The Saudi Arabian oil producers have come the conclusion that it is finally in their own selfish best interest to raise oil production, due to significantly higher potential world demand. They've figured out that Westerners are getting sick of their shit, and that this latest price spike probably caused most Americans to conclude that we REALLY DO need to break our addiction to foreign oil, rather than just talk about it.
How did the markets react? Did the prices go down to reasonable levels? Heck no! Oil prices on the world market went up again! Why, you might ask? Because the other thugs in Nigeria we buy oil from have supply disruptions going right now.
Thomas Friedman wrote another brilliant essay in the New York Times about what a candidate for president would really say if they were a leader on the subject:
This candidate would note that $4-a-gallon gasoline is really starting to impact driving behavior and buying behavior in way that $3-a-gallon gas did not. The first time we got such a strong price signal, after the 1973 oil shock, we responded as a country by demanding and producing more fuel-efficient cars. But as soon as oil prices started falling in the late 1980s and early 1990s, we let Detroit get us readdicted to gas guzzlers, and the price steadily crept back up to where it is today.
We must not make that mistake again. Therefore, what our mythical candidate would be proposing, argues the energy economist Philip Verleger Jr., is a “price floor” for gasoline: $4 a gallon for regular unleaded, which is still half the going rate in Europe today. Washington would declare that it would never let the price fall below that level. If it does, it would increase the federal gasoline tax on a monthly basis to make up the difference between the pump price and the market price.
To ease the burden on the less well-off, “anyone earning under $80,000 a year would be compensated with a reduction in the payroll taxes,” said Verleger. Or, he suggested, the government could use the gasoline tax to buy back gas guzzlers from the public and “crush them.”
But the message going forward to every car buyer and carmaker would be this: The price of gasoline is never going back down. Therefore, if you buy a big gas guzzler today, you are locking yourself into perpetually high gasoline bills. You are buying a pig that will eat you out of house and home. At the same time, if you, a manufacturer, continue building fleets of nonhybrid gas guzzlers, you are condemning yourself, your employees and shareholders to oblivion.
I am frustrated that no one seems to be able to articulate the truth. Americans need to hear it. But that doesn't make for a good campaign sound bite.
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