“Falling gas prices blunt Republican campaign attacks,” a July 28 Politico headline confidently blared. With roughly 100 days left in the midterm campaign cycle, the price at the pump has begun to decline after peaking at over $5 per gallon, robbing the GOP of a “lethal campaign weapon.” Democrats, meanwhile, have not let gas prices speak for themselves. “For American families looking for a little more breathing room, these savings matter,” Joe Biden crowed. Indeed, “falling gas prices” features high on the list of recent Democratic achievements—from neutralizing al-Qaeda’s leader in Kabul to the passage of climate-change legislation masquerading as an “inflation reduction” bill—that political handicappers believe has revived Democratic fortunes.
And yet, as NBC News reported last month, voters in competitive states and districts have not fallen to their knees in gratitude. The decline in gas prices “did not make up for how much money they were still spending on groceries, rent, and other basic goods.” That makes sense when you consider that the decline in the price of fuel isn’t a function of more supply coming online but a marked drop in demand for it. In that sense, the price at the pump is just another indication of how much America’s voters are hurting.
“The US summer driving season is a bust,” Bloomberg News reported on Sunday. According to their data, demand for gasoline is lower today than it was at this point in the summer of 2020, when Americans were either psychologically disinclined to venture out or simply had nowhere to go. That’s a departure from 2021, when summer driving season came roaring back, and it can’t be explained by rising rates of electric-vehicle ownership or new domestic capacity. After all, “a large proportion of US gasoline demand is discretionary,” Bloomberg noted. Potential drivers are simply choosing not to become active drivers.
The signs that wallets are tightening in response to undesirable macroeconomic conditions are especially evident in the energy markets. “Oil prices turned lower on Wednesday after the US Energy Information Administration said weekly oil inventories jumped by 4.5 million barrels last week, compared with expectations for a decline,” CNN reported last week. Also last week, the price of West Texas Intermediate Crude declined by nearly 10 percent, which is indicative of a “pullback” across the global oil market. As one energy trader told Bloomberg, “Buyers are content to sit on the sidelines until the broader narrative around demand improves.”
Democrats are certainly inclined to believe that the sentiments abroad that have led voters to tighten their belts is just a “narrative.” The White House has spent the last week arguing that the traditional metrics indicating that the U.S. is in a recession do not, in fact, indicate that the U.S. is in a recession. The blizzard of rhetoric with which the administration bombarded the public does not seem to have changed many minds. An ABC News survey released over the weekend found that two-thirds of Americans believe the U.S. economy is bad and getting worse. The same percentage of Americans disapprove of Joe Biden’s handling of “inflation.” Approval of the president’s handling of “gas prices” has increased by seven points from June, but that yields only an anemic 34 percent approval on the issue.
As painful as things are today, Democrats might have something to hang their hats on if a decline in overall demand helps restore something resembling affordability. After all, cooling consumer demand is the objective the Federal Reserve’s rate hikes are designed to secure. Although preliminary analyses of the “Inflation Reduction Act” indicate that it will actually increase inflation in the short-run and have next to no effect on the phenomenon in the longer term, the act of passing something that at least acknowledges inflation could redound to the Democrats’ benefit if declining demand does put sustained downward pressure on consumer prices.
While declining demand is one way to restore stability to inflated markets, it’s a sign of widespread hardship only the gauche would celebrate. For the better part of a year, the party in power has shaken an impotent fist at pump prices, leveraging every gimmick in the book to reestablish affordability. From slashing sales taxes to providing taxpayer-backed gasoline refunds to tapping into America’s strategic petroleum reserves, Democrats have tried to combat the problems associated with low supply and high demand by subsidizing demand.
It’s no surprise that these strategies failed on their own terms, but what’s working to reduce demand—higher costs—is no treat either. Moreover, at just over $4.00 per gallon, the national average price of regular gas remains prohibitively costly. Daily commuters who cannot simply forego that summer road trip must eat these costs, and they’re unlikely to take well to those who call this an accomplishment and then demand gratitude in return.