Saturday, October 25, 2008
Falling gas prices--the October surprise?
A common heuristic that many Americans use as a measure of economic security or the lack thereof is the rise and fall of gas prices. As gas prices go up, people get increasingly anxious about their economic well-being. As they fall (as is presently now happening), people feel better about their economic situation. This is not to deny that many other factors, including the rise and fall of stock market, whether you feel your job is in jeopardy, whether you have a job, etc. don't contribute to economic anxiety. But gas prices, given the centrality of the automobile to American life, are the most visible and easily understood part of the financial mess we find ourselves in. So I wonder if this might not redound in McCain's favor. The less economic anxiety, the more other issues that would favor McCain might kick in. Well, maybe it is all too little and too late. And maybe people are smart enough to understand that gas prices are falling because the whole world is going into a recession which depresses the price of oil everywhere (i.e., when things start to turn around, gas prices will inevitably go up). But I don't know. Do you think this is a possible October surprise?
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2 comments:
Being from Los Angeles where people use their cars to go everywhere and sit on the 405 in their cars for hours I completely agree that the automobile is central to American life, especially in places like southern california where we tend to live in our cars. Gas prices however are absolutely affecting people all over America, especially in this economic crisis, but I do not believe that the McCain campaign has associated itself with the issue of the economy in terms of specifically relating it to gas prices to gain or lose politically. I think that the issue of the economy as a whole is focused more in the media on how Washington and politicians have "gotten us into this mess" and not so much the economy and its direct relationship to gas prices. Whether or not gas prices rise or fall, other economic issues like mortgages and unemployment are more visible on the public's radar when discussing the current economic crisis and bailout plan. I do not think that the current month of falling gas prices will give McCain a push that he needs to win the presidency.
While I agree that the decline in oil prices could potentially help McCain, many other factors would also have to change in order to push the election in his favor. When asked who can rescue the economy, a recent Time poll suggests that Americans support Obama over McCain on a ratio of 3:1. When combining that with the fact that many economists and financial experts predict a very serious recession in our future, a decrease in gas prices will do little to reduce the economic anxiety that appears to be at the core of this election. Although this reduction in gas prices has been a nice surprise and has considerably reduced the burden on my wallet, I'd more welcome the surprise of actually securing a job upon my May graduation.
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