Updated: July 12, 2011 2:08AM
Oil prices hovered around $95 a barrel Monday — about where they were two weeks ago when President Barack Obama ordered the release of 30 million barrels of oil from the Strategic Petroleum Reserve to force down fuel costs. Chalk up another White House economic initiative that turned out to be ineffective.
Part of a reserve created to safeguard the nation during an oil crisis was expended for political purposes and it failed. Oil prices were up to $99 last week but have trended lower, not due to Obama’s order, but because a bad U.S. jobs report and weak demand from a troubled world economy. At least the White House is not claiming the oil release kept things from getting worse.
That’s been its argument for the $830 billion stimulus bill to explain away its failure to achieve the goal of keeping unemployment below 8 percent. In his Monday news conference, Obama unintentionally highlighted the failure of the stimulus. He noted that the rise in unemployment to 9.2 percent last month stemmed from job losses among state and local governments coming with the phase-out of stimulus spending. It was confirmation of the chief criticism of the American Recovery Act — that it mainly protected public sector employees while doing little if anything to help the private market economy.
The oil release and stimulus aren’t the only blanks fired by Washington. The Federal Reserve spent $2.3 trillion in two rounds of “quantitative easing,” buying up mortgage bonds and Treasury debt, and yet the economy feels more like it’s in a recession than a recovery. The 14 million Americans without jobs and those working part time who push the unemployment/under-employment rate to 16 percent find it hard to believe the recession technically ended two years ago.
Push is coming to shove over the administration’s avalanche of spending as the White House and Congress grapple with the issue of raising the national debt ceiling. Obama told reporters the deficit/debt problem is something the politicians have talked about for a long time while doing nothing about it.
Well, he’s been AWOL too. The co-chairmen of his deficit-reduction panel late last year presented the president with a golden opportunity to take the lead on the issue. The recommendations of Democrat Erskine Bowles and Republican Alan Simpson were comprehensive and called for painful measures from both sides of the political divide. Yet, they were fair enough to earn the endorsement of Dick Durbin of Illinois and Tom Coburn of Oklahoma, respectively one of the most liberal and one of the most conservative members of the U.S. Senate.
But Obama declined to embrace this commonsense approach. He could have started the discussion on the deficit last winter instead of waiting until this summer and a looming Aug. 2 deadline on raising the debt ceiling. But he punted and failed the test of leadership. Now, he’s trying to assume that mantle.
Obama talked Monday of the need for compromise to reach a solution. That had to sound a hollow ring for Republicans who recall how Obama and the Democrats shunned bipartisanship as they jammed through Congress on a party-line vote their cherished goal of remaking American health care. ObamaCare is not only unpopular with a huge swath of the electorate and constitutionally suspect, it foists on business massive new job-destroying regulations and costs.
Add to that the Democrats’ other new regulations on business, the administration’s hostility to oil drilling and coal, the NLRB’s assault on Boeing’s new plant in right-to-work South Carolina, the NLRB’s heavy-handed promotion of union organizing, and the White House’s anti-business rhetoric against “fat cats” and “millionaires and billionaires.”
Obama says the debt ceiling fight casts uncertainty for business, impeding economic growth. That sounds like buck-passing from the actual culprit — his own policies.