Consistency October 30, 2008
Posted by downwithabsolutes in US Politics.trackback
For years I’ve blamed George Bush and his oil-loving Administration for being responsible for the rising costs of gas. For consistency’s sake, I must also now blame him for the rapidly deflating cost of gas. Thanks, George!
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downwithabsolutes
Dominique
Mike Matthews
I’m in Washington, DC right now. The price of gas ranges from $2.37 – $2.59. I never thought I’d see it that low again around here.
I appreciate your objectivity in acknowleding the rapidly deflating cost of gasoline under George Bush’s watch. However, the blame for the increase in price or credit for the decrease do not belong to Bush, and he would probably be the first to say so. The cause and effect can be laid squarely at the feet of a free market, the laws of supply and demand.
When prices skyrocketed due to increased demand worldwide and in the US (and perhaps also to the decreased supply, thanks to the chicanery of the major foreign suppliers, most of whom don’t like us very much), the inevitable result was that we tightened our belts and started using much less energy. And this behavioral shift was so significant that it impacted the demand curve to the point of driving the price down.
If the Bush administration can take credit for anything here, it would be for staying out of the way and letting the market do what it does best. Other presidential wannabees and demagoguing politicians would do well to follow suit.
I’m hesitant to agree on that one, Leo. I think it had less to do with supply and demand and more to do with OPEC’s ability to take advantage of a largely inelastic demand curve.
You’re right. Thats the kind of thing I was referring to in my reference to the chicanery of the major foreign suppliers.
Gotcha.
OPEC isnt controlling the oil market….Wall Street and London is. GWBush has nothing to do with falling oil prices..watch as soon as the election is over the prices skyrocket again.
For consistency’s sake, I must also now blame him for the rapidly deflating cost of gas. Thanks, George!
I do believe there was some snark in here…
The economy sucks, no one can afford a damn thing, pump sales are down, investors bailed on just about everything except bonds. Did you see what happened the day the lending rate was cut? The dollar tanked and energy commodities spiked. Next day, back to the recent trend. To quote Clinton (and this is accurate right now): “It’s the economy, stupid.”
I think Mike was thanking George (and associates) for fucking up the economy so bad, that not even gas is a safe haven for hedge fund pirates.
Do you want to see oil prices go down even further? If Congress ever gets off its duff and passes a bill authorizing off-shore drilling (a real authorization, not the fake one they just passed) and drilling in ANWR, watch the price plummet even before a single drill rig is erected.
Leo,
Funny how the opposition drowns out sense.
The infamous 10 years before a drip of oil can be produced from our wells. No one wanted to listen that there are wells already drilled and CAPPED.
Drilled as exploratory holes.
Caps that get removed and oil flows.
Make it go lower, lets go to Nuclear energy.
I Imagine three or four Aircraft Carrier Nuclear generating plants, located near the port of Wilmington. Supplying New Castle County and the surrounding area.
Nuclear Waste, all of it goes to Yucca Mountain and the surrounding Desert, for inside and outside storage. Surrounded by a Military base, just like the Gold repository at Fort Knox.
And later, we refine the waste to new power.
The problem with domestic drilling is that the costs outweigh the benefits. We can take two scenarios for this one:
Scenario one: Domestic and offshore drilling becomes a regular market. Damage to the environment ignored (not that it should be), and ignoring the delay before having actual usable oil, the amount of oil we could possibly get (even the most generous estimates) hardly stand up to present consumption of oil in the United States. Supply isn’t terribly impacted, but let’s assume that the relatively shallow slope of gasoline’s demand curve actually sees a relative drop in prices in the U.S. market. OPEC would simply have to reduce its oil exports by a relatively marginal amount to neutralize America’s new advantage in the global market. Assuming they don’t, consumption of gas would likely increase, further harming the environment and prolonging the issue of moving to new fuel sources.
Scenario 2: We don’t drill in ANWR, offshore, or anywhere that we aren’t already drilling. We lose about 11 billion barrels of oil in opportunity cost — roughly enough to last us two years based on market behavior in 2006 and 2007. The pressure on the economy and the oil industry raises prices, prompting the advancement of alternative energies. Wind, for example, is an extremely viable option in the states due to the amount that blows over the Midwest and Plain States, let alone offshore areas like Delaware’s coast. I don’t think there’s much dispute that we need to move away from oil at this point, be it for environmental or economic reasons — why, then, are we spending our time on these simple “solutions” (procrastinations and workarounds, if you ask me) when we could just as well be building wind turbines and improving PV efficiencies?
And I do understand that the above argument doesn’t take into account the struggles of the middle class. I’m a Democrat, and I understand entirely that the middle class family is stretched thin. But even at the recent highs of nearly $4/gallon, gas consumption takes up a relatively small portion of our income. This is why the demand curve is so inelastic. People need gas, there isn’t a very viable substitute right now, it’s cheap compared to many other commodities (and liquids, for that matter), and the difference in prices between competitors is relatively small–a few cents at the most.
No one is suggesting that we can solve this problem just by more domestic drilling; we also need to do nuclear, wind, solar, alternative energies, etc. But domestic drilling is something we can do right away to buy us some time. And I again submit that just the psychological effect of doing so will drive the price down. OPEC can threaten to cut production as they have in the past, but they can only do that for so long. Sooner or later, self interest and greed take over and they start increasing production again.
I don’t know who to thank and I don’t care, but today on my way to Elkton,4 miles out of Newark I saw Gas for $2.25, I leave you all to figure out why, I just happily filled my tank.
with all the misleading information out there….
Can we be sure we ONLY have 11 Billion Barrels?
Only two years supply?
This Country in Functionally dead in its tracks.
No progress. Someone is always in opposition.
No one can be trusted.
And those that can be trusted are destroyed.
God Bless America.
.
Paul
no one can be trusted indeed