Courtesy of Occupy Democrats, with over 60,000 likes and 48,000 shares. Whatever one thinks of these two presidents (the MP dislikes both), this is pure propaganda. It takes a snapshot of gas at an inexpensive station during the lowest prices of Obama’s tenure, and compares it with an expensive station at the highest prices of Bush’s tenure. It leaves the impression of cheaper gas under Obama than Bush, because of “ties to the oil industry”, but is this true? To find out, we need to determine the average price of gas under each president.
Unfortunately, it was exceedingly difficult to find a good source for this data, so the MP had to compile it independently, the old fashioned way. If you doubt the results, feel free to follow the methodology yourself.
The data was taken from the government’s own analysis of gasoline prices. This chart compiles the national average of regular gasoline prices every week. Using the last week of January 2001 until the last week of January in 2009 for Bush, and the last week in January 2009-present (Nov 2, 2015) for Obama, we can add up all the prices in an Excel spreadsheet and average the totals.
Here are the results: (Note: these were from the time the meme was published. For the updated totals for the complete Obama presidency, see further below)
Here’s a graphical chart of historical gas prices to get a different perspective.
But what about inflation? (the smart skeptic asks!)
Good question. We can use this inflation calculator to compare the “real” cost of gas under each president.
Even at the most unfavorable calculation for the Bush era, using 2001 as the starting year, the inflation adjusted average gas price in the Bush era was $2.88 in 2015 dollars. Using a more realistic average of 2005 as the median year, the average price would be $2.61. Both are still far below the Obama average of $3.12
(Update: This analysis was accurate for when this meme was published in Nov. 2015. With Obama’s term now over, the average is $2.98/gal for his entire presidency. Still more than Bush’s $2.12)
It’s true that gas prices did spike higher under Bush than under Obama, as it briefly reached $4.11 (not the $5+ as shown in the meme) in July of 2008, compared with a high of $3.97 for Obama in May 2011. However, this spike only lasted for a couple months before plunging back below $2/gal before the end of the year as the 2008 recession hit. Under Obama, there was a period of over 3 years where gas stayed above $3/gal, something not even approached under Bush, who never had more than 1 year of sustained $3/gal gas. It’s true that the current gas price is relatively low. Whether or not it continues no one knows, but even if it stays low the next year, Obama will have a higher average than Bush.
Does the President Affect Oil Prices?
Yes and no, but mostly no. Presidents are generally given far too much criticism when prices rise, and too much credit when they fall. The busting of this meme in no way condones the Bush presidency, if anything it points out how even disastrous policies have surprisingly little effect on oil prices in the US compared to other factors.
Oil is a commodity traded on the global market, and while there can be manipulation by cartels, the price of gas is generally set by supply and demand (and government taxes on gas!). Bush having friends in the oil business doesn’t have much of an effect on the global supply and demand for oil, just as Obama’s supposed shunning of oil companies doesn’t either. Commodities, like oil, are always volatile and respond to an almost infinite number of effects on the supply and demand. Even major events and policy blunders like wars and “tension in the Middle East” aren’t major drivers, as long as the oil market is allowed to trade freely. For example, if we look after 9/11 and during the start of the Iraq War, prices were lower than now. While there’s always “tension” in that region, there was probably less a couple years ago when gas prices were high, than now with Syria, Iraq and Libya in chaos.
This isn’t to say different policies can’t have some effect on prices, but generally the status of the global economy and the relative value of the dollar have the most impact on prices, something the president has little control over. In the last couple of years, many commodities have plunged relative to the dollar; from gold, to copper, to oil, not because of politician’s sudden lack of ties to “big gold”, but for market reasons.
If we look at the countries which perennially have the highest gas prices, places like Norway and Denmark top the list. These are the countries the Occupy Democrats always like to tout as wonderful, yet often have gas prices 3 times greater than the US (currently about $7.70/gal in Norway!). Ironically, the reason for these high prices are due to those in power. However, it’s not because of “ties to the oil industry”, but taxes and energy policy. The very tax and energy policies the perpetrator of this meme promotes.