Gas prices redux

Nice column from Yglesias on gas prices and politics:

A good rule of thumb is that if politicians are talking about the price of gas, they’re talking nonsense. This week is no exception.

Boehner’s line is a good place to start. Gas prices are indeed way higher than they were on Inauguration Day. That’s in part because the winter of 2008-09 was the cheapest moment for gas prices that we’ve seen in years. Do we remember what else was going on back then? That’s right—a global financial crisis that tipped the entire world into recession.  It turns out that driving to work, ferrying stuff from the warehouse to the store, hauling containers across the Pacific Ocean, and flying around to meetings all takes oil. If you manage to orchestrate a situation in which millions of people lose their jobs, retail sales plummet, stores close, and economic activity generally grinds to a halt, this frees up a lot of extra oil. Cheap oil leads to cheap gasoline, so if you did have a job at the depths of the recession your commute got cheap.

And good for you. But this should all serve as a reminder that there’s little constructive action the American government can take to lower the price of gasoline.

What’s more, while voters would obviously prefer cheaper gas to more expensive gas, there’s little reason to believe that expensive oil per se is a sign of political trouble for the president. Last—but by no means least—it can’t be emphasized enough that gasoline is actually unusually cheap in the United States in a way that’s problematic for our economy over the long run…

Conversely, increased global supply of oil would be economic good news. But it’s simply not true that Obama’s policies are curtailing oil production. On the contrary, U.S. oil production tumbled during the Bush administration and has skyrocketed under Obama. Obama really has hurt the oil industry by declining to approve  the Keystone XL pipeline, but as the point of this pipeline is to facilitate the export of fossil fuels its construction would, if anything, make gasoline more expensive.

Meanwhile, nothing Santorum or Boehner or Gingrich or Obama says is going to change the fact that the United States is an increasingly small part of the global demand picture. When China, India, or Brazil get richer, their citizens start trading bicycles for scooters and mopeds for cars. They’re flying more airplanes. This increases the global demand for oil and pushes prices up. All else being equal, this is inconvenient for American drivers. But it’s far from clear that it’s on net harmful to the American economy. American firms are hoping to export goods and services to rapidly growing economies. Every time Boeing sells a plane to an Asian airline, that increases the demand for jet fuel and makes driving marginally more expensive. But we’re better off in the fast-growing world than in the slow-growth, cheap-gas world of three years ago.

Short version: 1) no, rising gas prices are not going to singlehandedly submarine Obama’s re-election prospects and 2) short of changing gas taxes, there is very little that American politicians can do to affect the price of gas in a significant way.


Health care in 3 charts

So, this week was time for me to update my health care policy lecture for the first time in three years.  Much updating to be done.  For starters, I hit upon a much better way to start.  I simply show what’s wrong with health care in the US in three charts and once the scope of the problem is obvious  the rest of the lecture is how we got here and what we can do about it.

So, to start, cross-national per capita health care spending is pretty damning.

Exhibit 1

Of course, if that were resulting in us being way healthier, maybe it would be worth it.  Back in the old days, I used to show a comparative life expectancy chart (we don’t fare so well), but since becoming a quasi health care wonk thanks to years of reading Ezra and Jon Cohn, I realized than health care amenable mortality is the way to go.  So, that’s next.  In short, despite all that spending, Americans die at much higher rates from things that could have prevented with proper health care treatment.

Nolte 2nd ITL chart

And last, we don’t even bother to get all Americans covered with this extra spending.  I had to make this chart myself.  Nobody bothers assembling a chart where basically all the countries but one are at 100%.

The Affordable Care Act ain’t perfect, but I can guarantee you Health Savings Accounts and buying insurance across state lines aren’t exactly going to solve these problems.

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