Here in Southern California, in the summer of 2008, gas prices reached $5. a gallon. That's SUMMER, when prices usually peak. We are still in winter. Back then we didn't know what to expect next as the brunt of the economic catastrophe had not been felt by Wall St. For the media, nothing is real unless it is bemoaned by Wall St and the rich. When they started to feel it, then and only then was was the economic downturn a national catastrophe. Sure Exxon was making record profits while the nation suffered, but that's the way it goes.

So here we are again. I myself have made adjustments. I got rid of my SUV, and a large truck and have never looked back. I am better prepared. Gasoline prices may vary up and down slightly, but gas prices will keep going up. We are conditioned now to pay more. Once we are conditioned, it's the green light to keep pushing them up. They will NEVER go down again significantly. There are a lot of factors why not, but get ready. The gasoline era as we know it is officially over.

[Edited 2/20/12 8:35am]

Time 4 me 2 get a Honda or something like it.

If we think gas prices are high now, I can imagine what will happen if/when Israel attacks Iran. Prices will go through the roof and the entire world economy will go bonkers. Iran would probably retaliate attacking it's oil producing neighbors, and anyone with any monetary interest in the price of oil will be manipulating, milking it and loving it. I don't even want to think about it.

[Edited 2/20/12 15:12pm]

You know what this means?

Republicans and Iranians are now allies in the same cause, against the same guy.

I understand that they are trying 2 push the perm price right around $5.00/gallon by year end.

via The Wahington Post

http://www.washingtonpost..._blog.html

Will rising gas prices sink Obama?

Posted by Brad Plumer at 01:40 PM ET, 02/21/2012

It’s not even summer yet, and gas prices are already soaring. The national average for a gallon of gasoline hit $3.57 this week. So what’s causing the spike? And could high gas prices end up demolishing President Obama’s slowly recovering poll numbers?

Here’s what keeps David Plouffe up at nights. (Todd Weddle/AP) By and large, the current price of gasoline isn’t some deep mystery. Global oil prices are at a nine-month high of $105 per barrel right now, in part because of tensions with Iran and in part because available crude resources can barely keep up with growing demand worldwide. When oil gets pricey, gasoline gets pricey. What’s more, a number of U.S. gasoline refineries closed early for maintenance this year, causing pump prices to spike higher in places such as California. (The rising price of crude has also forced some unprofitable refineries to shut down in recent months.) While some analysts argue that speculative hedge fund money is driving up gasoline futures, global forces still appear to be the prime suspect.

Republicans are hoping to use rising gas prices as an election-year issue against Obama, even though there’s likely very little U.S. policymakers can do to affect gas prices in the short term (domestic oil demand is lower than it was in 2007, while production is way up — yet gas prices are still high). “This debate is a debate we want to have,” John Boehner told his caucus, according to the New York Times. “Certainly, this summer will see the highest gas prices in years. Your constituents saw those reports, and they’ll be talking about it.”

But it’s far from clear whether the rising price of gasoline will actually sway November’s elections. Last year, Nate Silver looked into this question and found that “there’s not a lot of evidence that oil prices are all that important” a factor in presidential elections. True, Jimmy Carter lost the White House when gas averaged $3.37 per gallon (in today’s prices). But Ronald Reagan won reelection handily when gas averaged $2.51 — which was, at the time, the second-highest price ever in an election year.

And what about approval ratings? Do high gas prices cause voters to sour on the party that’s currently in the White House? There’s an old graph (seen below) showing an almost-preternatural link between George W. Bush’s poll numbers and gas prices during his two terms. Chris Bowers dubbed it “one of the most important statistical projections for American politics, ever.” But Brendan Nyhan dissected the chart and found that it didn’t hold up to scrutiny. After you control for the effects of September 11 and the Iraq invasion, Nyhan writes, “the relationship that we observe during Bush’s presidency seems likely to be a statistical artifact. It is very premature to call gas prices the ‘strongest factor’ affecting approval.”

Now, that doesn’t mean gas prices are inconsequential. Far from it. One thing Nate Silver did find was that a president’s reelection chances are very tightly correlated with election-year GDP growth. And there’s ample reason to worry that surging oil prices could whack the U.S. economy. Higher gas prices at the pump tend to mean that consumers are sending more of their dollars overseas, leaving them with less money to spend on goods and services here at home. The Energy Information Administration estimates that a $20 increase in the price of a barrel of oil causes U.S. GDP to decline 0.4 percentage points.

So the real question is whether gas prices will crimp the broader recovery. That’s not a simple question to answer, as there are a lot of variables to consider. An economic slowdown in China, for one, could ease the pressure on oil prices. The recent mild winter means that consumers in the Northeast have been spending somewhat less on heating oil. Low natural gas prices are holding down resource costs for many companies. And, as we’ve discussed before, Americans have been driving less and buying more fuel-efficient cars as higher gas prices become the new normal (each year since 2008 has seen a growing share of days with gas above $3 per gallon). It’s a slow process, but Americans seem to be adapting to the era of pricey gasoline.

There’s also the Federal Reserve to consider. As the Wall Street Journal recently reported, an oil shock could make the central bank jittery about rising prices, even if it’s only temporary inflation. That, in turn, could complicate the Fed’s willingness to stimulate the economy further. Another round of quantitative easing could well become less likely if oil prices keep nosing upward. “In the past,” the paper explains, “the Fed has been willing to look past temporary spikes in inflation, but it isn’t clear that it would be willing to do so again.”

So it’s far from certain that high oil prices will sink the current recovery — or swing the 2012 election. But it’s something to watch closely.