Re: Ben Stein (is an idiot) on Oil: it’s like any drug - just keep using it and your problems will all go away

sbroback — Tue, 27 May 2008 16:54:01 -0000

Words mean things. One more semantic item for you is "externalities" which is what you allude to here.

The externalities of Co2 and the cost of trying to trade with irrational mideast sources are very valid IMHO. That's why I want to minimize our exposure to volatile sources by providing more of our own. 11 percent of our oil comes from the persian gulf. How does preventing us from developing our own sources help reduce that dependence? If we can't assume the rest of the world will send us their oil, what's the logic of not tapping into our own resources?

Getting off oil for environmental reasons is logical. Getting off oil because we're "running out" is not. We all fell for that one in the 70's (Jimmy Carter in his sweater etc.) those of us who remember won't fall for it again.

Tax breaks for research are not the same as high taxes for consumers. The former is likely productive to the economy, the latter is just another drag on the consumer (and the economy.)

A the Future in Review Conference last week, the eggheads there agree that we need to create alternatives to oil asap (so do I.) they also agree that transferring money from middle class gasoline purchasers to congress is NOT the answer.

OPEC "cut us off"? You're kidding right? Norway and Mexico are going to "cut us off?" Saudi Arabia? If you mean the persian gulf states are going to do it, I'm not concerned - they need food more than we need oil.

Using that logic, if we can bump up our internal supply by 11 percent, we could "cut *them* off..."

Re: Ben Stein (is an idiot) on Oil: it’s like any drug - just keep using it and your problems will all go away

sbroback — Tue, 27 May 2008 15:16:49 -0000

If you believe that the CO2 that results from oil usage is steering toward a climate crisis, then adding taxes to the high cost of oil makes sense. In that case, we want to distort the market to discourage use. BTW, if you want to call something that screws up a market "economic" so be it.

Why is the price of oil so high? World supply increased more than demand last year. It's because there still isn't much slack between demand and supply, and (like condos in Miami) speculation has forced it to a level that can't be sustained. As any economist would tell us, it doesn't take much additional supply to pop a bubble like this. That's why Stein and I say let's get some addtional sources that aren't in potential war zones.

True, oil is finite -- but we're nowhere near running out. We haven't come close. The "peak" oil hand-wringing has been with us for a hundred years, and we still haven't peaked, much less declined. A mammoth field was just discovered off Brazil, and Canada has the equivalent of Saudi reserves in it's tar sands.

How much of the gas tax you propose will go to actual R&D versus earmarks and waste? 1 percent? When we do peak, the economic incentives to find an alternative will emerge, and it likely be a solution from an innovative startup, not a government bureaucracy.

Check out how America's oil consumption declined after the oil crisis of the 1970's -- we didn't get back to those levels (19 billion barrels a day) until the late 1990's.

We don't need taxes/gov't to "assist" this market. At $4.00 a gallon, Guzzling SUV's are going away, consumption will drop, and oil prices will plummet. If they don't we don't want taxes stifling investors who want to put money in startups working on alternatives.

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Re: Ben Stein (is an idiot) on Oil: it’s like any drug - just keep using it and your problems will all go away

Re: Ben Stein (is an idiot) on Oil: it’s like any drug - just keep using it and your problems will all go away