The Fiscal Times asks will rising oil prices scuttle the recovery. I guess that's an interesting question but it's the wrong one if you're looking for the big picture. A better question is how low does alternative transport gge (gallon of gasoline equivalent) have to get before you can have a vibrant economy at that transport price?
The first question's answer lets you know whether to invest for a recovery or a recession over the next year. The answer to the second lets you know when the age of oil will end. Supply may very well have actual oil prices well before the tradeoff point when it happens but behavior will still change because then the response to high oil prices will not be suffer a recession and thus reduce demand but rather will be a quick changeover of enough oil based transport to reduce demand by a like amount. The behavior, and the investment opportunities that derive from it are very different.
It would be nice if the economy was agile enough to move organically in response to changing conditions, but it's not.
ReplyDeleteFar too much of it is owned by entities that have a vested interest in current conditions and will not give that up while there's still blood left to suck. It seems they are willing to send it all to hell to keep their 'precious'.
Disappointing but not surprising given the greed driven agenda, I mean where would you get enlightened self interest from in that salivating morass of acquisition ... greed.
It isn't that there are entrenched interests that want to maintain the status quo that is the problem. It is that they have legal help in maintaining it. Hunters must have their prey, nimble entrants must have their dinosaur incumbents. It's when the referee in these contests favors the dinosaur that we lose so much efficiency.
ReplyDeleteI do like your thought on greed and will post on it soon. It's completely wrong, but wrong in an interesting way.