The US electorate may not realize it, but oil will play a central factor in the US Presidential Election, a fact of which candidates Obama and McCain are only too aware.
People have many reasons for voting the way they do. However, economics and the confidence that individuals feel in the national financial situation often is of great influence. In particular, the economic policies that candidates champion will influence how rich a voter considers they will be by voting in a certain way.
The value of the dollar influences how much Americans can afford to buy and thus how rich and financially confident they feel.
The correlation between oil and the dollar can not go unnoticed. Crucially, oil is traded in dollars and thus its demand and price levels are of the highest importance.
Every dollar increase in the price of imported oil increases the size of the U.S. trade deficit, which puts downward pressure on the value of the U.S. dollar. In response to the weaker dollar, OPEC countries raise the dollar-denominated price of a barrel of oil to maintain their oil revenues, and so the spiral continues.
The dollar’s value effects every transaction within the country, thus oil can be said to affect American people’s everyday lives and thus the American vote, although the link may seem tenuous to many of the electorate.
It is in America’s interest to lower their dependence on imported oil both for financial and political reasons. Money aside, America has other motives for wanting less oil imports. The nations that America import from are far from allies. Many oil exporters have expressed their dislike for America and have been proactive in forming alliances with other likeminded nations. The way in which America sources its oil influences its global political position.
Both presidential candidates are keen to lower US dependency on imported fuel although their plans for doing so differ. Obama’s preference is to lower the demand for oil by making products more fuel efficient and finding alternative energy sources. In August, he was adamant that "breaking [America’s] oil addiction is one of the greatest challenges our generation will ever face." Interestingly however, since the financial crisis gained pace, he relaxed his position on this matter realizing, as McCain may have already foreseen, that voters concerns are currently elsewhere.
McCain’s strategy seeks to fill the supply gap by using oil sourced close to America’s shores. The recent collapse of the offshore oil drilling ban close to American coast has opened doors for McCain’s policies to be taken seriously.
If confidence was higher and cash easier to find, Obama’s policies would perhaps be more desirable, but the current financial climate may perhaps be to McCain’s advantage. After all, during crises, morals tend to go out the window and personal survival is of primary importance. Obama’s policies are expensive and based on the longer term. What voters want now is some stability and assurance. Obama’s more eco-friendly proposals offer little to the here and now.
So, the link between oil and the 2008 Presidential election has been made and the extent of its importance is clear, at least to outside observers. Whilst oil may not be the obvious deciding factor, it could account for more in the ballot box than many may realise. Is it therefore possible to make predictions based on this perception? One could argue either way. The priorities of voters in this election are likely to have changed in recent months and as stated earlier, finances are a primary concern. McCain offers lower taxes and cheaper fuel while Obama does the opposite. However, McCain is a member of the incumbent party whose popularity has waned severely in recent years. This should give Obama and his supporters considerable hope. With the financial situation as it is, Americans want change and may not associate this with McCain. Obama’s fresh input could just be what voters are so urgently seeking.
Author: Jo Amey
