Rick Santorum: High Gas Prices Caused The Recession

Rick Santorum claimed high gas prices caused the recession on Monday.

"We need to look at the situation with gas prices today," he said Monday at a campaign stop in Lansing, Mich. "We went into a recession in 2008 because of gasoline prices. The bubble burst in housing because people couldn't pay their mortgages because they were looking at $4 a gallon gasoline."

"Look at what happened," continued the former Pennsylvania senator. "Economic decline. Here we are again. Trying to struggle out of a recession with Barack Obama and the federal government on the backs of business, not letting them grow. And now we have energy prices again, why? Because of government policy."

Most attribute the economic recession to a combination of the collapse in the housing market and the financial crisis. However, a paper by economist James Hamilton suggested that the oil price shock in the summer of 2008 was an important factor dragging the economic slowdown into recession.

Santorum made the same claim in early February speaking in Colorado prior to the state's primary.

Comments

[rshrink]

05:55 PM on 03/02/2012

Santorum is just another stooge for ALEC. American Legislative Exchange Council. That organization is made up of the heads of our wealthiest corporations and right wing legislators who introduce legislation that is written by these corporations.

"Through the corporate-funded American Legislative Exchange Council, global corporations and state politicians vote behind closed doors to try to rewrite state laws that govern your rights. These so-called "model bills" reach into almost every area of American life and often directly benefit huge corporations. In ALEC's own words, corporations have "a VOICE and a VOTE" on specific changes to the law that are then proposed in your state. DO YOU? " (alec.org.)

A vote for Santorum, is a vote for the one percent and a vote against yourself.

[rshrink]

06:18 PM on 03/02/2012

Should be alecexposed.org.

[Veratruth]

02:56 PM on 03/01/2012

Gas prices did hit $4.00 in 2008 (probably the highest in history), but who was president? Of course the speculators (in oil and housing) were in full swing during that election year ALSO.

[grayplace]

05:18 PM on 02/28/2012

Ricky, you have failed at world and domestic politics, civil rights, human rights, religious freedom, constitutional protections, and now economics. You have no qualifications to be President. Give it up.

[lady joanna]

09:29 PM on 02/28/2012

You've covered everything but all this throwing up he's going on about. Do you think he's pregnant?

[grayplace]

12:06 AM on 02/29/2012

I think that's the rest of his body trying to reach up and gag his brain.

[solar corona map]

03:07 PM on 02/28/2012

Interesting. I really expected him to say it was Satan.

[SirReal1]

06:19 PM on 02/28/2012

Nice one!

[Dkbny]

02:24 PM on 02/28/2012

Further proof that Rick will say anything to get the nomination. Or at least a headline.

[lady joanna]

09:30 PM on 02/28/2012

Yes, he seems to just say anything that comes out of his mouth. I couldn't imagine him as president.

[Dkbny]

11:53 PM on 02/28/2012

The thought of him as president SCARES me. I would move to France or somewhere.

[fredpa]

12:55 PM on 02/28/2012

"We went into a recession in 2008 because of gasoline prices. The bubble burst in housing because people couldn't pay their mortgages because they were looking at $4 a gallon gasoline."

I won't even ennoble this as fractured logic. There is no logic of any kind to it. It is delusional.

[Roger Ramjet]

02:51 PM on 02/28/2012

Most especially if you not believe in price inelasticity...as you apparently do not.

[SirReal1]

06:24 PM on 02/28/2012

What does PED have to do with the near collapse of the World Economy?

[Yank in France]

08:48 AM on 03/02/2012

Mr Ramjet, the recession of 2008 was not caused by the bursting of the housing bubble or the rise in gasoline prices! It was the collapse of certain financial markets, particularly, the mortgage-backed assets!

[vobox3343]

12:34 PM on 02/28/2012

Uhm, is there really someone out there who is taking Santorum at his word? A man who doesn't even know what factors caused our near repeat of the Great Depression, musn't be president. That's just a given. Who hath bewitched the Republicans, Bachmann or Palin?

[Greenberry]

01:13 PM on 02/28/2012

Let's go with your suggestion that anyone who doesn't know the factors of the recent recession mustn't be president. Oops, we just ruled out President Obama.

I have seen no articles, interviews, or press conferences where the president explains the causes of the recession. Surely, on a matter that we both agree is vital to being president, there must be an abundance of links to Obama presenting his reasoned analysis.

Can you find one?

[Bobby4242]

01:39 PM on 02/28/2012

I see why you agree with Santorum. They passed Frank Dodd to limit at least a little bit what the banks can do. They would have been able to do a lot more if the Repubs would have given a little support to do more. They have passed bills to try and help the home owner. The recession has been over for several years. The stock market is back to almost 1300 and corportations are back to making record profits. Jobs have not come back because so many of them have been sent overseas. Would have helped if the Repubs had not filibustered the 2008 house bill 3816 which would have moved the tax break from giving it to companies that moved their jobs oversea to giving it to those companies that creat jobs in America. $4 gas hurts the economy but to think is caused the recession show a total inability to comprehend how things work.

[SirReal1]

06:55 PM on 02/28/2012

HuffPo has posted the second part of my response, give it a little while and I'm confident the first part will make it up as well.

The answer, as I'm sure you already know, is that the myriad factors that contributed to the World Financial Crisis are too numerous and too complex for the President (regardless of who might hold that office) to provide a "simple explanation" to the American People. If he actually presented them all, and gave just a summary explanation of what each was, and how it contributed, it would be a four hour (or more) presentation.

Even then, most people wouldn't understand it.

I'm going to go out on a limb here, and ASSUME that you're not one of those people who thinks that "every problem, no matter how complex; must have a SIMPLE EXPLANATION with an equally SIMPLE REMEDY. I'll give you more credit than that, until you demonstrate otherwise.

You want links to where the President has laid out SOME of the problems, and their solutions?

Look up any speech he's made about "Dodd-Frank". Look up any speech he's made about the "Consumer Protection Act". Look up any speech he's made about the "Volcker Rule". Look up any speech he's made about his "Jobs Program Proposals".

They're ALL about "what went wrong" and "how we can fix it".

Of course, I believe you already knew that.”

[Redhand126]

12:09 PM on 02/28/2012

RS = 1,001 ways to be wrong

[sleepyguy510]

12:04 PM on 02/28/2012

Santorum: Gas prices caused women to have a uterus, and I won't stand for that! Vote for me!

[fredpa]

12:55 PM on 02/28/2012

Plus my ED.

[Terri Skau]

12:03 PM on 02/28/2012

ROFL.....I think Rick had too much GOP/TP kool-aid last night and tomorrow he'll say he made a mistake..

[lady joanna]

09:31 PM on 02/28/2012

You mean he won't throw up?

[Terri Skau]

10:50 PM on 02/28/2012

LOL...backatcha F/F ;-)

[sleepyguy510]

12:03 PM on 02/28/2012

Santorum: Gas prices are too high.....ban abortion.

[MrOrlando]

11:58 AM on 02/28/2012

I don't think Santorum is stupid. I think he's a calculating lier who will say or do anything to get back into public life ( the bad, bad government). The only thing at which he's been successful is producing a litter of baby Santorums to further pollute the world. He may be pious, might even be religious, but he certainly is not a moral person. He is not an honest person. Pennsylvania knew what they were doing when they ousted him. Ethics have always been one of his biggest problems. Check out his record. Look at 2006.

[JShankel]

11:52 AM on 02/28/2012

The hell? The mortgage bubble was caused by a brief upswing in the price of gas? Huh, funny, cuz I thought the right wing talking point was that the evil Fannie and Freddie were forcing banks to give loans to people who couldn't afford them. But now it turns out that it was three months of high gas prices that did it? Banks just started foreclosing on people who were only like two months behind? Because the were spending 30% more on gasoline? To the tune if maybe $100/month? Our system is really that vulnerable? A short term fluctuation in gas prices at the beginning of summer can destroy trillions of dollars and necessitate bank bailouts? But but but..,I thought the "free market" could do no wrong?

[Roger Ramjet]

03:04 PM on 02/28/2012

As you're witnessing today, the free market responds to governmental influence - both favorably and unfavorably. A lack of production of anything always leads to higher prices and, contrary to his claim that "we're producing more today than ever before", BHO's policies are demonstrably responsible for the increase in fuel costs.

http://biggovernment.com/whall/2012/02/27/7-gas-facts-obama-cannot-escape/

On housing, how is it that a vaulted Politics Pundit would wax elequently about the subject without mentioning the Community Reinvestment Act and its surrogates which, most know, led to the meltdown? Are you here to enlighten, or obscure?

http://www.technicalwatch.com/forum08/IBD103008.pdf

[JShankel]

03:22 PM on 02/28/2012

I didn't say a single, solitary thing about Obama or his policies or whether they are responsible for the current rise in prices.

I'll start from the very beginning: Rick Santorum claimed that the housing bubble, which burst in July of 2008 which (little known fact) was months before Barack Obama even won the election let alone took office, was caused NOT by the Community Reinvestment Act you cite, but rather by the increase in gas prices experienced in 2008 when gas prices were just below where they are now.

Now, if what you say is true and the housing bubble was caused by the Community Reinvestment Act , then it wasn't gas prices in the spring and summer of 2008 that did it, now is it?  Which means that Rick Santorum is either a fool or a liar for saying so.

If, on the other hand, Rick Santorum is correct and the housing crisis...a massive wave of foreclosures that stripped about 30% of the value out of the housing market...was caused by a four month increase in fuel costs of about 25% above levels everyone agrees are certainly sustainable, that means that it wasn't the CRA or Fannie and Freddie or a sudden simultaneous failure of personal responsibility on the part of tens of millinons of homeowners and what REALLY happened is that rather than choose to weather a few bad months and collect a few late fees over the course of the next few years on mortgages that would once again be completely servicable when gas dropped below $4, banks INSTEAD chose to wipe out 1/3 of the global economy.  Because of fiscal responsibility.

So which is it?  Is Santorum wrong and the housing bubble was actually caused by financial malfeasance on SOMEONE'S part?  Or was the housing bubble, which caused a global financial meltdown that will likely take decades to reverse, a perfectly rational and natural response to a short term (< 6 month) increase in fuel prices?

[doriath22]

11:30 AM on 02/28/2012

Prices at the pump peaked in July, 2008, so I guess that means he blames it on the Drunk from Crawford

[ethiopia1a]

11:29 AM on 02/28/2012

Santorum sounds a lot like the male version of Sarah Palin, only with less you betchas.

[vobox3343]

12:38 PM on 02/28/2012

And this guy is educated? What a travesty, that we have Republicans making a mockery of Democratic process by sending us the most unprepared and unelectable group of guys we've ever seen. Time for the lipstick on a pig jokes to resurface.

[solar corona map]

05:47 PM on 02/28/2012

You shouldn't demean pigs by comparing them to Republicans

[lady joanna]

09:34 PM on 02/28/2012

Too many people are buying into this according to the voting and polls. Scary isn't it?