Oil Prices Historically Important In Elections
AUDIE CORNISH, HOST:
So what are the political consequences for pricier gas at the pump? Here to talk about that is Jim Tankersley, the economics correspondent for the National Journal. Welcome, Jim.
JIM TANKERSLEY: Thanks for having me.
CORNISH: So, how much of a threat are high gas prices to a president seeking reelection?
TANKERSLEY: Well, they can be a big threat, especially as part of what I would call a bank shot approach to the economy. And here's how it works. If gasoline prices spike, then that can have a real affect on economic growth and if growth slows down, that can really impede a president's path to reelection.
CORNISH: Let's look at the history of this. Can you give us some examples where an incumbent's loss has correlated with a spike or generally high gas prices?
TANKERSLEY: Sure. And it's important that we say at the beginning that there's not a lot of deep research suggesting that any one president has lost his job because of high gas prices, but there is some evidence that it has played a factor. Probably the best known example is Jimmy Carter. Gas prices spiked in 1979 over the Iranian hostage crisis and he had this, you know, the famous malaise that America's economy was going through, which allowed President Reagan, then Governor Reagan, to use to defeat President Carter in 1980.
CORNISH: Right. We actually have a sound from his speech, the crisis of confidence speech in July of '79.
PRESIDENT JIMMY CARTER: Almost half the oil we use comes from foreign countries at prices that have gone through the roof. Our excessive dependence on OPEC has already taken a tremendous toll on our economy and our people. This is the direct cause of the long lines which have made millions of you spend aggravating hours waiting for gasoline. It's the cause of the increased inflation and unemployment that we now face.
CORNISH: And as you said, President Jimmy Carter is the example people cite the most, but some economists have sort of questioned this link.
TANKERSLEY: It's pretty difficult to pin everything on gas prices because there's so many factors that affect a president's reelection chances. Now, there's a lot of research out there suggesting that there is a real correlation between the strength of the economy and the strength of a president's reelection prospects. But as we saw with President Carter, there was a lot else going on.
There was that Iranian hostage crisis. There was that stagflation happening. These are factors that complicate the effective gas prices, but also should give President Obama a little bit of hope looking forward to whether high gas prices might effect his reelection this year.
CORNISH: So is it really the gas price that we care about or is this really about what those gas prices say about the state of the economy at any given moment and whether voters blame the sitting president for it?
TANKERSLEY: Yeah, I think it's the latter and I think that it's a lot about feel. If you're feeling like things are going well and then suddenly gas is 4 or $5 a gallon, that's going to deal a large blow to your confidence, your consumer confidence and your voter confidence.
CORNISH: So the question, it seems, is not whether the White House should worry, but how much?
TANKERSLEY: Yeah. And I think it's a good question and maybe there's some evidence that they don't have to worry as much this time around as past presidents might. For one, there's evidence in the polling that Americans are getting used to high gas prices, that they've come to expect gasoline to be more expensive than it has been in the past.
And secondly, there's evidence from a number of economists - most recently this week, Deutsche Bank put out a paper this week - suggesting that the American economy has grown more resilient to high gas prices, in part because we just use less oil per person than we used to.
CORNISH: Okay. This is news to Republican challengers, I would think, because they're very much going after the president about gas prices. I mean, obviously, they feel this is a winning argument.
TANKERSLEY: It's a very traditional Republican argument. Remember, though, that they used it in 2008, the drill, baby, drill strategy, that did not work for John McCain against Barack Obama. And Americans do want more domestic production going back to President Carter and even before. The question is, will people blame President Obama as much as they blame, say, oil companies, which the polling tends to show are the ones that people blame the most when gas prices get high.
CORNISH: Jim, thank you so much for talking with us.
TANKERSLEY: Thank you.
CORNISH: Jim Tankersley covers economics for the National Journal here in Washington.
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