Can a President Affect Gas Prices? Yes, But Only One Way.

By Michael Bryan

So, this is a meme now:

In case you can't see this image for some reason, it expresses shock at how, in 2006, three-quarters of Democrats thought Bush affected oil prices, yet, in 2012, only one-third of Democrats think Obama is doing so. So, for the GOP who don't seem to get how this could possibly be consistent, let me explain.

There is one way a President can have a major effect on the price of gas: start some wars in the Middle East. You can be sure that the resulting uncertainty about future oil supply security in the region will cause prices to rise by much more than is entirely rational.

Bush happened to start a stupid, unneccessary war right smack in the middle of the Middle East. Thus, Democrats – rightly – thought that high gas prices at the time were affected by Bush's fuckwitted policies. 

Now, Obama has wound down that stupid war in Iraq, and has us on a glidepath to ending the arguably neccessary one in Afghanistan. However, gas prices remain high for a number of reasons, a major one being the escalating tensions with Iran (which GOPs love, BTW, and Romney would further escalate recklessly). So gas prices are again high.

So the question is, can Obama bring those prices down substantially? Not really. He could try to ratchet down tensions in the Middle East, but he can hardly control the perception that conflict with Iran could result in major distruptions to the oil supply, unless he tells the world there is no way in hell we're going to war with Iran, which he feels he can't do – and would be crucified for doing by the GOP, in any case. Thus, Obama has little control over the price of oil, because it is not primarily his actions that are causing the concerns which keep speculation in the price of oil percolating. Thus, Democrats mainly feel that the President can't do much to affect the price of oil.

Really, was that so hard to figure out? Presidents can have a major effect on the price of oil, but only in a bad way. Thus, Bush's policies did raise the cost of gas, but Obama hasn't much ability to lower it, and isn't really doing anything truly stupid to increase prices. No hypocrisy here; just reality.

To be fair, Obama might be able to change the law back so that only actual end-users, who are going to make something out of it, could buy crude oil, instead of allowing purchases by speculating commodity traders who just want to manipulate the market to make a killing and never take delivery. That would remove much of the speculative investment in futures that makes the market so sensitive to security fears. But I doubt Obama would get any cooperation on the subject from a Congress so focused on thwarting anything that might help Obama.

Who made the stupid change in the law allowing hedge funds and other financial idiot-savants - who are now holding your SUV hostage - to dick around with our oil prices you might ask? Thank President George H.W. Bush, Senator Phil Gramm, and his wife and Chairwoman of the CFTC, Wendy Gramm, who pushed through dereg of the oil market as a favor to Enron and Koch Industries (whom she immediately took a job lobbying for… ); i.e. the 1% and their handmaidens.

Of course, both parties have some culpability here: Clinton signed an additional massive oil dereg bill, the Commodities Futures Modernization Act, just before leaving office. It was written by lobbyists from Enron and Goldman Sachs, so you know it had to have been good for the country, right? Well, it was the origin of credit default swaps that gifted us with our current economic melt-down, in addition to removing the final stops preventing full-on casino gambling on oil prices. So, you know what? Fuck Billy, too.