Gasoline prices keep going up and the consumer is getting hammered with gas well over three dollars.  In 2008 the soaring cost of energy was the fuse that kicked off the US recession that was ultimately driven by the financial crisis.  Both issues were made worse by the federal government's interference in the marketplace.  The US economy is set for a repeat of 2008 because the White House never learned from the root causes of the recession.

The unrest in the middle east showing no signs of abating and international bad boy Iran is being as provocative as it thinks it can get away with. The US seems frozen by indecision and shows no clear leadership on the middle east protests for self determination.  These facts invariably mean that oil prices will continue to be extremely volatile, and large consumers (like airlines and power producers) will hedge their bets by buying and hoarding as much as they can afford.  Gas prices are going to continue to be pushed up and the economy is going to suffer as a result.

Some of the volatility in the market place could have been avoided if we had a President that took energy production seriously. Instead the US government turned on its proven energy producers by canceling oil and gas leases and threatening a carbon tax scheme that discouraged investment. Through regulation and red tape millions of acres of potential oil and gas reserves are now off limits to exploration. The Obama administration used the BP oil spill as an excuse to illegally hamstring domestic energy production, even going so far as to lie about what experts had recommended.

President Obama with the help of its democratic majority in both houses of congress poured millions of dollars into "green energy" companies like Solyndra that later laid off workers and closed one of its plants.  The President ignored ample evidence that his green jobs initiative wouldn't work, and has spent billions.  The money spent hasn't moved the US one inch closer to energy independence. 

Some commentators question if these actions are some part of a master plan to raise gasoline prices to make other forms of energy competitive. The problem with that analysis is that it assumes that President Obama understands the economics of his decisions. Based on his public arguments for health care reform, green energy, and unemployment, I have to assume that the President just doesn't understand the consequences of his actions. He is an idealist and will not be swayed by the reality on the ground until that reality effects his re-election chances or the consequences get so dire that they can be no longer ignored (See tax cuts, Guantanamo, predator drones, etc).

Oil and gas production is a long term play, with up to five years between the discovery of oil and the build out of sufficient infrastructure to bring that oil to market. Even if Obama had fully embraced domestic energy production, the country still wouldn't be in an energy independent position.  The difference is that we would be two years closer, and more importantly there would have been thousands of jobs created that would not have to be subsidized by the tax payer. The President would have shown strong leadership that would have eased market place fears if he had endorsed a strong domestic production agenda. The price for market confidence can't be over stated in an environment where fear drives speculation.

Alas the President traded a long term strategic vision for a short sighted, short term political gain. Unfortunately we are all paying for that short sightedness right now.  When the economy stumbles President Obama will also pay, at the ballot box in 2012, and he will have no one to blame but himself.

 Aaron Gee is a U.S.-based IT consultant who started the blog foundingideals.com.