$4 Gas Returns as More Americans Face Poverty

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San Diego gas prices have climbed over $4 per gallon. Prices have risen from $3.56 in December to the current $4.01 per GasBuddy.com. This price is slightly down from a week ago, but uncertainty exists as this year has been very quiet in regard to summer storms. All this is occurring while 80% of Americans face poverty (by 2030 per AP) and the U.S. economy deteriorates.

(note: the 80% is "if current trends continue" which they never do.)

Click Here for Interactive Chart

High gas prices aren't a sexy topic anymore. Since George W. Bush has left office, the national news seldom reports the high gas prices so here is the information. South Carolina has the lowest prices in the country at $3.281, the national average today is $3.645 and Hawaii leads prices at $4.335. Crude oil prices have dropped over $5 per barrel since hitting $108 on July 19, and currently are holding around $103 per barrel.

San Diego Residents can find slight relief by examining this map of prices by area zip codes.

Click Here for Interactive Map

The President refuses to open up key oil pipelines from Canada, the administration hinders domestic oil production in favor of expensive green energy, ObamaCare is stifling employment and Dodd-Frank is hindering the financial sectors. Still, "Progressives" misdirect blame to Republicans for the economic collapse of 2008, despite the fact Democrats took control of Congress in 2007 and began a war on the economy.

Lets review how high gas prices affect the economy.

In 2007 the real estate market was weak. The housing market had inflated to the maximum through government programs which created a market for people who could not actually afford homes. These people struggled under their new inflated mortgages but other aspects of the Bush economy looked pretty good. The national media was on an economic fear campaign driven by Democrat talking points for the 2006 mid-term election and the housing bubble was obvious but the mechanism to pop the housing bubble was not clear.

The Democratic victory in the 2006 congressional elections signaled a lot to the U.S. economy. President Bush could maybe veto some insanity, but business was put on notice. Green Energy to fight the mythical scourge of global warming, minimum wage cost increases to price more consumers out of the job market, increased taxes to support government dependency spending, irresponsible handling of U.S. debt and more threatened the private economy.

The biggest threat to the economy was the fact that it had been stumbling but like a tired yet tough fighter it remained on its feet. Still, the Democrats had controlled the political narrative with outright lies and prevailed. If a new political genie had been released, some of the dumbest politicians in the country had wishes to be fulfilled. What would be next?!? Uncertainty is the biggest threat to an economy.

Immediately, the 2007 congress restricted business lobbyists, increased minimum wages, increased taxes and, in June, H.R. 6  began an global warming inspired assault on the energy sector:

Motion to Concur in the Amendment of the House to the Amendment of the Senate to the Text of H.R. 6, with an Amendment; A bill to reduce our Nation's dependency on foreign oil by investing in clean, renewable, and alternative energy resources, promoting new emerging energy technologies, developing greater efficiency, and creating a Strategic Energy Efficiency and Renewables Reserve to invest in alternative energy, and for other purposes.

 Bayh Amdt. No. 1508; To provide for the publication and implementation of an action plan to reduce the quantity of oil used annually in the United States.

America had stood against the global warming alarmists, but this signaled a change in policy direction. It seemed that "Global Warming" was the political genie which would destroy the U.S. Economy. Markets faltered, gas prices increased, and consumer good's prices increased due to higher transportation costs. Average Americans could no longer afford the fuel for their vacations and the money misdirected towards gasoline made it tougher for people to pay their unaffordable mortgages. Foreclosures formed an economic tidal wave.

In January 2007, the price of gasoline averaged $2.11 per gallon in the U.S. On February 7, 2007, the Democrats and the 110th Congress began enacting policies. Upon implementation of Democrat economic and political policy the price of gasoline skyrocketed.

By July 2008, the price of gasoline had reached $4.12 and the economy collapsed.

Since 2008 America has printed lots of money, so the value of 2013 $4 gas is significantly less than 2008 $4 gas. However, we are approaching a dangerous threshold. Adjustable rate mortgages (ARMs) come in 1, 3, 5 and 7 year terms. Since the collapse of housing prices in 2008-2009, we have seen waves of foreclosures related to these mortgages. Due to timing, a wave of 7 year ARM related mortgage defaults may be occurring now. The question is whether housing prices have increased enough to allow these people to refinance.  If not, high gas prices might be the final financial straw for many of our fellow Americans.

In the words of sarcastic teen internet meme, Thanks Obama.

Obama Responsible For Gas Prices

The proof is in the pudding. President Obama, aka Oilbama, and the Democrats are responsible for rising gas prices. Despite articles from ThinkProgress.org touting "More Drilling Won't Lower Gas Prices" and "It's Not Obama's fault that Crude Oil Prices Have Increased" there is now admission that oil supply and production via government policy does matter.

How obvious is it that oil prices, set on a world market, are all but impervious to government policies? So obvious that even Rupert Murdoch’s WSJ and the Koch-fueled Cato Institute feel compelled to make the case.

 Well, it is not obvious as Reuters is reporting that "U.S., Britain set to agree on emergency oil stocks release."

(Reuters) - Britain is poised to cooperate with the United States on a release of strategic oil stocks that is expected within months, two British sources said, in a bid to prevent fuel prices choking economic growth in a U.S. election year.

A government policy of releasing supply from the strategic petroleum reserve MUST affect world market prices. There is no reason for the Obama administration, the British government or previous U.S. administrations to release the oil reserves without such an effect. Supply does matter.

Reuters continues:

While there is no significant disruption of world oil supplies at the moment, sanctions on Iran are expected to cut its output when a European Union embargo takes effect from July.

Minor stoppages from South Sudan, Yemen and Syria also have contributed to the rise in oil prices.

"At the moment there is no need to use it," IEA executive director Maria van der Hoeven said of reserves at an industry conference in Kuwait on Wednesday.

"There is more supply coming to the market from OPEC countries. There is no price trigger for the stocks release, the trigger is a disruption in physical supplies."

"There is no real supply disruption, this is just price management", said Olivier Jakob from Vienna-based consultancy Petromatrix

(...)

While the U.S. release would be of crude oil from the national SPR, the UK contribution is likely to come from a reduction of the minimum reserves of crude and refined products that UK commercial oil companies are required to hold.

The United States has sold crude oil directly from the 700-million barrel SPR only a handful of times, almost always in conjunction with the IEA.

In addition, the U.S. Department of Energy has arranged unilateral short-term loans from the reserve about a dozen times since it was filled in the 1980s, typically in much smaller amounts.

"Simple deduction, my dear Dr. Watson."

Hat tip: Fellow SLOB Lipstick Underground

More Information

W.C Varones "Obama to plunder Strategic Petroleum Reserve to boost re-election" observes:

Gee, that would create a temporary dip in gas prices right around... oh, what's happening this fall anyway? 

Blog.Heritage.org has more detail on "How the Strategic Petroleum Reserve Affect Gas Prices"

The U.S. House of Representatives: "Obama Administration Spins U.S. Oil Production Numbers, Takes Credit for Predecessors’ Pro-Energy Policies"

Enews: "Production on federal tracts fell in 2011"

Institute for Energy Research: "IER Analysis: Oil and Gas Production Declines on Federal Lands in FY2011
Oil"

OilBama Hurting the Poor

Gas prices are causing major problems for Barack Hussein Obama.

Tonight my wife and I went to the movies to see Project X, (it was fun). By coincidence, it happened to be during the San Diego Latino Film Festival. We took time looking at all the various displays and my wife won a t-shirt.

A large diet Pepsi at the theater cost me $5.26. Snark required the comment, "I could have almost bought a gallon of gas!" The ethnic young man behind the counter chuckled and added, "I want to go back a couple of years when it was like $2."

I know my fellow bloggers are aghast at the use of the term "like" but let's focus on the issue. This young man is exactly in President Obama's target group: young, poor, ethnic and now angry. Unfortunately, he happens to be angry at President Obama.

Add the young working poor, who face 3% inflation (minus energy and food prices), to the growing list of groups at odds with progressives.

The list also includes Catholics, who run charities, schools, adoption agencies and hospitals.

The War on Catholics accelerated as the State Department announced that The Vatican is a money laundering scheme. The Obama administration is unhappy with recent push back from the Pope on ObamaCare abortion coverage mandates. The administration is attempting to coerce bishops into backing the administration over the Pope. The tactic in this battle against Catholics is Alinsky rule #12:

RULE 12: Pick the target, freeze it, personalize it, and polarize it." Cut off the support network and isolate the target from sympathy. Go after people and not institutions; people hurt faster than institutions. (This is cruel, but very effective. Direct, personalized criticism and ridicule works.)

The War on Catholics has a major upside for the Obama reelection effort. By attacking the Pope, someone somewhere will equate Obama with the Antichrist. If the administration is lucky, a Rick Santorum supporter will make the statement. A talk radio host would be a big catch, but it seems unlikely at this moment. Even if it is a random citizen caught by a progressive camera, it will be used to slander everyone who opposes Barack Obama and keep focus off of the economy.

Additional SLOBs discussing gas prices:
Lipstick Underground: Environmentalists Hate Poor People*
The Liberator Today: The Price of Gasoline and Obama
Beers with Demo: Say, can we just forget about what I said earlier?