GOP's Next 2012 Anti-Obama Tool: Gas Prices & Gouging

Since Our Nation's Unemployment Numbers Have Been Reduced, Donald Trump's "Birther" Claims Have Fizzled & Paul Ryan's Budget Backfired, What's The GOP's Next 2012 Anti-Obama Tool?

Scaring American Voters With Rising Gas Prices By Allowing Gas Price Gouging & Speculation To Occur!

President Obama Was Right About His Administration Investigating & Stopping Such Corrupt Behavior Just For Short Term Political Gain.

I Hope Attorney Holder Eric Holder Finds & Prosecutes The Culprits Responsible Soon!




High Gas Prices cut into driving habits — and Obama’s approval rating


Soaring gasoline prices are biting into household incomes and nibbling at Americans’ fuel consumption and support for President Obama, according to a Washington Post-ABC News poll.

About six in 10 respondents said they had cut back on driving because of rising fuel prices, and seven in 10 said that high pump prices are causing financial hardship.

Obama, like previous presidents in times of high oil prices, is taking a hit. Only 39 percent of those who call gas prices a “serious financial hardship” approve of the way he is doing his job, and 33 percent of them say he’s doing a good job on the economy.

The Energy Information Administration said Monday that gas prices climbed last week to $3.88 a gallon, up 81 cents since the start of the year. It is the highest that pump prices have been since August 2008, before the financial meltdown.

Evidence of motorists’ hardships are littering the roads. The Automobile Association of America says the number of motorists running out of gas has been surging. John Townsend, a AAA spokesman, said that cash-strapped members “are pushing the envelope” and that emergency gasoline deliveries to stranded members jumped nationwide, including up 40 percent in the District.

That sort of hardship could slow the Obama reelection campaign. The Post-ABC poll results show that 60 percent of independents who say they’ve been hit hard by surging gas prices also say they definitely won’t support Obama in his bid for reelection.

In a theoretical match-up with former Massachusetts governor Mitt Romney, the top GOP performer in the Post-ABC poll, Romney wins by a 24-point margin among the independents who have taken a severe financial hit because of gas prices, and the president is up 7 percentage point among others.

At a fundraiser in Southern California last week, where pump prices are the highest in the country, Obama acknowledged the political peril of high gas prices. He said, “My poll numbers go up and down depending on the latest crisis, and right now gas prices are weighing heavily on people.”

He tried to show that he feels motorists’ pain. “I admit, Secret Service doesn’t let me fill up the pump anymore,” he said. “But it hasn’t been that long since I did.”

The poll also shows the stubborn nature of gasoline consumption, and the difficulty of weaning the country off its dependence on imported oil. About a quarter of all Americans say they would not alter their driving habits until prices, which are about $1 a gallon higher than a year ago, climb another $1.10 or to more than $5.

Even though gasoline prices are just a quarter of a dollar short of their all-time record of $4.11 for a gallon of regular set in July 2008, the Energy Information Administration forecast this month that gasoline consumption would average about 9.3 million barrels a day over the peak summer driving season, a 0.5 percent increase over last summer.

“Population growth and a recovering economy contribute to gasoline consumption growth,” EIA said, adding that high gas prices and better fuel efficiency standards would dampen demand. Consumption of diesel fuel is expected to climb 2.3 percent because of higher industrial output and trade.

“I think the evidence is strong that people are not very price responsive and that there are no magic thresholds where the effect changes suddenly,” said Severin Borenstein, a professor at the University of California Berkeley business school and director of the California Energy Institute.

In 2008 when prices last spiked, motorists carpooled, households drove the more efficient of their cars when a choice was possible and many people opted for public transportation. But the impact was slight.

Borenstein says the drop in consumption was 3 to 4 percentage points. “That’s a pretty small demand response when the price of gasoline nearly doubles,” he said. Moreover, he said, “this was happening in context of a giant recession, so there were income effects as well.”

Christopher Knittel, a professor of applied economics at the Massachusetts Institute of Technology, said that “consumers are less responsive today than in the past, especially when compared to the 1970s.” With the growth of families with two income earners and other social changes, motorists are less likely to regard their day-to-day driving as discretionary.

But, Knittel said, “if prices continue to be high, they start to change what cars they buy and manufacturers start to change the cars they offer. So it really depends on the time frame.”

Knittel said that the increase in gasoline prices is partly a result of the recovering economy. “One of the reasons gas prices are high is that we are coming out of the recession,” he said. “So it’s sort of bitter sweet. The economy is getting strong, but it’s hurting our pocketbook.”

That could circle around and undercut the recovery. Peter Morici, a professor at the University of Maryland’s business school, estimates that the spike in gas prices since September translates into a 5 percent cut in discretionary income and that Americans “will be eating fewer restaurant meals, wearing fewer new clothes, curtailing summer vacation plans, and postponing furniture purchases and home improvements.”

In the Post-ABC poll, 12 percent of people who consider gas prices a financial hardship said they had slashed spending elsewhere.

The telephone poll was conducted April 14 to 17 among a random national sample of 1,001 adults. The margin of sampling error is 3.5 percentage points.


Sources: AP, Washington Post, Youtube

Obama Finally Lets Finance Whiz Paul Volcker Spread His Wings

Visit msnbc.com for breaking news, world news, and news about the economy

Obama's "Volcker Rule" Shifts Power Away From Geithner


For much of last year, Paul Volcker wandered the country arguing for tougher restraints on big banks while the Obama administration pursued a more moderate regulatory agenda driven by Treasury Secretary Timothy F. Geithner.

Thursday morning at the White House, it seemed as if the two men had swapped places. A beaming Volcker stood at Obama's right as the president endorsed his proposal and branded it the "Volcker Rule." Geithner stood farther away, compelled to accommodate a stance he once considered less effective than his own.

The moment was the product of Volcker's persistence and a desire by the White House to impose sharper checks on the financial industry than Geithner had been advocating, according to some government sources and political analysts. It was Obama's most visible break yet from the reform philosophy that Geithner and his allies had been promoting earlier.

Senior administration officials say there is now broad consensus within the White House and the Treasury for the plan advanced by Volcker, who leads an outside economic advisory group for the president. At its heart, Volcker's plan restricts banks from making speculative investments that do not benefit their customers. He has argued that such speculative activity played a key role in the financial crisis. The administration also wants to limit the ability of the largest banks to use borrowed money to fund expansion plans.

The proposals, which require congressional approval, are the most explicit restrictions the administration has tried to impose on the banking industry. It will help to have Volcker, a legendary former Federal Reserve chairman who garners respect on both sides of the aisle, on Obama's side as the White House makes a final push for a financial reform bill on Capitol Hill, a senior official noted.

Advocates of Volcker's ideas were delighted. "This is a complete change of policy that was announced today. It's a fundamental shift," said Simon Johnson, a professor at MIT's Sloan School of Management. "This is coming from the political side. There are classic signs of major policy changes under pressure . . . but in a new and much more sensible direction."

Industry officials, however, said they were startled and disheartened that Geithner was overruled, in part because they supported the more moderate approach Geithner proposed last year.

"His influence may have slipped," said a senior industry official who spoke on the condition of anonymity to preserve his relationship with the administration. "But you could also argue that it wasn't Geithner who lost power. It's just that the president needed Volcker politically" to look tough on big banks.

Geithner agreed with Volcker that banks' risk-taking needed to be constrained.

But through much of the past year, Geithner said the best approach to limiting it is to require banks to hold more capital in reserve to cover losses, reducing their potential profits. Geithner said blanket prohibitions on specific activities would be less effective, in part because such bans would eliminate some legitimate activity unnecessarily.

The shift toward Volcker's thinking began last fall, according to government officials who spoke on the condition of anonymity because the deliberations were private.

Volcker had been arguing that banks, which are sheltered by the government because lending is important to the economy, should be prevented from taking advantage of that safety net to make speculative investments.

To make his case, he met with lawmakers on Capitol Hill and gave numerous speeches on the subject, traveling to at least nine cities on several continents to warn that banks had developed "unmanageable conflicts of interest" as they made investments for clients and themselves simultaneously.

"We ought to have some very large institutions whose primary purpose is a kind of fiduciary responsibility to service consumers, individuals, businesses and governments by providing outlets for their money and by providing credit," he said during one speech in Toronto. "They ought to be the core of the credit and financial system. Those institutions should not engage in highly risky entrepreneurial activity."

Gradually, Volcker picked up allies. John Reed, the former chairman of Citigroup, expressed his public support. So did Mervyn King, governor of the Bank of England.

His ideas began gaining traction within the administration in late October, when the president convened a meeting of his senior economic advisers in the Oval Office to hear a detailed presentation by the former Fed chairman.

There was no immediate change of course. But after the House passed a regulatory reform bill on Dec. 11 that was largely based on the Geithner's vision, the administration began to warm to Volcker's ideas, which had the political value of seeming tough on Wall Street, said sources in contact with the Treasury and White House.

At the time, administration officials were growing concerned that government guarantees designed to spur lending by letting banks borrow cheaply were instead funding banks' speculative investments and fueling soaring profits, said Austan Goolsbee, a member of the president's Council of Economic Advisers.

"We started coming out of the rescue and you saw some of the biggest financial institutions . . . who had access to cheap financing . . . use that money without lending or anything, just doing their own investments," he said. "That clearly started putting [the issue] on the radar screen for us."

Goolsbee said that Vice President Biden became a particular advocate for Volcker's approach.

In mid-December, the president formally endorsed Volcker's approach and asked Geithner and Lawrence H. Summers, the director of the National Economic Council, to work closely with the former Fed chairman to develop proposals that could be sent to Capitol Hill. The three men had long discussions about the idea, including a lengthy one-on-one lunch between Geithner and Volcker on Christmas Eve.

Summers and Geithner had been reluctant to take on battles that weren't at the heart of the problem that fueled the crisis. But ultimately, an administration official said, the two men concluded that reform needs to be about more than just fighting the last war -- it needs to address sources of future risk as well.


Sources: Washington Post, MSNBC