President Obama has been selling the economic stimulus bill as “critical” for the economy. It’s hard for most Americans to see how many of the bill's components—$650 million for digital-TV coupons, $150 million for honeybee insurance, $75 million for the Smithsonian, and the list could go on—have any relationship to creating economic growth in the near-term...or long-term for that matter. In fact, much of the bill seems less about job creation than about rewarding liberal constituents.
The policies coming out of President Obama’s Department of Interior also suggest that job creation isn’t the Obama administration’s priority. Last week, Interior Secretary Ken Salazar canceled oil and gas leases on 77 parcels of federal land in Utah, and the Interior Department has also indicated that it will review off-shore drilling policies, no doubt with an eye toward renewing restrictions that were eased under President Bush’s tenure. Congress is also moving in the direction of re-instating restrictions of drilling: this week, the House Natural Resources Committee is expected to hold its first in a series of hearings on offshore oil drilling.
Even in these tough economic times, politically speaking, it’s much easier to talk about re-restricting offshore drilling than in times past. Last July, the national average price of a gallon of gasoline reached $4.11, more than double today’s average. House Republicans spent their August recess staging a “sit in” in Congress to call for a special session to address the problem of rising energy prices. As recently as September, a poll found that high gas prices were voters’ top economic concern.
The banking crisis, the stock market free fall, the bursting of the housing bubble, and rising unemployment have made anxieties about gas prices seem a distant memory. Yet it’s worth considering how much worse it could be if we experience another energy price spike. Families struggling to pay bills amid massive job layoffs would be hard pressed to find it in their budgets to pay double for gas. Businesses facing reduced consumer demand would also strain under the additional burden of higher energy costs, which ripple throughout their overhead into transportation costs, factory fueling costs, and heating bills. State governments likewise would see additional budget pressures from rising energy costs in public schools, hospitals, and government buildings.