The editor’s opinion from Marketplace, Northeast Wisconsin’s business magazine. (Obligatory disclaimer: Most hyperlinks go to outside sites, and we’re not responsible for their content. And like fresh watermelon, peaches, pineapple, grapefruit, tomatoes and sweet corn, hyperlinks can go bad after a while.)

June 19, 2008

How to beat Democrats in November

At last, Republicans may have figured out a way to beat Democrats in November:

Focus on gas prices. (Or, as Investors Business Daily calls it, make the initials GOP stand for "Get Our Petroleum.")

The $3.949 that as of today appears on gas station signs in the Fox Cities, more so than any economic slowdown, is what voters will focus on in November. For most consumers, I think the biggest issue they face is not economic uncertainty with their jobs, it is how much gas prices affecting their lives, in that not only are gas prices making driving more expensive, they are making most things we buy more expensive.

It is true, as noted here before, that two major contributors to high oil prices are increased worldwide demand and the weakened dollar. But our current policies of drilling nowhere that we’re not drilling now within our borders are making things worse.

President Bush Wednesday threw the issue back in the hands of the Democratic-controlled Congress by pushing Congress to approve drilling offshore and in the Arctic National Wildlife Reserve, moving on development of oil shale, and allowing easier expansion of existing oil refineries.

“I know the Democratic leaders have opposed some of these policies in the past,” said Bush, who added that if Congress heads to their July 4 recess without taking action, Congress will need to explain why “$4 a gallon gasoline is not enough incentive for them to act. And Americans will rightly ask how high gas prices have to rise before the Democratic-controlled Congress will do something about it.”

One of those Democrats controlling Congress is U.S. Rep. Steve Kagen, M.D. (D–Appleton), who is getting hammered, and rightly so, by his Republican opponent, John Gard, for Kagen’s unusual combination of futile gestures and let-them-eat-cake attitude.

Kagen has been a complete dunce on the subject of high gas prices, and in ways that his more-conservative-than-he-is constituents probably are having trouble understanding. Just this year, he has (1) commanded Bush to stop making Strategic Petroleum Reserve purchases, something that, now that SPR purchases have stopped, has had zero apparent effect on gas prices; (2) got the House of Representatives to sign on to his idea to solve the gas price problem by suing OPEC, a truly moronic proposal; and (3) brought in Rep. Collin Peterson (D–Minnesota), chair of the House Agriculture Committee, to deliver the Jimmy Carteresque news that “We needed these higher prices to force us to change our ways.”

(Embarrassingly for Kagen, however, Peterson then departed from the Kagen hymnal by saying, “I’m for drilling, I’m for nuclear, I’m for coal, whatever it takes to get us out of the Middle East.” Evidently no one briefed Peterson on Kagen’s insight that the U.S. must “have an energy policy other than drill-and-burn.”)

This is all ironic given that Democrats tried to defeat Bush on gas prices in 2004, saying that Bush’s tax cuts were being sucked up by gas prices that had jumped over $2 a gallon earlier that year, and promised to do something about gas prices during the 2006 campaign. Well, Democrats certainly done something — since Democrats took over control of Congress in January 2007, gas prices have now increased 75 percent, and gas price increases may not be finished.

This issue is a winner for Republicans who take advantage of this issue. The Weekly Standard’s Fred Barnes points out that only 20 percent of voters surveyed in a Gallup Poll blame the oil companies for high prices (the Democrats’ standard campaign line), and 57 percent of those surveyed now favor drilling where drilling is not permitted. (I wonder what the result of that specific poll question would be in Wisconsin, where new drilling is banned under state law.)

John McCain is mostly right about energy, advocating drilling offshore and expanding refineries and use of nuclear power. (The phrase “nuclear power” appears nowhere on Kagen’s campaign site, which is pretty remarkable given that a nuclear power plant sits in his congressional district.) Barack Obama, to no one’s surprise, is almost completely wrong, focusing on policies that are guaranteed to make energy even more expensive and even more scarce, apparently kowtowing to his environmental buddies like Al Gore, user of enough energy at his house to power 19 average homes.

McCain, Obama and Kagen are wrong in thinking most voters care about climate change in an era where $50 won’t fill up your gas tank. A recent Wall Street Journal/NBC News poll places the percentage of voters who see energy and gas prices as their top issue at 18 percent, with the environment and global warming at 4 percent. Moreover, alternative energy, such as solar and wind power, that every candidate seems to tout will have zero effect on oil prices seeing as how oil isn’t used for electricity generation and fuel oil is decreasingly used for heating. (Electricity is obviously used for charging batteries, but the technology isn’t there to make electric cars feasible for actual families, and don’t hold your breath that will be anytime soon. In fact, there is alarming evidence that the real energy crisis isn’t in oil, it’s in electricity.)

For those who are concerned with the environment, it should be noted that hurricanes Katrina and Rita, which roared through the Gulf of Mexico and its oil rigs, produced not one single oil spill. Environmental regulations on oil drilling are much more stringent in the U.S. than they are in the Middle East. (And, in fact, the environmentalist left now finds itself having to rethink its knee-jerk opposition to offshore drilling.)

U.S. News and World Report’s James Pethokoulis advocates a new seven-step approach for McCain that is likely to resonate with voters far more than Obama’s and Democrats’ blame-America-first view of energy. (You may not know, for instance, that in the 35 years since the first energy crisis, U.S. consumption of oil has increased just 15 percent.) It is either na├»ve or ignorant to believe that the U.S. will ever get to a point where energy consumption will decrease from one year to the next — unless the economy stops growing, that is, and suggesting that the economy needs to shrink isn’t likely to be a winning assertion for Democrats.

Bush’s proposals are predicted to take several years to affect gas prices. I’m not sure that’s necessarily the case, though. If the world oil markets, speculators in which are partially blamed for high oil prices, get the signal that the U.S. is prepared to add supply on its own independent of OPEC, that could in fact deflate prices to some extent short-term.

Whether or not there is a short-term effect on gas prices, and whether or not energy independence is actually an achievable or desirable goal, if the Republicans actually want to win races this November, their winning issue is at the corner gas station.

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