker.  There is no short term solution.  The long term solution is to double down on government "investments" in alternative sources of energy.

Iran’s political brinkmanship is partly to blame for the oil price spike.  But most of it’s been caused by the policies of the Obama administration.  They’re leading to an "energy abyss," oil company executives say.

What those executives have in mind are the many restrictions the administration has placed on drilling for oil and natural gas, and EPA regulations which clobber the coal industry.  But his overall fiscal recklessness may be just as much to blame.

Gasoline prices only seem to be rising.  What’s actually happening is that the value of the dollar is plummeting.  Louis Woodhill notes that measured in gold, the price of oil per barrel today is 18 percent lower than the average for the last 41 years.

It was 41 years ago that President Nixon took us off the modified gold standard in the Bretton Woods financial arrangement.  In 1971, West Texas crude was selling for $3.56 per barrel.  This week, it was selling for $105.88 per barrel.

The primary reasons for the massive devaluation of the dollar since 1971 have been massive federal budget deficits, and (especially) monetizing the debt by the Federal Reserve.

It ought not surprise anyone with a knowledge of history that the present Obama-Bernanke fiscal-monetary course is exactly opposite the policies of President Reagan and Federal Reserve Chairman Volcker in the early 1980s, with predictably very different results.  So we now have inflation coupled with low economic growth, or stagflation.  Welcome back, Carter.

Whether you place more of the blame for high gas prices on the Obama administration’s restrictions on energy production or on his reckless spending, the high prices are primarily the result of Democrat policies, and they are deliberate.  Democrats want high energy prices to make their alternative energy and mass transit boondoggles seem less outrageously expensive.  Steven Chu, now the Energy Secretary, let the cat out of the bag in a 2008 interview with the Wall Street Journal:

Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.

Republicans, understandably, have jumped on that Chu quote.  But so has the left wing Webzine Politico, because Politico thinks Chu had it exactly right.

Walter Russell Mead doesn’t. The quote devastatingly reveals just how tone-deaf and myopic white-collar, progressive intellectualism can be. The delusion that jacking up energy prices is part of a "good government" agenda is one of the pieces of insanity that keeps the blue intelligentsia from consolidating its position as a natural governing class.

Politico thinks Democrats should openly advocate high energy prices.  Mr. Mead explains why they don’t:

If you are a politician who wants to raise the price of gas, you have two choices in America: you can persuade the military leadership to install you in office through a coup d’etat, or you can lie to the voters and pursue your agenda on the sly.

A number of Democrats seem to have chosen the second option. The significance of the Chu sound bite is that some voters think President Obama has a stealth energy agenda, and rising gas prices tend to strengthen that perception.

The president deserves the blame for higher energy prices.  But even if he didn’t, the Wall Street Journal thinks that if voters hold him responsible, "rough justice" will have been administered:

Mr. Obama has also spent three years blaming George W. Bush for every economic ill. If Mr. Obama now feels frustrated by economic events beyond his control, perhaps he should call Mr. Bush for consolation.

When gasoline prices rose to $3 a gallon in 2005, Debbie Dimwit, now the national chair of the Democratic National Committee, excoriated President Bush.  She’s been strangely silent now.

In this video, Newt Gingrich describes what a sound energy policy would look like. You can read a transcript of his remarks here.

If the Occupy Wall Street crowd really wanted to go after the richest one percent, they’d set up shop in Washington D.C.

MSN Money profiled recently the 15 wealthiest counties in the United States, where median household income is roughly double the national average of $49,445.  Ten, including the top three, are in the D.C. suburbs and exurbs in Maryland and Virginia.  Only one (Douglas County, Colorado) is west of the Appalachians.

Gen. Martin Dempsey, the Chairman of the Joint Chiefs of Staff, recently described the mullahs in Iran as "rational actors," and opined that an Israeli attack on Iran’s nuclear program would be "destabilizing."  Michael Ledeen respecfully demurs:

When the Iranians chant "death to America!" just what do you think they mean?

Your public remarks seem to me to be poorly reasoned and aimed at the wrong audience. If we are worried about violence, our warnings should be aimed at the terrorists and their masters in Damascus and Tehran, not at their intended victims in Jerusalem and Tel Aviv.

Sharia has come to Pennsylvania.  The Pennsylvania state director of American Atheists dressed up as "Zombie Muhammad" for a parade last Halloween.  This annoyed Talag Elboyomi, a Muslim immigrant, who assaulted him.

The case was open and shut.  There was a video of the assault, and Elboyomi admitted he did it.  But Magistrate Mark Martin, a Muslim convert himself, dismissed the charges.  The First Amendment, Judge Martin ruled, does not permit anyone "to piss off other people and other cultures.  He then called the victim a "dufus," and lectured the victim on the fine points of Islam.

In 27 years of trying and analyzing legal cases, this performance is as shocking and disgraceful as anything I’ve ever seen from an American trial judge, said Andy McCarthy of National Review.

Maryland will be the 8th state, and the first south of the Mason-Dixon line, to legalize gay marriage:

Despite one of the largest Democratic majorities in any state legislature, backers of gay marriage in Maryland had to overcome fierce opposition from blocks of African American lawmakers and those with strong Catholic and evangelical views to cobble together coalitions big enough to pass both chambers.

The others are Massachusetts, Connecticut, Vermont, New Hampshire, New York and Iowa.  The District of Columbia also issues marriage licenses to gay couples.

Californians voted against gay marriage in a referendum, but the political establishment is pushing forward.  To make sure gays and lesbians are adequately represented on the judicial bench, the state is requiring judges to reveal their sexual orientation.

Joblessness and student loan debt are stunting an entire generation.  Roughly 25 million young adults live with their parents because they have no job, or the job they have doesn’t pay much.  Among young people aged 18 to 24, 57 percent of men and 49 percent of women live with Mom and Dad.  So do nearly 20 percent of men aged 25-34.

Less than 10 percent of women aged 25-34 live with their parents.

During the Obama administration, the percentage of men aged 25-34 living with their parents has increased significantly, but the number of women in that age bracket who live at home has declined slightly.

Meanwhile, the proportion of Americans who have a college degree has hit an historic high.  Too bad so many of those expensive degrees are worthless. Census data show that an associate’s degree in engineering or computers is worth as much or more, on average, than a bachelor’s in education or the liberal arts.

I cut short the segment on energy with which the HFR began before I’d said all I wanted to say, so I’m returning to it now.  Zero pledged to "double down" on government investment in "green energy."  This was good news for his corrupt political cronies, bad news for the rest of us.

Solyndra is the poster child for green pork.  The bankrupt company is leaving behind an environmental mess, but senior executives are getting a big payday.

Another heavily subsidized green company is laying off workers, but giving big bonuses to top executives.

Zero’s favorite envirocar, the heavily subsidized, but unpopular, unprofitable and unsafe Chevy Volt, didn’t make the list of "greenest vehicles for 2012."

Perhaps because these "green" investments have been such busts, Obama touted another, algae, as a source of oil to replace petroleum.  Charles Krauthammer was impressed.  Andrew Malcolm wasn’t.  Oil from algae could replace 17 percent of the petroleum we use for transportation, the president said.  A British scientist explains here why that can’t possibly happen.  Which may be just as well.  The algae jet fuel Zero is buying for the Navy costs $26 a gallon.

A rising star in GOP politics is New Mexico Gov. Susanah Martinez.  National Review profiles her here.  But she has her problems.  Her hair stylist has threatened to stop cutting her hair unless she drops her opposition to gay marriage.

Another young conservative to keep your eye on is Virginia Attorney General Ken Cuccinelli.  He took Massachusetts AG Martha Coakley to school on the individual mandate on Obamacare in a debate at the National Press Club.

If you thought that all journalists are shallow, biased, arrogant Obama toadies, my feelings would be hurt.  So my heroes of the week are two Washington journalists who still think their job is to cover the news, not to cover for the Democrats.

One is ABC White House correspondent Jake Tapper, who confronted Press Secretary Jay Carney over the fact that the administration "has been aggressively trying to stop aggressive journalism."  Watch the video.  It’s priceless.

The other is Sharyl Atkisson of CBS, who is doggedly pursuing the Gunwalker scandal even though the suits at the network don’t want her to.  Her latest scoop was this week.

I’m running out of space and time, so that’s the HFR for this week.  With the debt mounting and the GOP candidates squabbling over trivia, I’m inclined to think the glass is more half empty. The Iron Chancellor, Otto von Bismarck, said once that: "God has special provenance for fools, drunkards, and Americans."  I hope he’s right.

See you next week.

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