Larry Kudlow
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The recent spike in oil prices and unemployment is dramatically changing this presidential campaign -- virtually overnight. The near $20 jump in oil to $140 a barrel, the unexpected half-point increase in the jobless rate to 5.5 percent (the biggest monthly increase in twenty years), and the resulting 400-point plunge in stocks has created a new campaign issue right before our eyes.

Public worry number one is now oil, jobs, and the economy, with the inflationary woes of the U.S. dollar right underneath. The candidate who can connect with these issues will win in November. But so far neither Obama nor McCain are dealing with the new political reality.

In fact, it’s all about oil right now. The price has doubled over the past year while the economy has slumped.

But here’s an eye opener. Recent polling data from Gallup show the percentage of voters blaming oil companies for skyrocketing gasoline prices has dropped from 34 percent to 20 percent over the past year. At the same time, support for more drilling in U.S. coastal and wilderness areas has increased to 57 percent from 41 percent.

And the candidates remain blind to these shifts.

Obama continues to lambaste oil companies while congressional Democrats push for cap-and-trade. They’re missing the point, big time. The public wants more energy and more fuel to cut high prices and spur economic growth. But the costly cap-and-trade plan would produce less fuel and less growth. It would only raise gas pump prices while mounting a Gosplan-type taxing, spending, and regulating program that would be the moral equivalent of Hillarycare on nationalized medicine.

Sen. McCain has an opening here. Yet he, like Obama, would have voted for cap-and-trade, which went down to defeat in last week’s Senate vote. And while Mr. McCain favors some off-shore production and has been strong on nuclear development, he is against drilling in ANWR Alaska.

Then there’s the oil nobody is talking about. The Bakken fields beneath North Dakota, Montana, and Canada hold an estimated 400 billion barrels of oil. In comparison, Saudi Arabia’s biggest field, Gahawar, has an estimated 55 billion barrels, while ANWR has an estimated 10.4 billion barrels.

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Larry Kudlow

Lawrence Kudlow is host of CNBC’s “The Kudlow Report,” which airs nightly from 7 p.m. to 8 p.m.