Gas prices can bring economies and political careers to a stop

With gasoline prices flirting with $4 per gallon in Northeast Ohio and nearly $5 in California, there’s a new sense of urgency behind calls for action that will reverse the trend.

The problem, of course, is that no one knows exactly what to do, but certainly there is some combination of actions that could have both short- and long-term effects.

Whatever works can’t come soon enough.

In Northeast Ohio, the AAA reports that the average price of self-serve, regular unleaded is $3.906 this week. It was $2.768 a year ago. That an increase of $1.14 a gallon, or more than 41 percent. A motorist who was spending $25 a week on gasoline a year ago — which is about what it would cost to top-off a passenger’s car’s tank when the gauge hit the quarter-full point — will have to pay $35.25 this week. That’s $10 per trip to the gas station that most families will have to take out of some other part of the budget. That ranges from bothersome to a hardship for most people, and it has a deleterious effect on other segments of the economy because every sawbuck being spent at the gas station isn’t being spent somewhere else.

Of course, as motorists cut back on their driving and buy less gasoline, the law of supply and demand will kick in and bring the prices down somewhat. But classic supply and demand isn’t the only economic factor driving gasoline prices; speculators are driving up prices based on the perceived future supply with their leveraged bets on what the market will do.

President Barack Obama has instructed the attorney general, Eric Holder, to head a new Justice Department task force that will investigate any allegations of fraud in the gas speculation market. To the extent that the markets are being manipulated, such an investigation may pay off more in the future than in the present.

In the past we’ve called on the president to tap the nation’s strategic oil reserves to drive down the price of crude oil, but the oil price appears to have stabilized, so that time may have passed.

War of words

Obama and House Speaker John Boehner are playing word games over the wisdom of eliminating $4 billion in tax subsidies for oil companies — oil companies that are going to show more than $30 billion in first-quarter profits, thanks in no small part to the prices that are draining dollars from average American pocketbooks. It’s impossible to justify those kinds of tax breaks for ultra-successful companies, but it’s nigh impossible to keep those companies from passing along any increase in taxes to consumers.

The United States has been complacent for far too long. In the long run, it needs a comprehensive energy program that weans the nation away from imported oil and, eventually, fossil fuels.

In the short run, the White House and Congress had better recognize the seriousness of the situation. In 2008, gasoline prices topped out at $4, and within a year had dropped to half that. In the interim, the Republican Party of George W. Bush paid a heavy price for voter discontent that was fueled, in part, by energy prices and an economic collapse.

Boehner seems to be counting on that, telling ABC News the other day that Obama can’t be re-elected if gasoline is at $5 a gallon. He may be right. But Boehner might also want to consider his own prospects if his House of Representatives is seen as more sympathetic to oil companies than gasoline consumers.

Both sides should be going at full speed to lower gasoline prices, not for their political advantage, but because it is vital to American families and to the nation.