If the American economy is doing better (and I’d argue it really isn’t since the U6 unemployment measure remains obscenely high), why?

Robert J. Samuelson has the answer, and it has nothing to do with Barack Obama:

Since mid-June, crude prices have dropped roughly 40 percent, from $115 a barrel for the Brent benchmark to about $70 a barrel now. U.S. gasoline prices have fallen almost a dollar a gallon, from $3.63 in June to $2.74 in early December. These declines signal a massive transfer of wealth from producers to consumers, estimated at about $1.5 trillion annually by economist Edward Yardeni. Although the full implications are hazy — in part because it’s unclear where prices will settle — likely effects include a boost to the sluggish global economic recovery and political strains for some major exporters, including Nigeria, Venezuela, Russia and Iran.

Why is this happening? What does it mean? Here’s what we know.

The law of supply and demand did it. The price collapse mainly reflects too much supply chasing too little demand. Most analysts have focused onsurging U.S. production of “shale” oil, which has increased by 3.5 million barrels a day (mbd) since 2008, according to the consultancy IHS. But the U.S. expansion was widely anticipated, says economist Larry Goldstein. The real surprise, he argues, was lower-than-expected global demand. In early 2014, forecasters predicted growth of 1.3 mbd, says Goldstein. Actual growth is about half that, 700,000 mbd, reflecting unpredicted economic weakness in Europe, Japan and China.

The small shift in the supply-demand balance resulted in significant price changes, because oil demand is “price inelastic.” Modest surpluses and shortages can trigger dizzying price swings, because consumers’ needs — in the short run — are rigid. Shortages cause a scramble for supply; surpluses produce price plunges to clear the market. As it is, global oil consumption today is about 92 mbd, and available production capacity is about 95 mbd, says Goldstein.

Lower prices, if maintained, represent a huge consumer windfall. All countries that are net oil importers (most of Europe, Japan, China) should benefit, but the United States — given its driving and flying habits — should be an especially big winner. If crude prices decline an average of $25 a barrel, typical households could save $500 over the next year, says economist Mark Zandi of Moody’s Analytics. On the assumption that two-thirds of the windfall is spent, the economy would grow nearly 0.4 percent faster (that’s about $70 billion in a $17 trillion economy) and generate 350,000 jobs.

Cutbacks in oil exploration and development shouldn’t offset most of this stimulus. In theory, low prices could cause oil companies to scrap new projects because they have become unprofitable. This would dilute the effect of higher consumer spending. But for U.S. shale oil, the threat is modest, argued Daniel Yergin of IHS in the Wall Street Journal. He cited an IHS study, based on individual well data, finding that 80 percent of projects planned for 2015 are profitable with oil prices between $50 and $69 a barrel. (IHS assumes that prices will stabilize at $77 a barrel.) Longer-term, low prices would threaten costly deepwater and Arctic projects, Yergin said. But the effect would be gradual.

OPEC (the Organization of the Petroleum Exporting Countries) is not a working cartel. Cartels prop up prices by limiting supplies. If OPEC’s members — representing a third of global oil output — were a genuine cartel, they would have prevented the price collapse. OPEC didn’t because, says Goldstein, almost all its members want “to produce every barrel they can.” Only Saudi Arabia, its largest member, would trim production to raise prices. It refused to shoulder single-handedly the costs of being a cartel.

We don’t yet know how far prices may sink or when they might rise. For many producing nations, oil revenue constitutes a sizable share of government budgets. Will the squeeze cause social strife or political instability? Will it spur some (Vladimir Putin?) to become more bellicose to distract from a faltering economy? Will the damage cause OPEC members to behave like a real cartel? The oil crash is a big story in 2014. It might be even bigger in 2015.

As you know, the first goal of a political party is getting its candidates elected and reelected.

So when said goal isn’t achieved, as in last month’s elections, the circular firing squad forms.

So seems the case with the Democratic Party on how it handled, or mishandled, health care reform.

The Hill reports on outgoing U.S. Sen. Tom Harkin (D–Iowa), an example of addition by subtraction:

Sen. Tom Harkin, one of the co-authors of the Affordable Care Act, now thinks Democrats may have been better off not passing it at all and holding out for a better bill.

The Iowa Democrat who chairs the Senate Health, Education, Labor and Pensions Committee, laments the complexity of legislation the Senate passed five years ago.

He wonders in hindsight whether the law was made overly complicated to satisfy the political concerns of a few Democratic centrists who have since left Congress.

“We had the power to do it in a way that would have simplified healthcare, made it more efficient and made it less costly and we didn’t do it,” Harkin told The Hill. “So I look back and say we should have either done it the correct way or not done anything at all.

“What we did is we muddled through and we got a system that is complex, convoluted, needs probably some corrections and still rewards the insurance companies extensively,” he added.

Harkin said the sweeping healthcare reform bill included important reforms such as preventing insurance companies from discriminating against people with pre-existing conditions and keeping young adults on their parents’ health insurance plans until age 26.

He also lauded the law’s focus on preventing disease by encouraging healthy habits, something he contributed to by drafting the Healthier Lifestyles and Prevention America Act, which informed ObamaCare.

But he believes the nation might have been better off if Democrats didn’t bow to political pressure and settle for a policy solution he views as inferior to government-provided health insurance. …

Harkin’s comments come on the heels of a speech delivered by Sen. Charles Schumer (N.Y.), the third-ranking Democratic leader, last week questioning the wisdom of focusing on healthcare reform in 2009 and the start of 2010.

Schumer argued that Democrats should have continued to propose middle class-targeted economic programs in the wake of the 2008 financial collapse.

“Unfortunately Democrats blew the opportunity the American people gave them,” he said. “We took their mandate and put all of our focus on the wrong problem — healthcare reform.”

Schumer acknowledged problems in the healthcare system, including the plight of millions of uninsured people, needed to be addressed but argued that’s not what voters wanted when they elected President Obama in a landslide.

Harkin is one of the few people who seem to believe that more government involvement makes something better. Happily, Iowa voters chose differently in November.

Proof that ObamaCare didn’t make health care more affordable, nor did it help Democrats, comes from the New York Times:

The views of Democratic advocates of Obamacare notwithstanding, public opinion has generally sided with Schumer.

A United Technologies/National Journal Congressional connection poll of 1,013 adults in mid-November 2013 found that by a 25-point margin, 59-34, respondents said that the health care law (which includes a major expansion of Medicaid to cover anyone up to 133 percent of the poverty line, and subsidies for the purchase of private insurance for those between 133 percent and 400 percent of the poverty line) would make things better for the poor. But respondents also said, by a 16-point margin, 49-33, that the law would make things worse for “people like you and your family.” White respondents were even more critical, with 58 percent saying that Obamacare would make things worse for people like you and your family, and 63 percent saying it would make things worse “for the middle class.”

Exit poll data from 1994, after President Clinton’s failed bid to pass health care reform, as well as from 2010 and 2014, provides further support for the Schumer argument. In each of those three midterm elections there were huge white defections from the Democratic Party; in 2010 and 2014, there were comparable defections of senior voters. …

Insofar as Democrats try to reduce hostility to Obamacare, they face two problems. The first is a Republican Party unwilling to support any legislation making the A.C.A. more palatable. The other is the danger that tinkering with any of the provisions that have provoked the strongest opposition could eviscerate the legislation. Among the provisions that have stirred opposition are the requirement that most Americans get coverage, the tax on medical devices and the excise tax on expensive, high-quality private health coverage. Removing existing provisions would require replacing lost funding with new revenue sources, which could provoke anger from multiple constituencies.

As if Democrats do not already have enough trouble, data released by the Centers for Medicare and Medicaid Services shows that many, if not most, of the seven million people who purchased insurance through the A.C.A. will either have to pay higher premiums or higher deductibles, or submit themselves to the complex process of switching plans.

Even the person in charge of ObamaCare, Health and Human Services secretary Kathleen Sebelius, admits to the Washington Post:

“I think that I was the CEO of a big company with an important rollout and health care.gov was something that had been promised to work smoothly, to work like you were buying an airline ticket using your app on your computer. Instead it worked like buying an airline ticket using your fax machine.”

It takes another Democrat, William Galston of the Brookings Institution, to provide advice that Democrats might heed:

The American people are sending a large and urgent message to Washington: We want an economy that works for all of us, not just a favored few, and nothing we’ve heard from either party so far convinces us that you know how to get us there. Although it was a tactical mistake to reopen the muted intraparty debate over the Affordable Care Act, the broader point that New York Sen. Chuck Schumer recently made—that Democrats need to refocus on the well-being of average Americans—is incontestable. A presidential election that focuses on opportunity for the middle class and mobility for those working hard to reach the middle class is what the people want and the country needs. …

Looking to the past will not yield a winning formula for the future. Thoughtful Republicans understand that “Back to Reagan” is not enough. For their part, Democrats must resist the temptation to stir a jigger of populism into the policy brew of the 1990s and repackage the cocktail as an agenda for 2016.

Instead, we should spend the next two years debating answers to the questions that will define the country’s future. For example:

If the information revolution is transforming the labor market, how can we bring computer-science courses into every American public school?

If soaring costs are reducing college attendance and imposing large debt burdens on students, can we use technology to deliver high-quality postsecondary education more affordably?

If new businesses are a key source of innovation and jobs, what should we do to turn around the alarming decline in startups?

If basic research is both a public good and an essential foundation for long-term growth, where can we find the public resources for the sustainable investments in research that the private market will not make?

If the public sector can no longer muster the funds required to meet our infrastructure needs, how can we create incentives for private capital to fill the gap?

If we want a tax code that favors growth, job creation and opportunity for average Americans, what are the key ingredients of tax reform?

If a rising tide no longer lifts all boats, how can we ensure that average Americans share the fruits of 21st-century economic growth?

The country would benefit from a presidential election that addresses questions like these. If it doesn’t, the American people will be the losers.

Of course, Democrats won’t like some of the answers to these questions, such as improving schools by getting rid of teacher unions, improving the entrepreneurial environment by defanging the business (over)regulators, and finding money for better public use by reducing entitlements, and