WSJ on rising oil prices

( – promoted by Rob “EaBo Clipper” Eno)

Dear candidates, please read this, if you understand and articulate it to voters, you will win. Otherwise you can make your campaign about Sal Di Masi and you are going to get 42%. Here it is:

…Mr. Obama yesterday blamed rising demand from the likes of Brazil and China, and there is something to that as well. But this energy demand is also not new, and if anything Chinese and Brazilian economic growth has been slowing in recent months.

Another suspect-one Mr. Obama doesn’t like to mention-is U.S. monetary policy. Oil is traded in dollars, and its price therefore rises when the value of the dollar falls, all else being equal. The Federal Reserve throughout Mr. Obama’s term has pursued the easiest monetary policy in modern times, expressly to revive the housing market. It has done so with the private support and urging of the White House and through Mr. Obama’s appointees who are now a majority on the Fed’s Board of Governors.

Oil staged its last price surge along with other commodity prices when the Fed revved up its second burst of “quantitative easing” in 2010-2011. Prices stabilized when QE2 ended. But in recent months the Fed has again signaled its commitment to near-zero interest rates first through 2013, and recently through 2014. Commodity prices, including oil, have since begun another surge, and hedge funds have begun to bet on commodity plays again. John Paulson says he’s betting on gold, the ultimate hedge against a falling dollar.

Fed officials and Mr. Obama want to take credit for easy money if stock-market and housing prices rise, but then deny any responsibility if commodity prices rise too, causing food and energy prices to soar for consumers. They can’t have it both ways, as not-so-stupid Americans intuitively understand when they buy groceries or gas. This is the double-edged sword of an economic recovery “built to last” on easy money rather than on sound fiscal and regulatory policies… [–emphasis mine]…

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  • edfactor

    The government has always been heavily involved in this industry, and therefore we don’t have a free market for energy at all. Constant government meddling creates many great opportunities for Republican candidates, especially as energy affects many industries, our trade balance, our relations with other countries, and economic growth.

    However, to be effective, you’ve got to spend some real time learning about it, rather than just complaining about the price of gas or wasted government investments in renewable technologies. (So… for instance, stop listening to the idiots on Fox News or talk radio complain about it and spend some time with better sources of information.) You also have to spend some time educating voters on how it all works.

    Jeff Semon (running for 5th Congressional district) is definitely doing a lot of talking about energy. He sounds pretty smart and cites serious publications in his social media posts about energy. I think he will get some really good mileage out of the issue. 😉

  • Approval of an offshore drilling plan now takes 92 days, 31 more than the historical average.

    As if this change were precipitated by nothing.  Apparently, the Gulf oil spill has been tossed down the memory hole.  

    Kinda funny how he is complaining about a mere 31 more days on top of the average 61.  How long does it take for approval of an offshore wind farm?  Seems like a helluva lot longer, doesn’t it?