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Different kinds of reality
Posted by: McQ on Sunday, May 11, 2008

Three political goals - less pollution, less dependence of foreign oil, develop incentives for alternative fuels.

Today's Reality - gas prices are sharply up.

Probable Result - less miles driven, less pollution, less dependence on foreign oil, more of an incentive to develop alternative fuels. More people using mass transit.

Today's election year "reality" - claim to feel pinched citizen's pain, demand oil companies reduce price of fuel, promise windfall taxes, flooding of the market with oil from the Strategic Petroleum reserve and suspending federal gas tax to lessen the price of gas.

Probable Result - enable more miles driven, thus more pollution, more dependence on foreign oil and less incentive to develop alternative fuels.

Market? What's a market?

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Previous Comments to this Post 

Domestic drilling would solve most of that as well.
And guess who manipulated us out of THAT solution?

Written By: Bithead
demand oil companies reduce price of fuel,
Price controls? That will lead to rationing, if it comes to pass.
promise windfall taxes,
Increased taxes.
flooding the market with oil from the Strategic Petroleum reserve
Yeah, stupid. It would have the good economic effects or reducing price while not rewarding OPEC, but we need a reserve.
and suspending federal gas tax to lessen the price of gas.
Kinda the opposite of the windfall tax. I’m all for lowering taxes, however.
Written By: Don
URL: http://
If we really wanted to accomplish all those goals we could just do the following:

(1)Eliminate all of the current C.A.F.E standards, ethanol subsidies, and other market manipulations.

(2)Cut taxes massively, especially the regressive FICA tax.

(3) make up some of the lost revenues with a really stiff BTU tax on petroleum fuels.(but not all, we need some stimulus as well)

That would really encourage conservation and alternative fuels while not trying to force people into picking and choosing what kind of vehicle they want, nor trying to choose winners and losers among alternative energy.
Written By: kyleN
The upside of expensive oil is that finally we have the incentive to do something about energy, instead of continuing the usual green/NIMBY deadlocks.
Written By: huxley
URL: http://
The upside of expensive oil is that finally we have the incentive to do something about energy, instead of continuing the usual green/NIMBY deadlocks.
If by "something" you mean argue about which alternative energy source everyone should be forced to use, then yes we’ll do "something".

If by "something" you mean have a rational debate on energy, I must ask if you’ve been paying attention...
Written By: Ryan
URL: http://
Yeah, you never had so many ideas percolating up when oil was US$ 10 a barrel. I think the true solution needs high oil prices.
Written By: Harun
URL: http://
In the recession of the late 70’s & early 80’s we also had high gas prices. If you take the inflation adjusted price history and flipped it upside down you’d have a rough approximation to the health of the economy through that time period.

I don’t believe the price of gas and the health of the economy were that closely correlated, but I believe it was a component in that recession.

The changing travel habits mentioned have consequences in people’s purchase patterns. They wait to buy things at more opportune times. They forgo trips. That affects the economy.

Then there’s the fact everything we buy has some degree of transportation cost associated with it. Many things also have processing costs that are energy intensive. Many things we buy commonly have prices that are heavily tied to energy/oil/gas prices.

Written By: jpm100
URL: http://
In 1973, there was talk of gas rationing and we actually went to odd-even fill ups to reduce the lines at gas stations. My next door neighbor, owner of a V8 Ford land yacht, complained bitterly about gas prices and wanted quotas based on mileage. I laughed him off. Standing in front of my BMW 2002, I took out a dollar bill. "This," I said, "is our ration coupon." OPEC wisely ended their quotas before alternative fuels became commercially attractive.

Markets work. The worst thing the government can do is "help."
Written By: Arch
URL: http://
As far as I can tell, OPEC & friends have become a moderately effective cartel rallying around anti-NATO anti-US sentiment as well as self-service.

I believe in the past, particularly the 80’s when gas prices fell, the Saudis undermined the cartel to defund Iran (and possibly Saddam) after Iraq & Iran depleted their military stockpiles from the Iran-Iraq War.

With the US sandwiched between the two, we are by default providing substantial security to the Saudis. In part, they don’t feel the need to keep Iran defunded.
Written By: jpm100
URL: http://
Funny story in today’s paper about how the price of gas is "crunching the middle class"

WHich is heart-rending, except that the family profiled had 7 kids, and the family was feeling the pinch of gas AFTER paying for: groceries (family of 9) college tutition (for 1) gymnastics and soccer.

They don’t even care about hiding it anymore.
Written By: shark
URL: http://

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