http://www.iht.com/articles/2008/03/06/business/06oil.php
OPEC responding to Bush’s request for increasing the oil supply has tossed the ball back into Bush’s court. They claim it is a mismanaged economy that has driven up prices. We are inflating and expecting the dollar to buy just as much. We want them to take the loss. Can you imagine they refused?
Prices climbed to 3.25 in Detroit today. Yet the supply is very HIGH already. How do we get out of these messes this admin keep conjuring up?
It isn’t just this admin. We’ve been mismanaging our economy for decades. Now them chickens is comin’ home to roost.
I’m sure OPEC finds it very convenient to blame the US economy for the price of oil. There such good guys, and we’re the bad guys. Give me a freakin’ break. :rolleyes:
Can’t get out of this one. Congress let Bush spend all that money in Iraq and its gone. We are never going to get it back and our children and grandchildren will pay for it.
That’s why the government shouldn’t try to “manage” the economy. It’s fuzzy-minded liberal thinking like that that gets you eaten.
But government doing nothing to manage the economy is even worse, as Herbert Hoover learned.
Anyway, in any modern economy, government is the largest single actor; its fiscal policy alone constitutes a form of “management.”
The dollar is now at 1.55 Euros. When we went from parity to where we are now we simply inflated. How can you expect OPEC to accept it? Our policy has been to drastically increase spending while cutting taxes. The economy shows what this management has brought us.But what the hell ,if you think the rapture is coming soon ,why plan for a future.?
I’ll be the first to propogate almost any notion that puts the blame for any problem on Bush, yet I think that the mindset displayed here is fundamentally flawed. By what criteria is gas at $3.25 per gallon a “mess”? We need to abandon the idea that gas has some natural low price and that somebody must be at fault whenever the price rises. Gas costs $3.25 a gallon because so many people all over the world want to buy so much of it. If you don’t want to spend so much, then you can walk, ride a bike, take the bus, carpool, or buy a Prius. More generally, if you dislike how the dollar is falling against foreign currency, buy local products.
There’s a minor problem with your free market explanation. We have a cartel meeting to set production quotas. Thus, there is not a free market operating here. Increased demand makes it worse, but in a free market each player would increase production to profit from the higher prices.
But OPEC has a point. As mentioned, the falling dollar naturally hurts, but what also hurts is Bush refusing to do anything to support improved energy efficiency beyond the pie in the sky hydrogen powered car.
BTW, a mismanaged economy should actually help, since a recession causes less demand which should pull prices down.
Every government manages the economy. The Republicans do a piss poor job of it, that’s all.
Except that supplies are very high at the moment. So simple supply and demand don’t explain it.
The problem is that oil is traded in dollars and we are deflating the dollar by spending wildly in Iraq, cutting taxes, and lowering interest rates. The value of the dollar goes down, the price of oil goes up.
OPEC does not control all oil production or even most of it. OPEC’s activities have a minor effect an oil prices. The major driving factor behind rising oil prices during the past decade is rising demand.
Also, while I’m more than willing to join the chorus of Bush-bashing for his environmental policies, those too are a minor factor. The major factor is what individuals are willing to do to curb their own energy usage. If the crowds start beating down the doors and demand efficient cars and appliances, then companies will make them, regardless of government policy.
You would think that FDR’s prolonging of the Depression with the New Deal would impart some lessons, but I guess as long as politicians are “doing something” then results don’t matter.
Also, please point out to me how Hoover “did nothing” to manage the economy as he was trying a variety of stimulus programs and enacting high tariffs. The myth that Hoover just sat back and was some sort of proponent of laissez-faire isn’t supported by history.
If demand is very high, too, then it certainly explains it. The shift between winter fuel blends and summer fuel blends may also be playing a part. That severely disrupts the market every spring.
A minority view among economists. Perhaps arguable, but not the sort of thing you can cite as established fact.
Oil prices are set on the futures market, which is very sensitive. If OPEC said they’d increase production by, say, 5%, what do you think will happen to prices? Why do you think prices went up with the news of trouble in Nigeria a while ago?
As for your second point, if wishes were horses everyone would buy a Prius. If everyone did things for the good of the society, not for immediate self interest, Communism might actually work. California actually has decreased gas usage - in absolute, not per capita terms, thanks to our high gas prices. I don’t know what the best policy would be, but something might be good. The environmental impact is secondary in this case. The benefits in emissions reduction is just a side effect.
Can someone explain to me how any US president “manages” our economy? The president may push for certain policies that have an effect on the economy, but that isn’t the same thing. And remember that Congress sets spending limits and authorizes programs like fuel efficiency standards, etc. Now, I’ll be willing to agree that the invasion of Iraq is a contributing factor to the higher oil prices we see, but it’s just one of many factors-- the biggest of which is soaring demand.
In the current case, by insisting on cutting taxes while wildly increasing spending, and appointing a Fed chief who is cutting interest rates. Result: devalued dollar and looming inflation.
Cutting interest rates when you think you’re headed into a recession is SOP. If he hadn’t done that, people would be screaming for him to do so.
No, every government tries to manage the economy. They all do a piss poor job of it. The economy would manage itself just fine if they would leave it alone.
*The idea that presidents can control it lies between an exaggeration and an illusion. *- Robert J. Samuelson