Sorry GOP Economy Hasn't Slipped on Oil Prices

     This has been their game plan for 4 years of course taking any bad headlines and making a case against Obama. The idea that they could actually do something to help the economy rather than satisfy Rush Limbaugh's desire that the President fail would never occur to them.

    During this GOP primary things haven't been working their way. The improving economy leads them to try and deny what we see with our own lying eyes As that didn't work they delved into the familiar social issues, attacking birth control and a woman's right to choose. They have tried to couch their misogynistic Fatwah in the terms of "religious liberty" but they sure are convincing anyone but themselves.

    Everyone knows that the GOP's idea of religious liberty means the liberty of the religious-so long as traditionalist Christian-to take away the rights of the rest of us. Their "liberty" means they can disobey the law the rest of us must follow-providing health care to employees including contraception-with the added "liberty" to encroach on the rights of the secular, Muslims, or indeed Jews and Christians who respect the liberty of others.

   The main legacy of all this has been that they now trail 20 points to Obama among women. As women are the majority the must think their hatred of women will somehow cause men to vote for them by 40 points. Not going to happen. While the GOP may have a congenital hatred and disrespect of women there are enough of us guys who don't have this attitude and will not allow them to do this to our wives, daughters, sisters, or mothers.

    So the GOP was foiled again on this. Now they have embraced high oil prices as their salvation. The American people are going to elect Mitt Romney because oil prices are high. Mind you they aren't as high as they got in the Summer of 2008 or even last year but this will save them. We have the "free market" Republican party now guaranteeing us $2.50 gas at the pump in a way that would make Hugo Chavez proud. What about a unicorn for every middle class family Newt?

     Unfortunately, there is more bad news for them. On a page 2 item in today's Wall Street Journal  we read that the economy in fact hasn't slipped on oil prices. Curses! Foiled again!

     http://online.wsj.com/article/SB10001424052702303863404577285723465618282.html?mod=googlenews_wsj

     To be sure they still could which is the prospect the Republicans are salivating about. But there are reasons to think this may not happen. First of all, why haven't they already risen? One reason is that unlike the economy in early 2011 which the rising oil prices did hurt it is now stronger with the increase in employment and the further pay down in the debt of Americans.

     Another factor is that gas prices are not any higher than in 2008 or the first half of 2011. Gas prices are not at a new high, just retracing previous levels.

    Then too, gas prices nationally are still only up 19% since the previous December low compared with a 50% run up in 2011.

    Finally what's important is how much of the run up is supply vs. demand. This makes a heck of a lot of difference. If it rises due to lack of supply-a supply shock-it is a large concern. However if it's due to rising demand then it means oil is going up in price due to a growing economy. If this is the case it much less likely to be a problem and indeed is kind of a positive indicator in a way.

    While no one likes higher gasoline and oil prices, since 2001 they have been cyclical-when the economy does well they rise, when it does poorly they fall. Republicans who try to attack Obama on the basis that gas was $1.89 when he was sworn in are ignoring that gas was so low only because of a collapse in asset prices.

    To be sure, if the current rise in oil is due to a supply shock-precipitated by the Iran standoff  then if there is war between Israel and Iran for example this could lead to a major supply shock and maybe we could see oil spike.

    My guess though is that a lot of the current prices are demand based and that the high oil price concern is short term. Analysts seem to see oil rising till maybe May. Beyond that they may calm down. Remember it's all relative. If in two years gas is at $5 it's not a problem as other prices have gone up with it.