02.21.2012 16

Obama says high oil prices evidence of improving economy

High Gas PricesBy Bill Wilson — Obama thinks the current run up in gas prices is a good sign, evidence that the economy is improving. Except, in 2011, the global economy slowed down while oil and gas prices were rising along with a broad range of other commodities including gold even while domestic consumption was declining. Additionally, just last month, the International Energy Agency has cut its projections of the growth of global oil demand for 2012, and Saudi Arabia is once again lowering its production this year. With oil traded in dollars, that all indicates inflationary pressures and a weak dollar are moving prices, not increased demand.

In addition, last year, another part of the run-up in prices was the Libyan crisis. This year, the Iranian crisis is in effect, with the U.S. and Europe placing de facto embargos on Iranian oil exports. This too has an effect.

Then there is the domestic regulatory environment that makes these price spikes all the more acute here in the U.S. The nation’s refining capacity is declining along with continued restrictions on domestic oil production. We simply lack the domestic capacity to increase output when we experience these price shocks. In fact, we have declined from producing 9.6 million barrels of oil a day in 1970 to little more than 5.5 million a day now.

Overall, these huge run-ups in oil and gas prices are not good for the economy. They did not work well in the 1970’s and again in 2008, when the roof blew off the economy. They always lead directly to increased producer and consumer prices, both of which take money out of other parts of the economy, and are detrimental to the growth picture.

Bill Wilson is the President of Americans for Limited Government. You can follow him on Twitter at @BillWilsonALG.

  • colleenf

    What an idiot. He wouldn’t know an economic uptick if walked up to him and smacked him upside his marxist little head.

  • thsldu

    The next this dope will be trying to sell us is that if unemployment goes up the economy is improving!!!!!!  No wonder we are denied his scholastic records.

  • Are we really willing to keep ascribing to incompetence what is looking more and more like deliberate malice?

  • 1310t

    Obama, take off your rose colored glasses.  Increases in gas prices will only improve the economy for the oil companies while it will hurt everyone else.

  • Proud Texan

    He believes we are all as ignorant as he is.  He never has a conscious thought that is his own!!  He is being directed by others.  He may have an ivy league education but he isn’t smart enough to do all this by himself. 

  • FJR629

    this obama really has the gall and temerity to try and sell this stupidity to the american public.Thats like saying my car is using to much gas but it will save me money on groceries. Can the people or sheeple be so stupid to accept this lying destroyer in chief. It makes me so mad that he has the audacity of hype!.

  • Wonder Warthog

    There is another machination at work here also.  By raising and keeping gas prices high, the government is restricting your freedom to move or to travel, thereby making it much easier to “keep tabs” on you?

  • Wonder Warthog

    Even the oil companies are hurting, as are oilfield workers and their families.  This will (and has) impact(ed) the Stock Market also!  What part of “declining production” don’t you understand?
    Obama is doing this to us by refusing to allow further exploration on our own Continental Shelf, while encouraging “3rd World” economies to avail themselves of ALL RIGHTS TO DO SO!
    Should they be successful, we’ll have to buy our own oil from someone else!

  • Wonder Warthog

    Joan, EVERYTHING Hussein’s done has been (and is) geared to ruining our once-great nation.

  • BobM001

    It all falls into the CLOWARD AND PIVEN STRATEGY!

  • CADude

    Idoiocracy (aka our government) at it’s best!

  • SUSANM621


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