The weakening of the dollar since 2008 has added 56.5 cents to the price of gasoline, the congressional Joint Economic Committee (JEC) has found. The average price of gasoline would be $3.40 per gallon, instead of the current average price nationally of nearly $4, if the dollar hadn’t declined.
The jobs market continues to improve: 200,000 jobs were added in March. Corporate profits are exceeding forecasts for about three out of four firms, and the quarter that ended yesterday is the best first quarter for stocks in twelve years.
The disaster at Japan’s Fukushima Daiichi nuclear plant, and the upheavals in the Middle East are the sort of events that send economists back to their forecasters’ drawing boards. As usual, there is a tendency to confuse the long-run and the short-run, and to blame developments that were due to occur anyhow on the most recent events.
That headline should be the policy mantra of sensible politicians. Unfortunately, President Obama believes he has to do something to get prices down lest he pay a terrible price at the polls. Equally unfortunate, Republicans are using high gas prices as a stick with which to beat the president.
Some 60 percent of Americans want to see more offshore oil production according to the latest Gallup poll. That's up 10 percent from last May. And that's not all:
The latest findings are from Gallup's annual Environment survey, conducted March 3-6. The same poll shows 49% of Americans in favor of opening Alaska's Arctic National Wildlife Refuge (ANWR) for oil exploration. This is up slightly from 43% in the previous measurement in 2008, and is the highest level of support Gallup has recorded for drilling in ANWR since the question was first asked in 2002.
While political analysts are engaged in the morally elevated task of appraising the effects of events in Libya on the possible spread of democracy in the Arab world, economists are engaged in the grubbier task of figuring out what the effects will be on the economies of their countries. In America, this means taking a guess at the impact of higher oil prices on the nascent recovery.