Friday, August 06, 2004

leave the gas ? just walk away ?

the media insists on taking the shortest short-term view of the recent upswing in oil prices. sure its a drag on the current 'expansion'. sure its going to impact consumer spending. and sure, its absolutely essential for the long-term efficiency of the american economy.

oil is expensive. to be specific, $40 a barrel isnt particuarly expensive. neither is $50. its whats missing from that number that's costing us. the per barrel rate fails spectacularly to capture the costs of a foreign policy held entirely hostage by america's insatiable thirst for oil. it ignores the environmental costs (global warming, land use patterns, air quality) of a culture based on oil.

personal virtue or not, conservation on any large scale is a fantasy without proper signals coming from the marketplace. as long as gas is under $2 a gallon, americans will continue to blithely purchase 6000 pound assault vehicles for their weekend runs to wal-mart. not only is this spending unhealthy environmentally and politically, its inefficient economically. spending 10 dollars to travel a distance that could be covered by $5 worth of gas in stunningly poor allocation of resources.

oil prices going up may be a bad thing for this economic moment (and certainly for W's electoral hopes) but ultimately they're the best thing that can happen to america in the long term.


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