Romney Joins Gas Price Pander

Romney Joins Gas Price Pander

Mitt says his opponents “don’t understand the economy.” Neither does he. 

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For someone running for office on the strength of his knowledge and experience in the free-market economy, Mitt Romney sure is spouting a lot of ignorant nonsense. Romney has used the same epithet—“doesn’t understand the economy”—against both President Obama and Newt Gingrich.

But Romney is contradicting basic economic facts on the campaign trail this week. He has adopted Gingrich’s demagogic strategy of blaming President Obama for rising gas prices. On Sunday Romney told Fox News there is “no question” Obama’s policies are responsible for prices at the pump. “He said that energy prices would skyrocket under his views, and he selected three people to help him implement that program. The secretary of energy, the secretary of interior and EPA administrator. And this gas hike trio has been doing the job over the last three-and-a-half years, and gas prices are up.” Romney has repeated those comments at campaign events on Sunday and Monday. 

Romney, of course, is pulling a bait-and-switch when he claims Obama stated a goal of raising gas prices. Obama did say that his cap-and-trade proposal would raise prices of electricity, which Romney conflates with gasoline by collectively lumping them as energy. But cap-and-trade did not pass. Romney fails to specify which policies Obama has enacted that have raised the price of petroleum, because there aren’t any. The only argument Republicans such as Romney and Gingrich can muster is that Obama has rejected some proposals to drill for oil or build pipelines in environmentally precarious locations.

Aggregate domestic oil drilling has actually risen under Obama. But that doesn’t matter. Suppose it had declined. Oil is a global, fungible commodity. As demand increases in industrializing nations such as China and India, prices are sure to rise eventually. Global supply of oil is finite, so there is no way that global demand can increase indefinitely without prices going up.

You’d think from listening to Romney and Gingrich that they were ideological fellow travelers of Hugo Chávez. After all, their proposal to reduce American gas prices would help only if we nationalized the oil industry. If we continue to operate as a free-market economy, then ExxonMobil will sell the oil they drill here to the highest bidder, not necessarily the American consumer.

Even if we did nationalize the oil industry, increased drilling would have a limited impact on prices. We account for about 25 percent of global annual oil consumption, while we have only 2 percent of the world’s proven oil reserves.

So there are two possibilities: either Romney doesn’t understand how the economy works, or he is just a dishonest craven panderer. Considering that he holds two advanced degrees from Harvard, counts on Harvard professors as economic and foreign policy advisers and cites Harvard professors in his speeches—while bashing Obama for “taking advice from the Harvard faculty lounge”—my guess is that the answer is the latter.

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