Energy and the economic recovery

Yes, employment numbers are moving up, but there is some other sobering news: Unemployment is still 8.3 percent and will remain above 8 percent until Election Day; at the pace we’re on we won’t get back the jobs lost in the recession till 2020 or so, and we still have a vast number of long-term unemployed and the absolute number of employed people is still below pre-recession levels.

This is not the gaining-strength recovery of 1984 that propelled Reagan to reelection. Is it good enough? Who knows. I think it depends on many unforeseen factors: what become the issues the candidates espouse and real-world events between now and November.

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The most worrying factor for diehard Obama fans has got to be energy prices and the position he’s staked out to date. Essentially, the president is saying U.S. supply doesn't matter as there is a world market for oil. True enough, but as the Iranian threat to close the Strait of Hormuz illustrates, the real factor is not global supply but secure global supply.

Oil that is developed in the United States and its offshore regions is not subject to the geopolitical uncertainty of Gulf oil. I don’t think our president wants to make the case that in a scenario where Gulf supplies are interdicted, the oil and natural gas that could be developed here would be inconsequential. Not to mention the salutary effect on futures prices of U.S. drilling or the fact that the thousands of jobs created would be here in the United States.

Supply always matters to the determination of price, and President Obama has staked out a loser position — especially as gas prices peak in the summer driving season. My guess: expect our president to find a symbolic (and easily reversible) means of caving in on the U.S. supply issue for electoral purposes. The GOP candidates, and eventually the nominee, should hammer him unmercifully on this issue. It’s a winner.