Monday, October 31, 2005

Gasoline Prices and Public Opinion


[Data collected from the Energy Information Administration]

Unleaded gasoline was selling for an average 60.5 cents a gallon in January 1976 (the earliest month with records for average unleaded prices). In November 1976, when Jimmy Carter defeated President Ford, the average for Unleaded was down to 60.2 cents. In 1980, when Ronald Reagan defeated Jimmy Carter, Unleaded gasoline had climbed to $1.25 a gallon, doubling in the four year span.

In November 1984, the average for basic Unleaded had dropped to $1.21 a gallon. When George H.W. Bush defeated Governor Michael Dukakis, the price had dropped all the way back to 94.9 cents a gallon for Unleaded. The price climbed back up again over Bush Senior’s term, and was selling at $1.16 in November 1992, when Bill Clinton defeated President Bush.

The price for Unleaded was still at $1.16 when the Republicans took over the House of Representatives in November 1994, and climbed only slightly to $1.26 a gallon when Clinton was re-elected in 1996. The price climbed sharply in 2000, and was selling for $1.55 when George W. Bush defeated Al Gore in the election.

In 2002, the price of a gallon of Unleaded had retreated to $1.45 by the Mid-Term elections. 2004 saw a surge in gasoline prices, crossing the $2 barrier as an average for the first time in May 2004. After that, they steadied however, selling for $2.01 in November when Bush was handily re-elected over Senator John Kerry.

The effects of manipulation by some OPEC members brought the average up to $2.32 by July 2005, and the effects of Hurricanes Katrina and Rita in the Gulf forced the shutdown of major refineries, further bumping up the price. The September average was an all-time high of $2.93 a gallon for Unleaded. However, prices in most locations have come down in the past month as refineries came back on line, so that the average for October should be significantly lower. The single-month jump of 42.4 cents a gallon certainly had significant economic impact, and therefore it is reasonable to conclude that Job Approval for government officials would be much lower, but since the spike is temporary, the approval numbers should return, though historically they go up more slowly than down.

The larger question of whether gasoline prices should be considered a major influence in elections is more difficult to answer. While the 107.6% average price increase during the Carter years is serious and unique, and the fact that supplies were limited and so created an additional dimension of crisis is significant, it is also important to recognize other factors in the election, including Inflation, Unemployment, and a dismal Foreign Policy. Also, since this is Bush’s second term and he will by no means be running for office in 2008, the comparison to Carter becomes completely invalid. It remains to be seen, however, if and how candidates will package the issue for Congressional and State elections.

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