Over on FiveThirtyEight, Nate Silver is arguing that there is little evidence that high oil prices reduce the chance of re-election for an American president, except indirectly as they affect GDP, inflation and unemployment.
Silver does highlight that a return to recession can be expected to significantly diminish President Obama’s re-election prospects. That’s the sort of political incentive that can favour urgent activity to encourage economic growth and reduce unemployment, potentially at the expense of the long-term stability of the economic system.
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“There is no rational reason for high oil prices,” writes Ali Naimi, Saudi Arabian Minister of Petroleum and Mineral Resources, in today’s Financial Times. Well, I can think of one– if oil prices were lower, the world would want to consume more than is currently being produced.