Our economy is at a critical crossroads. The financial mess has threatened to tip our economy into depression. The administration is valiantly trying to steady a listing ship in sight of an iceberg. And yet in the last five months, in spite of all the government's efforts and the need to resuscitate the world's economy, our friends at OPEC have colluded to restrain production, and the speculators and manipulators are back trying to game the oil price. In the last five months the price of oil has escalated more than 60% and the price of gasoline has jumped by more than $.25/gallon in the last two weeks alone.
Thus, the same elements are at play that helped crater the economy. Consider the following: Just before the financial blow-up, oil prices had reached $140/barrel and gas over $4.00/gallon. Put yourself in the position of a prospective home buyer at the time. Given the vast transportation uncertainties occasioned by the explosion in gasoline prices, would you have committed to buy a home whose access depended on your car, and the spiraling price at what would become your local gas pump? For many the answer was no, not now, and then the housing market began to crater with all its financial impact.
Given past history, it is time for the government to act. The Bush administration in its inimical fashion -- helpful to his oil pals to the end -- began adding oil to the Strategic Petroleum Reserve just weeks before turning over the baton of governance to the Obama administration (please see "Stop The Energy Department From Hiking Oil Prices By Reinstituting Purchases For The Strategic Petroleum Reserve," January 4, 2009).
It is time for the Obama administration to show it is cognizant of the creeping upward push of oil and gasoline prices and its impact on a still very fragile economy. It is time to undo the last-minute Bush administration policy of reinstituting purchases for the reserve, by stopping all further purchases until the economy has truly stabilized (please see "Why Are We Paying $50 a Barrel for $20 Barrel Oil??," April 27, 2009) and the price of oil has retreated significantly.
Stopping purchases would send a signal to OPEC and the speculators that the government will no longer sit idly by while prices are manipulated ever higher placing our economy at strategic risk!