My first e-mail was to James Hamilton, an economist at the University of California at San Diego who’s looked at gas prices extensively. He explained that you have to break it down into two different components: There’s the price of gasoline, which always rises in the summer, and the price of crude oil, which doesn’t usually rise in the summer. But it’s the price of crude, he said, that’s “the biggest part of the story at the moment.”
So why is the price of crude oil rising? Hamilton thought Libya was the main culprit, hiking prices by about $20 a barrel. That raises the interesting possibility that by intervening in Libya, Obama caused himself a pretty serious political problem: High gas prices mean economic pain, and economic pain means unhappy voters.
But the evidence that gas prices influence polls is weaker than you might expect. A few years ago, a graph showing the tight connection between George W. Bush’s poll numbers and gas prices made the rounds in the blogosphere. Chris Bowers called it “one of the most important statistical projections for American politics, ever.” But though the graph was impressive, more careful political science largely debunked it. When you corrected for the Iraq war and 9/11, “the effect of gas prices is negative but not quite statistically significant at conventional levels.” The graph was mostly correlation posing as causation.
Which isn’t to say gas prices don’t matter at all. John Sides, a political scientist at George Washington University, pointed me to research (pdf) showing that “consumers’ perceptions of inflation are systematically biased toward the inﬂation rates of the most frequently purchased items.” Gasoline is one of those “frequently purchased items,” and so high gas prices can trick consumers into thinking that inflation is higher, and thus the economy is worse, than it really is. That’s bad news for the Obama administration, as the economy is pretty rough already, and anything pushing away from (a) the recovery and (b) the recognition of the recovery is going to hurt them.
All that said, what matters in not where gas prices are now, but where they are in November of 2012. So though gas prices are being treated as a 2012 story, it’s much too early to say whether they’ll have any real role in the 2012 election.