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Tuesday, July 06, 2004

Saudi Plot to Help Bush: Pollkatz's Graph is Unconvincing

Prof. Pollkatz writes, "Bush's approval ratings go up and down with the cheapness of gasoline. It looks like maybe our election is in the hands of the Saudis." So there are two claims: (1) a strong relationship between gas prices and Bush's popularity, and (2) the Saudis are manipulating the price of oil to help Bush.

As proof Pollkatz offers this figure (note that gas prices are plotted on an inverted scale, so that when the gas index is higher, gas prices are lower).

Now it's true that Bob Woodward has reported that "Saudi Arabia's ambassador to the U.S. has promised President George W. Bush the Saudis will reduce oil prices before this November's election to help the U.S. economy." The Bush administration and the Saudis have acknowledged this, (though they deny any deal). So it may well be true that the Saudis are trying to help Bush, but a figure showing a correlation between oil prices and Bush's popularity provides no obvious evidence about Saudi motivation.

The figure does seem to show a correlation between prices and popularity. But there's a pretty obvious explanation about why the price of oil and Bush's popularity move together so strongly: it's because they're both driven by events in the Middle East, such as the U.S. invasion of various countries in the region. For example, Pollkatz writes, "Why did gas prices fall with the beginning of the Iraq invasion? Ordinarily, gas prices rise during Middle East crises." Uh, could it be that gas prices fell after it became clear that Saddam had been unsuccessful in sabotaging many of the Iraqi oil wells?

Ultimately, I don't deny that lower gas prices help Bush, but the effect is a lot smaller than the figure seems to suggest.

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