Bush Should Use Bully Pulpit To Push Down Gas Prices

[JABBS]

Skyrocketing gasoline prices -- pushed to record highs because of Hurricane Katrina -- could lead the U.S. into recession, economists fear.

It's time for President Bush to do now what candidate Bush said he would back in 2000 -- use the bully pulpit of the presidency to lower gas prices. The nation's economy, still in post-9/11 recovery, cannot afford a major retraction.

Most Americans probably haven't determined the ramifications of skyrocketing gas prices -- on their checkbooks, let alone on the national economy. It's up to the Bush Administration to take a proactive leadership role, before it's too late.

The AAA motor club reported Monday that the nationwide average for a gallon of gasoline was $3.05, although prices were much higher in most major metropolitan areas. That's roughly double where gas prices stood two years ago.

For a consumer filling up a 12-gallon tank twice a week, that's a price increase of about $36.50 per week, or roughly $1,900 per year. That's a hike many consumer cannot afford, which may explain why an estimated 70 percent of gas purchases are made with credit cards.

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Candidate Bush said that if he would bring down gasoline prices through sheer force of personality, by creating enough political good will with oil-producing nations that they would increase their supply of crude.

"I would work with our friends in OPEC to convince them to open up the spigot, to increase the supply," Bush told reporters at a June, 2000, campaign stop in Michigan. "Use the capital that my administration will earn, with the Kuwaitis or the Saudis, and convince them to open up the spigot. Ours is a nation that helped Kuwait and the Saudis, and you'd think we'd have the capital necessary to convince them to increase the crude supplies."

Candidate Bush suggested in 2000 that President Clinton "jawbone OPEC." It's advice he should take now.

But there is another step Bush should take -- show some cahones, and call for a "summit" with oil and gas producers, many of whom have long-time ties to the Bush family.

In 2004, the nine largest integrated oil companies made $87 billion in profit, with Exxon Mobil alone making $25 billion, according to an August report by the Congressional Research Service.

This year, Exxon Mobil reported profits jumped 32 percent to $7.6 billion in the second quarter compared to the same period in 2004. BP saw a profit increase of about 30 percent, totaling $5.6 billion in the second quarter, while Conoco Phillips earned $3.1 billion, a 55 percent increase in profits in the second quarter compared to the same period in 2004.

American consumers spent an additional $105 million per day in 2004 for gasoline compared to 2003, according to the congressional report.

While it flies in the face of capitalism to suggest a corporation should cut back on revenues, the current situation has all the makings of a national crisis.

"The extraordinary high price of fuel means that cost reduction has gone beyond urgent," Giovanni Bisignani, director-general and CEO of the International Air Transport Association, told Business Week. "Fuel -- the Fifth Horseman of the Apocalypse -- is the biggest factor forcing the structural change and efficiency our industry desperately needs."

Mark Cliffe, the global head of economics and strategy at ING in London, told the magazine that Katrina's effect "probably the most serious challenge we face to growth since the Iraq war." Consumers will have to steel themselves to the fact that gas prices aren't going to come down, he added.

High gas prices not only affect consumers at the pump. They also contribute to higher heating costs. Sen. Tom Harkin (D-IA) urged Bush to release $900 million for the Low Income Home Energy Assistance Program so needy people will be able to pay their heating bills this winter.

And higher gas prices affect the transportation industry -- air and trucking costs, for example -- which not only mean higher air ticket prices, but likely also higher costs for consumer items reliant on shipping.

The Senate Committee on Energy and Natural Resources will meet Tuesday to discuss gas prices and the global impact. Harkin spokesperson Maureen Knightly said the meeting was moved up from later in the week.

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The Bush administration has opened emergency oil stockpiles -- a step Bush has previously said he would only do at a time of "national emergency." And European allies late last week pledged to send 30 million barrels of oil and gasoline from their emergency supplies to the United States to help bridge short-term supply disruptions.

But those are only short-term responses designed to prevent gas prices from surging even higher. Neither step will result in the lowering of prices. Neither will any continued discussion of opening up oil drilling in Alaska or national parks elsewhere in the U.S. -- even if such steps were taken, consumers wouldn't see the results for several years.

The only answer is for Bush to be a leader, and put the interests of the average American ahead of his OPEC and corporate friends.

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This article first appeared at Journalists Against Bush's B.S.

[Greeby]

1. What Bush does

And what a President should do, are mutually exclusive events, and never the twain shall meet

[JABBS]

6. you don't think ...

That Bush wants to stop the criticisms of the federal response to Katrina? What better way than to show that he has jawboned OPEC into lowering oil prices?

[kansasblue]

2. I disagree. We need to...

cut consumption, improve gas mileage, and look of alternate energy sources.

[JABBS]

3. that's a long-term solution

Newsweek once wrote that if the U.S. raised average gas mileage by 3 mpg, we could end our dependence on OPEC. MPG since then has dropped by about 1.3 mpg.

But that's a long-term solution. I'm talking about a short-term solution, to avoid a probable recession.

[Bernardo de La Paz]

4. Should Shrub Talk to the Saudis Too?

[JABBS]

5. Yep

That's what Candidate Bush said he'd do.