Former Pennsylvania Governor Ed Rendell said Tuesday that the current drop in gas prices could significantly dampen one of the GOP’s major economic talking points against President Barack Obama — but only if prices remain low through November.
Uhmm….. that’s almost true. The price of gasoline is a pretty fair reflection of the economic outlook. When it’s high, demand for it is high. The only way for gasoline to be in high demand, is that if people predict that our economy will get better. the price drops when things are bad.
Here we see little spikes when something happens in the Mid-east. But, once the pant wetting oil traders understand that most of the world’s oil will continue to pump, the price drops back down. Now, look at the right of the graph. There we can easily see the recession. and the price increase as people thought our economy was improving. Now, it’s dropping again. Why? Because the globe is set for a huge double dip recession. If the price drops to $2, it doesn’t matter who is running against him. His opponent wins. If the price drops to $3, he’s still in trouble, but, Obama has a chance. Any lower and that means we’re already in big trouble.
The last thing Obama wants to see is a dramatic drop in oil. It means we’re screwed.