Obama’s Slump And The Price Of Gas

Retail unleaded

A reader writes:

I'm the chief economist of a large London hedge fund and long-time Dish reader (and proud former writer of a featured Dissent Of The Day). There's a very simple explanation for President Obama's nasty poll slump of the past month and it has nothing to do with his performance in the debate over US fiscal policy. Take a look at the attached chart of the US daily average pump price of unleaded gasoline — it's up about 70 cents a gallon, or 23%, since mid-February. At $3.84 a gallon it's just shy of the peak seen in the middle of 2008. Working Americans' disposable income has taken a very nasty hit over the past eight weeks, a hit so big it basically cancels out all the income boost from the December tax deal.

It's no mystery then that the US public's view of the economy has suddenly and sharply worsened (see today's Wapo/ABC poll, and the March drop in the University of Michigan consumer sentiment index), and Obama's approval rating with it. Depressingly, Obama is paying a political price for an economic development beyond his control, even though it is he, rather than his wing-nutty Republican opponents, who supports a rational energy policy to try to address this problem over the medium term. Given global demand and supply developments, gas prices will remain a real wild card for the 2012 election.