Wednesday, June 10, 2009
President Obama has been busy of late. What with trips to Cairo, Egypt to deliver a speech designed to assuage the Muslim world that America isn’t at war with Islam. This was followed by a stop at the American Cemetary in Normandy, France to commemorate the 65th anniversary of the D-Day offensive in World War II.
But while Mr. Obama was busy preparing for, and participating in these world events, something ominous has been happening at home.
Gas prices have risen 41 days in a row and now stand at a national average of almost $2.62 a gallon. This is a sharp increase from the low of $1.62 a gallon that prevailed at the end of last year.
Refinery problems are producing especially high prices in the Midwest, a region of the country already reeling from the recession. Michigan, the state with the highest unemployment rate — 12.9 percent, is now paying the highest gasoline prices in the nation: an average $2.93 a gallon. This does not bode well for any economic recover.
Americans understandably fear a return to last summer’s historic highs of $4 and more a gallon. Economists say the recent increases are a growing economic problem and may result in greater overall inflation. Or worse, slow or even stop what small glimmers of a recovery we have started to see.
President Obama and his economic team need to understand what analysts have understood all along. The current price increases in a barrel of crude have nothing to do with supply — far from it. The increases are being driven solely by investor expectations of an U.S. economic recovery. Mr. Obama cannot remain silent on the sidelines while the investor class returns this nation to $4 a gallon gas.