“think about what the governor just said. He said when I took office, the price of gasoline was $1.80, $1.86. Why is that? Because the economy was on the verge of collapse, because we were about to go through the worst recession since the Great Depression, as a consequence of some of the same policies that Governor Romney's now promoting.”
Gas prices were low because the country had not yet collapsed?
It is true that Romney promotes the policies that caused the recession.
Not likely. From my understanding, recessions include exceptionally high prices, like we have now. This is usually due to a lack of consumption, and then prices inflate to compensate for lost capital. Obama has confused his cause-and-effect from what I can see.
???
Then how does he explain the prices now? Are things so much better now than they were then?
lol ya laughed when i heard obama say that. no it doesnt make sense.
He is suggesting low prices is an indicator of an upcoming recession. straight retarded.
Im beginning to see arguments kind of like this from the keynes crowd because there is no other way to explain an inflationary recession that doesnt put the blame completely on their economic policies.
prices naturally go down during recessions to clear the market of goods
tab - you should read a little on supply and demand. prices cant go up due to a lack of consumption. If people wont buy at low prices then you are suggesting they would buy at higher prices?!?!
It is economically unsound for a business to raise prices and cut production. they have already purchased the capital goods to maximize production at that production rate. to cut production would make those capital goods idle. Waste!!! The recession triggers companies to cut areas of production that are less profitable to areas that are more profitable in the current economic condition. By suggesting that prices are able to rise to maximize profit would mean that there is a greater demand for that product which is in direct contradiction to what you said.
CuriousGeorge: “think about what the governor just said. He said when I took office, the price of gasoline was $1.80, $1.86. Why is that? Because the economy was on the verge of collapse, because we were about to go through the worst recession since the Great Depression, as a consequence of some of the same policies that Governor Romney's now promoting.”
I thought that was a particularly clever bit of obfuscation when Obama said it. Made me very angry. It's calculated to merely sound plausible. That's all his partisans need is a reason to believe. Not like Romney's much better, but that, that was a cold hearted lie. He knew he was lying when he said it. It's not possible that their campaign didn't spend time coming up with a way to spin gas prices. Gah. Hate politics so much. The best liar wins. That's it.
I'm gonna stick up for Obama on this one (as much as it pains me to). Lehman had already collapsed in September of 2008, and by the time Obama took office in January 2009, the crap had already hit the fan. From July 2008 to December 2008 oil went from $145 to $30. This was directly related to the other stuff that was going on at the time (banking crisis).
The only problem with what Obama said was the phrase "on the verge of collapse." If he would have said the collapse had already happened, and that oil dropped because of that, he would have been correct. I think that is probably what he was getting at.
Prime: I'm gonna stick up for Obama on this one (as much as it pains me to). Lehman had already collapsed in September of 2008, and by the time Obama took office in January 2009, the crap had already hit the fan. From July 2008 to December 2008 oil went from $145 to $30. This was directly related to the other stuff that was going on at the time (banking crisis). The only problem with what Obama said was the phrase "on the verge of collapse." If he would have said the collapse had already happened, and that oil dropped because of that, he would have been correct. I think that is probably what he was getting at.
The timing on that collapse was so perfect to help Obama get elected, I can't help but wonder if it wasn't in part engineered. Best october surprise ever. and the result was the left got enough political capital to pass socialized healthcare--a once in a generation opportunity where they controlled all organs of government and filibuster proof majorities, barely.
But his characterization of causes of oil prices is silly.
Well remember that Keynesian policy requires that prices rise. Falling prices are bad because people can save that excess money *gasp* as opposed to spending it. This of course is the fatal assumption that steers government policy, which flies in the face of real recovery.
When a market goes through a boom, overproduction and malinvestment results in excess resources. When the bubble finally pops, demand for these resources plummets and their prices fall accordingly. This actually helps people cope with the resulting unemployment and lower wages. Since companies can now make these cut backs, they can begin to accumulate capital and finally invest in productive resources. Eventually one of these resources will be labor and we will see a revival in employment.
So the low gas prices were not a sign of a coming crash, but the result of the crash. The low prices would've helped the average man deal with the recession but Mr. Obama instead chose to "stimulate" demand, raising prices sharply. This is similar to the destruction of crops during the Great Depression in order to raise food prices to help farmers stay employed. Never mind the ones that went hungry as a result, there were jobs to worry about. Similarly now, we are worried only with getting people employed, regardless of the cost of living increases.
Perhaps the greatest irony: According to the adminastration the low gas prices were bad and a result of the failed policies of Bush that caused the recession and the high gas prices now are bad and a result of Bush's failed policies that caused the recession. But when the gas prices fall it is because Obama's policies are working and it is a sign of the success of Obama's policies that they are no longer so low. The doublespeak astounds me.
walton - What?! you just turned bizzaro world in that second half. how in the world is a rise in price to record highs a sign of success? what are you smoking? Prices naturally FALL in the long from by competition and technological advances.
"Obama instead chose to "stimulate" demand, raising prices sharply" - WTF are you talking about? source.
grant.w.underwood: "Obama instead chose to "stimulate" demand, raising prices sharply" - WTF are you talking about? source. Why do you find that bizarre Grant? The economy crashed, oil bottomed, then Obama took action via bailouts, money printing, etc... to keep the party going. Oil shot back up. This was a typical Keynsian response. Why would Walton have to source anything for you to believe it? | Post Points: 20
w - haha k i get whats going on here now. ya i think i was confused with how the second half was written.
prime - it wasnt saying aggregate pricing, but oil pricing. This isnt communist russia here, the president doesnt set prices yet. so yes, i wanted to see a source of obama choosing to manipulate one of America'smost transparent markets by changing its price