"gas tax holiday"

[Guest Economics Student]

Give me a break. We Americans consume way too much oil, far more per capita than most other developed countries. It's long past time we started getting serious about energy conservation and independence.

If that's your position, then an economist would tell you that the price of gasoline/oil at its current levels is too low. So how far would you go, $7 a gallon (like in France after conversion for liters and euros) or $8 a gallon (like in Spain/Portugal/Italy) or even higher? At $10 a gallon, we can safely project a significant reduction in US oil/gas consumption.

If conservation is your approach, then it'll be a long, long road before consumption goes down. You'd have to almost double the CAFE standard (vehicle miles per gallon requirements) and engage in building more nuclear, wind and solar facilities, which take years to plan and build (unless you're doing a single showcase windmill in the middle of Atlantic City).

In short, it's very easy to say, but very hard to do.

[Guest Guest]

If that's your position, then an economist would tell you that the price of gasoline/oil at its current levels is too low. So how far would you go, $7 a gallon (like in France after conversion for liters and euros) or $8 a gallon (like in Spain/Portugal/Italy) or even higher? At $10 a gallon, we can safely project a significant reduction in US oil/gas consumption.

If conservation is your approach, then it'll be a long, long road before consumption goes down. You'd have to almost double the CAFE standard (vehicle miles per gallon requirements) and engage in building more nuclear, wind and solar facilities, which take years to plan and build (unless you're doing a single showcase windmill in the middle of Atlantic City).

In short, it's very easy to say, but very hard to do.

Of course it's hard to do. So was building the interstate highway system and winning World War II. But it's necessary.

[Bryan]

According to your graph, China's oil consumption doubled from 1991 to 2001, and we had cheap gas. From 2001 to 2005, China's consumption went up 50%, and the price doubled if you compare Dec 2001 and Dec 2005 gas prices.

Right, but China was an net exporter of oil until the mid 1990s.

http://www.hubbertpeak.com/nations/2004/

When China's use of oil doubles as a net importer of oil, the difference is as between night and day in terms of its effect on supply and demand.

http://www.hubbertpeak.com/nations/2004/

Leaving aside the fact that there are other nations involved besides China, of course.

The current gas run up has more to do with Bush's housing bubble and the need to drop interest rates, even if it trashes our dollar.

You mean Clinton's housing bubble, I believe (Clinton being the guy who put pressure on lenders to lower lending standards for home buyers, thus increasing demand for houses (^ price) and leading to an increasing rate of default (damaging subprime lending market).

You can almost graph point for point drops in the interest rates and the rising price of oil, and OPEC itself admits this is the cause. To tie high gas prices to a working surge seems extremely tenuous. I'm willing to listen if you can strengthen your argument.

I'm not sure what argument you're talking about. I'm suggesting that the success of the surge will tend to make fuel prices sink over the long term. Rather than strengthen a straw man I'd rather help you rip him to shreds and trample the remains.

Say what you will about Clinton's tech "bubble", the overall market came out very much in the black even during the bottom of that rollercoaster. Whatever gain might have been seen in the housing market has been completely wiped out, and we're not done. For Bush to match Clinton's economy, the DOW would have to be above 20,000. And he had a very cooperative Republican congress to work with. I guess he's still got 7 months to do it.

The DOW is not a measure of the economy per se. It is a measure of the value of businesses.

If Clinton inherited an economic windfall through peace time, what does that say about Bush 43 going into war?

It says nothing about the war, really.

It says that more of our GDP will be devoted to the war effort, by percentage, than when the military is being reduced. The real key with respect to the economy is the manner in which the war changes the economic landscape other than in terms of military expenditure. Take Japan's invasion of Manchuria, for example. Japan had to pay for the military effort in Manchuria, but the aim from the start was to secure a protected market for Japanese goods to help Japan weather the worldwide economic depression of the time.

If Clinton's economy benefitted from cutting welfare programs, what does it say about Bush's bank bailouts, oil subsidies, and tax cuts for those who don't need them? Especially in a time of war.

Nothing, really, though it appears that you mightily wish that they did say something.

1) Cutting welfare was, in particular, the strangulation of a self-perpetuating entitlement program. The self-perpetuating nature of the program was radically reduced through legislation. Props to Clinton for cooperating with the GOP on that one.

2) By "bank bailouts" apparently you refer to the reduction of interest rates (the rate the Fed charges banks) and the brokering of the Bear-Stearns buyout by another private company. In this case, putting the safety net under Bear-Stearns probably did much to avert a potential economic meltdown caused by the loss of public confidence in the money system. That's the sort of the thing the Fed was designed to do.

3) What oil subsidies? Are tax breaks supposed to count as subsidies?

Not really sure why you won't admit Bush trashed our economy. What truth am I missing?

The fact that the economy remains strong along with the fact that economies run in cycles along with the fact that presidents don't actually affect the economy all that much in the first place.

And Clinton didn't cut back the military.

Yes he did.

http://www.factcheck.org/demos/factcheck/i...pending_GDP.GIF

Most of his defense FY allocations grew with each succeeding year, reversing the cutbacks that Reagan began and Bush 41 continued.

You don't know what you're talking about. It's true that George H. W. Bush passed diminishing defense budgets, but the rationale was the same as for the later cuts: The Cold War was over.

Clinton did not inherit a growing economy. Why do you think Bush 41 lost a second term?

Yes, Clinton inherited a growing economy. Clinton beat George H. W. Bush because the latter was a poor communicator (including fallout from "No new taxes"), and the press did not give Bush credit for the improving economy. Ross Perot's participation also probably hurt Bush (Perot did rob voters from both parties).

Top line for GDP shows economic growth (GDP) for every quarter in the two years leading to Clinton taking office:

http://www.bea.gov/national/nipaweb/TableView.asp#Mid

Top line for percentage growth shows growth in GDP by percentage (compared to preceding quarter):

http://www.bea.gov/national/nipaweb/TableView.asp#Mid

http://www.bea.gov/national/nipaweb/TableV...08&Freq=Qtr

The oil game is pretty simple. If you fix the supply, the price goes up. OPEC knows this, and so do our oil companies.

And BP (Britain), Citgo (Venezuela), Fina (France), Shell (Netherlands) are all in on the game. Gotcha.

Oil is a global market. It's not easy to fix the supply or the price when you're competing with companies based in other countries. Fina doesn't necessarily want Amoco to succeed. And compared to nations where fuel is not directly subsidized by the government, prices in the U.S. are lower than in other nations (did you check prices in Italy lately?). Consider the 1990s, when OPEC was pumping plenty of oil. Gas prices stayed low along with profits. Did the companies forget how to regulate the supply or was Clinton such a spectacular watchdog that they knew they'd never get away with it (despite the Republican Congress).

It also helps that oil companies stifle competition with their mergers. Basic supply and demand obviously applies here, but not quite as simply as you put it. Why shouldn't we limit how they stack the game, if it helps the overall economy?

Some regulation is appropriate. What do you propose? What would help the overall economy, in your opinion?

You think the middle east is stable?

By historical standards, yes. Iran needs to be confronted in Lebanon and in Iraq. Checking Iran in those places potentially establishes a stable balance of power. If Iran develops nuclear weapons, then the balance changes and instability will increase. Currently Obama's campaign can't seem to figure out if he meant it or not when he said he would meet with the Iranians without preconditions.

You bring up Saddam's nuclear "program" when even Bush mocked himself at a press correspondence dinner over the subject?

Yes. You don't have a serious reply, do you?

I noted that Iran has probably been working on a nuclear program from the time Hussein started on his. There is no question at all that Hussein had a relatively advanced nuclear program.

http://www.nytimes.com/2004/09/26/opinion/26obeidi.html

You find oil ties of Bush, Cheney, and Rice utterly uninteresting with regards to this topic, while looking at Clinton and Obama's book profits for answers?

Oh, no. I'm quite interested in any relevant ties you can bring up. Are you having trouble thinking of one? Is that why you needed the delaying tactic of pretending to misunderstand my statement?

There just isn't any cohesion in your arguments, and I don't see why there is such loyalty to this ideology.

It's because of the elegant cohesion of the arguments, which you somehow seen unable to appreciate while you try to understand oil demand simply in terms of China's consumption (for example). What a laugh.

Do you enjoy high oil prices? Hell, even shareholders of ExxonMobil and Halliburton heavily question the decisions of their boards. Why shouldn't the rest of us? (Disclosure: I own and have owned plenty of oil stocks outright of in funds.)

If you don't like a company's practices as a shareholder, then complain and act as a shareholder.

If you don't like a company's practices as a customer, patronize a different company.

It's not that difficult, is it?

[Bryan]

Of course it's hard to do. So was building the interstate highway system and winning World War II. But it's necessary.

The hilarious thing is the talk of implementing that policy when the economy is the most important thing to the electorate.

Oil, meet water. Matter, meet antimatter.

It doesn't add up. Cutting consumption of the most efficient means of energy production means one thing: hampering the economy.

[Guest Economics Student]

Of course it's hard to do. So was building the interstate highway system and winning World War II. But it's necessary.

The highway system was mostly paid through borrowed funds.

The nation was attacked before it entered WWII.

You would never be elected to anything with the position that $10 a gallon is necessary.

[Guest Guest]

The highway system was mostly paid through borrowed funds.

The nation was attacked before it entered WWII.

You would never be elected to anything with the position that $10 a gallon is necessary.

Most of our best presidents couldn't be elected today. All that tells me is that we've become fat, smug and degenerate. This is typical of countries that have succeeded wildly. What is also typical of such countries is that they decline because they don't know how to handle their own success. They forgot that what got them there in the first place was sacrifice. So they stop sacrificing, and it all falls apart, which is exactly what has been happening, and is happening. We're not paying enough attention to education, we're letting our infrastructure fall apart and we're living off the fat of former successes, consuming ourselves into oblivion. And don't you dare tell us that it won't last forever. Except for one thing: it won't.

Every responsible economist will tell you that the price of gas in the USA is too low for our own good. The fact that you can't sell it politically doesn't mean it isn't so.

[Guest Guest]

The nation was attacked before it entered WWII.

He said "winning".

You would never be elected to anything with the position that $10 a gallon is necessary.

Who the hell said that? Don't put words in people's mouths.

Why wait until we're off the cliff to think about a parachute? The US would do damned well to think about overhauling its energy strategy as soon as possible.

[Guest Economics Student]

He said "winning".

Who the hell said that? Don't put words in people's mouths.

Why wait until we're off the cliff to think about a parachute? The US would do damned well to think about overhauling its energy strategy as soon as possible.

Whoa! Guest said that in response to a comment I made about $7, $8 and $10 a gallon gasoline prices in European countries. I understood his/her response to be the equivalent of "so be it." If your plan for energy conservation is to raise prices to that level, you're not winning any election, not now, not in 1864, not in 1932, not in 1960 or not in 1980.

As to your comment that "He said "winning", how does that have any impact on the point I'm making? The US was strongly against involvement in WWII until we were attacked at Pearl Harbor. "Winning" the war became policy only after we were invaded! I'm not sure that US involvement in WWII is in any way comparable to how the US should respond to the current energy crisis.

[Bryan]

Every responsible economist will tell you that the price of gas in the USA is too low for our own good. The fact that you can't sell it politically doesn't mean it isn't so.

Since higher energy prices will make everything more expensive and potentially spur an inflation spiral, I'd like to see you cite a few of those responsible economists.

Could it be that "responsible economist"="politically liberal"/"environmentally concerned"?

[Guest Guest]

Whoa! Guest said that in response to a comment I made about $7, $8 and $10 a gallon gasoline prices in European countries. I understood his/her response to be the equivalent of "so be it." If your plan for energy conservation is to raise prices to that level, you're not winning any election, not now, not in 1864, not in 1932, not in 1960 or not in 1980.

Frankly, switching to electric cars, with all of the leaps and bounds occurring in battery technology, would put a SERIOUS dent in OPEC's stranglehold on this country, while giving us the equivalent of 60 cents a gallon, last I read (actually, I read this in 2006--it's probably even better now).

On top of that, we need no new infrastructure for it. Gas stations can adapt with a glorified EXTENSION CORD, for crying out loud.

The ranges keep growing (they already suit over 90% of the driving population just fine), and on top of that, the newest batteries are now so durable that they're outlasting the cars themselves.

It's time. I'd like to be able to thumb my nose at OPEC, wouldn't you?

[Guest Economics Student]

Frankly, switching to electric cars, with all of the leaps and bounds occurring in battery technology, would put a SERIOUS dent in OPEC's stranglehold on this country, while giving us the equivalent of 60 cents a gallon, last I read (actually, I read this in 2006--it's probably even better now).

On top of that, we need no new infrastructure for it. Gas stations can adapt with a glorified EXTENSION CORD, for crying out loud.

The ranges keep growing (they already suit over 90% of the driving population just fine), and on top of that, the newest batteries are now so durable that they're outlasting the cars themselves.

It's time. I'd like to be able to thumb my nose at OPEC, wouldn't you?

More electric vehicles would help. Higher tolls and higher taxes for drivers of SUVs would also help. But we're still, at best, 5 years away from mass production of all-electric vehicles. But were that to happen, it wouldn't be much of a thumb of the nose. You still have to supply energy/fuel for heating/cooling buildings and all appliances/gadgets that run on electricity. Trucks and trains still need diesel. And energy prices would still be high. Why? The biggest factor in the price of energy is the rapidly increasing demand coming from China and India. The ongoing modernization of the Ch-Indian economies (2 billion plus people) will continue to push energy prices higher.

[Guest Guest]

More electric vehicles would help. Higher tolls and higher taxes for drivers of SUVs would also help.

Agreed.

But we're still, at best, 5 years away from mass production of all-electric vehicles. But were that to happen, it wouldn't be much of a thumb of the nose. You still have to supply energy/fuel for heating/cooling buildings and all appliances/gadgets that run on electricity.

The cars consume WAY more than that. Removing them from the equation would make a big difference. In the meantime, we could transition to nuclear on our side as well.

Trucks and trains still need diesel. And energy prices would still be high. Why? The biggest factor in the price of energy is the rapidly increasing demand coming from China and India. The ongoing modernization of the Ch-Indian economies (2 billion plus people) will continue to push energy prices higher.

This won't matter if we move to becoming energy-independent, which is certainly possible.

[Guest Keith]

Maybe while were are at it we could quit outsourcing everything to China and India?

[Bryan]

Maybe while were are at it we could quit outsourcing everything to China and India?

Trade is an overall good, and labor is a traded commodity.

I don't think you realize the implications of the protectionism you're implicitly advocating, Keith.

[Guest Economics Student]

Agreed.

The cars consume WAY more than that. Removing them from the equation would make a big difference. In the meantime, we could transition to nuclear on our side as well.

This won't matter if we move to becoming energy-independent, which is certainly possible.

You'd still have to run your refrigerator, heat and cool your house. Even if we undertake a real renewable energy initiative, significant solar and wind power generation are years, if not decades, away. Nuclear? Where?? It's safe, but not 100% secure (with dire consequences if there is an accident) and what do you do with the nuclear waste, which will continue to radiate for thousands of years to come? If the choice is nuclear versus $8 a gallon at the pump, my personal choice is the $8.

[Guest Keith]

Trade is an overall good, and labor is a traded commodity.

I don't think you realize the implications of the protectionism you're implicitly advocating, Keith.

I said "out sourcing everthing" I did not say that we shouldn't out source anything at all. I fully realize the implications of protectionism, the problem is that I didn't say that.

[Bryan]

I said "out sourcing everthing" I did not say that we shouldn't out source anything at all. I fully realize the implications of protectionism, the problem is that I didn't say that.

Stay as vague as possible, then.

[WilliamK]

You'd still have to run your refrigerator, heat and cool your house.

The relevance of that depends on how much of that comes from imported petroleum vs. coal, hydro, nuclear, methane, etc. I don't think it's much. I'm not aware of any diesel or gasoline power plants beyond the scale of backup generators for hospitals and such.

Even if we undertake a real renewable energy initiative, significant solar and wind power generation are years, if not decades, away. Nuclear? Where?? It's safe, but not 100% secure (with dire consequences if there is an accident) and what do you do with the nuclear waste, which will continue to radiate for thousands of years to come? If the choice is nuclear versus $8 a gallon at the pump, my personal choice is the $8.

For the near term, electric cars will mostly be powered by coal, as that is already the dominant fuel for electric power generation. It's not perfect by any means, but we don't have to import it from countries who want to kill us, and it still may be less pollution per mile traveled than burning gasoline in an automobile engine at less than 15% efficiency and no ability to carry around the massive emission reduction measures that are possible for a stationary power plant.

It's all about the vehicles. Other than that, we're mostly energy independent already.