Energy Prices, Good Thing?

I've said this before...I think there is long-term gain...but I hate that lower-income people have to pay for it more deeply than the rest.

 

I don't know what the change will be, but these high prices will force either more access to oil and gas reserves we can't currently touch, more investment in alternative fuels, or both. Hopefully it is both.

 

There is no better way to signal change than the profit motive or price signals. As I have said from the start, high prices will spur investment in additional oil & gas production and it will lower consumer demand. This is the ONLY way to solve the pricing problem. Stay out of this Washington and definitely don't do anything stupid like a 'windfall profits' tax.

 

If these prices last long enough to permanently change American behavior, yes they are a good thing. We must stop being held hostage by countries that hate us. Hopefully the oil lobby's power over our government will be broken. Our government must finally help plan a national strategy of conservation, domestic oil exploration & development and long term alternative power. This should have started en mass in the 1980s. Both candidates better map out something that makes sense or they won't get my vote.

 

The "stupid" thing has been our government's inaction the last 20 years that has made the U.S. so vulnerable to this crisis.

 

It should be a good thing if you're sitting on some ExxonMobil stock.

 

The very exact thing happened in Brasil in the 70's. We could no longer afford oil and its high prices during that initial supply shock. Thats when our military dictatorship stepped in and forced our scientist to come up with an alternative. That’s how ethanol and flex fuel came about. High prices will allow greater investment in alternatives. But oil companies dont want change and they can always undercut alternative fuels by lowering their prices if need be.

 

Yes and the car industry will continue to make vehicles that use alternatives more expensive, either through a bigger price tag or maintenance. You WILL pay alot for you're energy. The only question is who will you pay.

 

I think it's a bad thing when the gas prices get so high that lower classes start to revolt and riot and our country descends into a post-apocalyptic warzone after a catastrophic civil/class war

 

High energy prices are a bad thing, not in and of themselves, but as a symptom of significant inflation. We've doubled the money supply (M3) over the past 7 years to pay for guns and butter. This is just now starting to be reflected in prices, and it's not nearly through yet. Without reducing services, we are not going to change this, and it will get worse.

 

Bush really F'ed things up. In 10 years we will start to see texts in the field of economics that chronical all of his stupid moves and their economic effects

 

It's not the government's role -- it's the role of private enterprise. Prior to a high price environment, there was no need. That said, there has been massive investment in alternative energy and renewables.

 

wrong...It is the government’s role to look past current conditions and to attempt to foresee the storms that lay ahead in order to properly plan. 9/11 is one example of how are government failed to do so. And now energy dependence is another example. Did they really believe the golden goose would never die? Did they believe that other nations would always be second class citizens in this world and never improve upon their conditions? Did they believe that the world structure would not change? Oil companies look out for their best interest and it is not in there interest to change the way things are. They pay millions and millions of dollars to lobbyist every year in order to maintain the status quo.

So in short, The free hand will not always guide us, because there are always things that corrupt and misguide the free hand ( i.e. lobbyist, special interest groups)

 

The same crowd who spurns taxes also wants government subsidies to "encourage investment". We'd be lucky if the government was inactive for the last 20 years...

 

You're sorta right, but only because we've gotten ourself in such a ridiculously stupid situation. We've gotten to the point where almost no significant commerce is allowed without permitting, and when we do allow things, we want to either tax them to discourage them or subsidize them to encourage them. We are at the mercy of 535 lawyers that only 18% of the country likes, who while their job comes up for review every 2 years, it's almost impossible to fire them. The "invisible hand" isn't always gentle, but always provides a response to shortages. After all, that's how capitalism works.

Here's an example of how it works when we have a more capitalistic society. As early as the 1910s speculators began talking about the coming peak iron. It grew to a fever pitch in the 1940s and 50s. Steel prices were going to be unmanageable, cars were going to cost more than average people could afford, and the economy was going to be crippled Well, the iron production peak came and went in 1969, with little fanfare. Steel prices have fallen significantly (in 1960 dollars) since. Why? Plastics really improved, and replaced that demand.

In the 1910s and 20s, few could foresee plastics replacing steel, and certainly no Congressmen could. But by staying out of the way, they allowed chemical companies to develop the technology to make Peak Iron a non-event.

I know some are going to immediately come back and say, "It's a lot different now than in the 1960s." And you're right. But think about the reasons why it's different.

 

There is one thing our federal government is good at, wasting money. When Brazil was making a change to alternative energy, our government did essentially nothing. Thirty something years latter, our government officials are still "talking" and wasting money. So many resources have been wasted, and frankly, I see no end in sight. If these prices go much higher, the country will be flirting with economic, social, and political disaster because the moderate and lower income groups can not afford current energy costs.