"McCain-Obama Gas Pandering?"

Like two rival filling-station owners across the highway in long-bygone price wars, Democratic Sen. Barack Obama and Republican Sen. John McCain keep putting up flashy signs and offering new incentives in hopes of attracting customers battered by $4 gas prices.

McCain is offering a summer break from the 18.4-cent federal gasoline tax, and holding out the promise of more offshore drilling to help you drive more cheaply to the beach. He wants to build 45 new nuclear reactors to generate electricity. On Monday, he proposed a $300 million government prize to anyone who can develop a superior battery to power cars of the future.

He may even wash your windows.

If you pull into the Obama station, he'll promise you cash back from the windfall-profits tax he plans to slap on Big Oil. Check the tires? How about promises to go after oil-market speculators who help drive up prices as well as big subsidies for solar, wind, ethanol and other alternative-energy projects? The Illinois senator likens his energy package to the Kennedy-era space program.

Yet energy experts and economists — and even some of the candidates' own advisers — say none of their signature proposals will have any impact on $4 gasoline or $130 a barrel oil in the near term, or even the intermediate term.

Is it open season for pandering?

"I think it is. This is a real pressure point for people every day, everytime they fill their tanks. Therefore, politicians can't leave it alone," said Fred Greenstein, professor emeritus of politics at Princeton University.

Yet, on some long-range issues they're closer together than their current rhetoric would suggest.

Both want to boost alternative energy technology, press for more fuel efficiency and promote more conservation. Both McCain and Obama favor expanding the electricity grid, implementing caps on carbon emissions to curb global warming, spend billions on clean-coal research and give nuclear energy a larger role. They differ on offshore drilling, but agree on keeping the ban on oil exploration in the Arctic National Wildlife Refuge.

Despite the flurry of activity and rhetoric, major factors in the rise of gas prices — the weak dollar, soaring demand in China and India, market speculation, supply problems — are beyond U.S. policy-makers' direct control.

"There's no really good near-term policy response to what's happening," said Mark Zandi, chief economist at Moody's Economy.com and an adviser to McCain. "That doesn't mean we shouldn't be talking and acting on these things now. I think the policy steps may reap benefits five, 10, 15 years down the road."

McCain opposes ethanol subsidies — not a popular stand in the nation's heartland — although mixed his criticism of such subsidies with a little pandering during a trip to Iowa last month, when he praised farmers in his audience as "the most productive, most efficient and the best. And I will open every market in the world to your products."

Obama, coming from the country's second largest corn-producing state, has supported such subsidies, although he has said the federal government might have to rethink its support for corn ethanol because of surging corn prices which hit the world's poorest people the hardest.

And while Obama is calling for reducing the influence of special interests, some of his top supporters and advisers are tied to the ethanol industry. Former Senate Majority Leader Tom Daschle of South Dakota is on the board of several ethanol companies and works at a Washington law firm where he lists advice to clients in renewable energy among his specialties. Obama energy adviser Jason Grumet previously worked at the National Commission on Energy Policy, a bipartisan initiative associated with both Daschle and former Kansas Republican Sen. Bob Dole, a big ethanol backer, according to a story in Monday's editions of The New York Times.

The price of retail gasoline could fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy-futures markets, four energy analysts told Congress on Monday.

Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy Consultants agreed with Masters' assessment at a hearing on proposed legislation to limit speculation in futures markets.

 Krapels said that it wouldn't even take 30 days to drive prices lower, as fund managers quickly liquidated their positions in futures markets.

"Record oil prices are inflated by speculation and not justified by market fundamentals," according to Gheit. "Based on supply and demand fundamentals, crude-oil prices should not be above $60 per barrel."

Futures trading in London has not been a major factor in rising oil prices, testified Sir Bob Reid, chairman of the Chairman of London-based ICE Futures Europe. Rising prices are largely a function of fundamental supply and demand, not manipulation or speculation, he said.

"Energy speculation has become a growth industry and it is time for the government to intervene," said Rep. John Dingell, D-Mich., chairman of the full committee. "We need to consider a full range of options to counter this rapacious speculation." It was Dingell's strongest statement yet on the role of speculators.

Dingell introduced a bill on June 11 that would ask the Energy Department to gather the facts on energy prices, including the role played by speculators.

Both major presidential candidates have supported closing loopholes that encourage speculation in the energy markets.

    With gas over four dollars a gallon here in America, Presidential hopefuls Barack Obama and John McCain are definitely doing some serious "gas pandering" in offering solutions to the energy crisis in our nation. The problem is most of their solutions are very long term solutions, which do ultimately have to be engaged but at present offer no real relief, except one, as I see it.  Speculations in oil commodities futures trading is a prime reason for four dollar a gallon gas and one hundred and forty dollar a barrel crude oil, in my opinion. The US House Of Representatives can solve this problem right now while the two Presidential hopefuls can continue their "gas pandering" to the fall of this year. It is in the best interests of America for the House of Representatives to move expeditiously in the study of the impact of oil speculating in the energy crisis and move to curtail or stop it completely. In my opinion, the government should  not seek to control free market enterprise unless the people of America are being exploited or cheated. Congress is within constitutional limits in banning oil speculation if such a business practice is not in the best interests of America.

tags: john mccain  barack obama  energy crisis  gas pandering  takebackamerica  politics  capitalism  business  us  2008  america  

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