Without such much as a jot or tittle of evidence, other than a downtick in the unemployment numbers, an entire conspiracy was launched by Jack Welch and others over Friday’s unemployment numbers released by the Bureau of Labor Statistics.
Mr. Welch was finally forced to admit that his allegation involving those “Chicago guys’ trying to “change numbers” was baseless, just like all of the right-wing conspiracies in the Age of the Scary Negro.
All of which prompted a thoughtful commenter to write the following regarding my piece on this ridiculous conspiracy:
The conspiracy that I want answers to involve gas prices. In June of 08 when we had record gas prices of nearly $4.00/gal the price of a barrel of oil was over $130.00 dollars. Now, we have nearly the same gas prices, but the cost of a barrel of oil is slightly over $90.00. What gives here? Am I the only one that thinks the oil industry is trying to influence the election?
Because gasoline represents about 50% of the U.S. consumption of petroleum products and the Department of Transportation and the U.S. Energy Information Administration claim that the average household purchases about 1,100 gallons of gas every year, I checked on Kabe’s numbers to see if he got them right. Because essentially each penny increase in gasoline represents a tax on consumers.
I found that, as of today, West Texas Intermediate (the grade used in benchmark oil pricing) is priced at $89.92 a barrel.
I then checked on the price of a barrel of oil in June of 2008 and I found the following:
|June 6, 2008||$138.54|
|June 13, 2008||$134.86|
|June 20, 2008||$135.36|
|June 27, 2008||$140.21|
So, it appears that not only was Kabe right, his inquiry actually underestimates the disparity between the current gas/crude ratio and the ratio of 2008, when George Bush was president (crude peaked that year in July at $145 a barrel). We can clearly see that gasoline is higher now than it appears it should be, if oil prices, as we have always been told, determine most of the cost of gasoline.
I then checked on how the cost of a gallon of gas breaks down to see if crude oil pricing does indeed represent a substantial part of the cost:
As you can see, the price of crude oil both in the summer of 2008 and into January of 2012 represented around 80% of the cost of a gallon of gas. In fact here is a graph that shows the steady rise, since 2000, of crude oil as a share of the cost of gasoline and particularly the spikes in the summer of 2008 and 2012:
Now, from these data we would expect that since crude oil has represented and continues to represent such a large part of the price of a gallon of gasoline, that lower oil prices today ($90 a barrel) than in the summer of 2008 (about $140 per barrel), then gas prices should be much lower than they are.
But as we all know, despite the drop in crude oil prices, gasoline remains stubbornly high. Here is a chart that demonstrates the problem:
As you can see quite clearly, the gap between the price of crude and the cost of gasoline was quite dramatic in the summer of 2008—when a Republican administration was under siege and a Republican candidate for president was trying to gain traction against Barack Obama.
Thus, those of us who know that Republicans are in the pockets of the oil industry suspect that something nefarious is at work here. But we should hesitate to advance, without corroborating evidence, some kind of overarching conspiracy designed to elect Mittens. There are plenty of reasonable-sounding explanations available that have nothing to do with an industry conspiracy. Just type into Google, “Why are gas prices so high now?” and you will get 96,700,000 results. Here is one you should check out and here is another and here is another and here is another, just as examples.
Notwithstanding those explanations, there remains no doubt in my mind that bidnessmen in the oil industry want milky Mitt Romney in power. But we need more evidence than the numbers and graphs I presented above, lest we become like Jack Welch and other paranoiacs that people the right-wing conspiracy industry.
What we need is some tenacious investigative journalist or journalists to investigate, to demand an explanation from representatives of and players in the industry, to have them explain why things are operating so asymmetrically today, to have them explain why things seem designed to produce public frustration—which Romney and Ryan and Republicans everywhere are exploiting—with the current occupant of the White’s House.