Saturday, October 6, 2012

Gas Prices and the Election - Revisited

With the Presidential and other big political races coming down the homestretch, I thought it would be the right time to check in on a little pet theory of mine - namely that gas prices go up or down in an election year based on which situation will favor the energy sector. See my posts HERE, HERE and HERE for my previous thoughts on this issue.

Energy companies tend to favor policies and politicians that are apt to deregulate their industry and cut their taxes. Sound like one of the two U.S. political parties you might know? Right. The Republicans.

OK, so, say you are a "big energy" company. You want as many conservatives in the  government as you can, and if you can help voters choose the conservative candidate for President all the better. What to do?

A Republican in office you want to see re-elected? Like in 2004. How about an open seat election like we had in 2008 following eight years of a Republican President? You might be apt to see to it that gas prices are lower so people are apt to feel better about the economy and not blame your candidate for gas prices. And that's just what happened in those years. Sure enough, in the midst of a two wars in the middle east and the aftermath of 9-11, gas prices actually went down in the months leading up to the election in 2004. Same thing in 2008 in the middle of a major, major economic meltdown on Wall Street and housing, gas prices went down right before the election.

Democrats in majority or the Presidency? You want the electorate to feel like the economy is bad and, therefore, more likely to vote for the other party in hopes of change...your party, the Republicans. Well, you jack prices up so people feel the pain every time they go to the pump. This will make them more apt to feel the economy is bad and, hopefully for you, vote Republican. And indeed, we can see that gas prices - while going up and down over the summer - are now higher than they were a year ago as Election Day 2012 comes closer and closer.

For example, at our nearby Shell station here in Seattle, gas is at $4.19 a gallon for regular gas. Back in March in the middle of the primaries, it was $4.09.

Now, I understand there is no way to prove that the price of a gallon of gas is directly tied to election cycles and which situation and candidate favors the energy sector...I'm just saying its erie how that is exactly what appears to happen every four years. I'm just sayin'.

So, will gas prices continue to go up until election day? I predict they will.

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