The way things are going, the next presidential campaign -- for the 2012 election -- will begin this December. There could at that point be an incumbent who wants to return to office.
Here's a way to measure whether that will be deserved. It's all in the price of oil.
As of this writing, it's trading at around $90 per barrel, up some from the under $87 per barrel last week but down from the fairly recent all-time high of more than $100 per barrel. At today's price, or even last week's, it's harmful to our economy. Even more, the high price of a barrel of oil is indicative of some of the world's troubles which, if they spread, could impact whether there will be enough crude to meet world demand.
Therefore, the next president of the United States should aim to push oil prices down to around $60 before his, or her, first term is over. If successful, that term will have been a very good one and will be deserving of re-election. One would think that even lower prices, like the $20 and $30 prices of President Bush's first couple years would be desirable, but we do have a domestic industry that's coming to life and taking their incentive away completely would be unproductive.
Here's what our world would look like with oil prices down by at least a third:
1. The inflated current price stems mostly from the war in Iraq and our disagreements with Iran. They lead to worries of wider conflict in the region which could seriously cut down on oil production and transport. Both issues will have to be resolved successfully for investors to either not worry so much, or use them as an excuse.
2. Our next president will need to take a fresh look at our relations with Saudi Arabia and Russia, and continue our rope-a-dope with Venezuela. President Bush has looked upon the Saudi royal family and Vladimir Putin through rose-colored glasses, the former because of longtime family relations and the second because of simple poor personal judgment. The Saudis are not our friends and have not been helpful, and neither is the Russian government. Neither is Hugo Chavez of Venezuela, but we know that. The new president will have to deal with them and let them know that we disapprove of their existence, and will from now on deal with them realistically. With both sides looking at each other with clear eyes, we should be able to establish both national and business relations that are on firmer footing.
3. Lower oil prices will also require less demand from the United States and Europe to make up for increasing demand from China, India and other developing countries. That will mean we've become more serious about conservation and the development of alternative energy sources. That's nothing but a good thing.
4. Less demand for oil will also mean that Americans are moving away from SUVs and huge pickup trucks and into more economically sensible vehicles, including hybrids. Maybe some fuel cell vehicles will be viable by 2012. We'll be smarter, greener and have more money left in our pockets.
5. Lower oil prices will also mean that development of U.S. domestic fields will also have been successful. While business incentive comes from higher production, the added product on the market and lower transport costs will keep the per barrel prices lower.
Significantly lower prices will also impinge some of the world's troublemakers, like Iran, Putin and Chavez. That means less support for terrorism, a lower probability of a Islamist state acquiring nuclear weapons, less opportunity for Stalinist resurgence in Europe and containment of hard-left gains in Latin America.
So it's all good. Cutting the price of a barrel of oil significantly should be the primary foreign policy goal of the United States in the coming years, and the next president's re-election prospects should be rated on how successful he was in that regard.
