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"...all these people"?????? |
Posted on 04/19/2006 5:12:13 AM PDT by governsleastgovernsbest
by Mark Finkelstein
April 19, 2006
On this morning's Today show, NY Times foreign affairs columnist Thomas Friedman expressed the astonishing wish that the price of crude oil . . . go to $100/barrel ASAP.
Friedman's theory is that extremely high oil prices are desirable because they would induce behavioral changes that would ultimately decrease demand and force oil prices way down. Here's how the exchange with host Matt Lauer unfolded:
Friedman: "I hope the Iranians get as crazy as they want. My attitude toward the president of Iran is 'you go, girl', because the faster we get to $100 a barrel, pal, the quicker we're going to get back to $20. Because when we go to $100/barrel, then you're going to see all these people change their behavior and their oil-buying habits and their car-buying habits in a fundamental way."
Lauer: "So you're saying in the short term you'd rather see a nuclear Iran and crazy oil prices because in the long term that's going to fix the problem?"
Friedman: "I would like to see crazy oil prices. A nuclear Iran is another question. But from my point of view the sooner we get the price of oil up where we changed everyone's behavior, the sooner the price of oil is going to come down and then we can say to the Iranians, 'hey, do whatever you want, pal.'"
Beyond the tremendous pain that $100 oil would inflict on billons of people in the short run, Friedman's analysis is fundamentally flawed, because he views market reactions as static rather than dynamic.
Let's assume Friedman's right, that $100 crude would quickly bring about huge responses in car-buying habits, etc. that drove prices down to $20. Once that happened, consumers would look around and say, 'hey, why am I sitting in this Yugo [or whatever it would be] with my legs crammed into my chest when gas is 99 cents a gallon? Honey, we're getting that Hummer!' And oil prices would start their climb back upwards. Markets are dynamic, and find find dynamic equilibriums. There are no permanent shifts.
Beyond his flawed economics, Friedman reveals an even more fundamental flaw of elitist liberal thinking: the desire to change people's economic behavior to suit the elites' world view. This is the modern liberal version of central planning. It's the same thinking behind Hillary's famous line: "we're going to take things away from you on behalf of the common good."
Friedman would be better off sticking to his foreign-affairs knitting, leaving the economics to the experts and leaving people to make their own decisions about their lives.
Today Show/NewsBusters in-a-Yugo ping.
If you think this is nuts keep in mind some Libertarians have the same flawed reasoning that "we have to destroy it to save it" with some probably hoping for a Hillary presidency.
Sure, Tom, sure. Maybe you'll have to ride in a smaller limo to the NBC studios and your book publisher. Those who have to commute 20 - 50 miles each way, will probably not appreciate your urban-centric thinking.
There is too much oil in this world to sustain this $70.00 dollar speculative bubble. It could burst anytime. I see gas around $30.00 by the end of summer.
I knew that nothing Friedman said could be taken seriously when I saw his latest book, "The World is Flat: A Short History of the Twenty-First Century." Two errors in one title, is that a record or what? We all know about the real shape of the earth, and how can anyone seriously claim to write the history of this century, when it is not yet even 10 percent over?
$30 Gas?!?!?!?!?!?!?!?!?!.........
Let's hope not...
Shhhhhhhhhh....Exxon knows this but they need oil prices high to pay that 400 million retirement to that fat ass.
Hmmm.
Did you forget your /sarc tag?
So wanting the market rather than the government to sort out our problems is now 'elitist liberal thinking'?
Nice reversal.
Just damn.
I'm presuming you mean oil, not gas.
Here's my humble suggestion -
Stage 1: Diesels are not very popular in America because of the treatment they get from the EPA. Eliminate these problems. Cut any relevant taxes.
Stage 2: Build refineries. Drill ANWR.
Stage 3: Fund research into Bio-Diesel or other alternatives that can easily hook into existing Diesel technology.
Stage 4: Wait and look at the results.
I believe the Hydrogen economy is way off and Hybrids are a joke - diesel offers a practical way to conserve oil now without too much economic dislocation, and provides a bridge to other sources such as biodiesel.
Regards, Ivan
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"...all these people"?????? |
I see your point. He is leaving it to the market, but still wants the market to achieve his central-planning goals. Better than imposing it through regulation of MPG standards, etc., no doubt, but it's the impulse behind Friedman's thinking that disturbs me. Even so, I acknowledge that your observation is a good one.
Actually, I usually find Friedman to be a puffed-up liberal a$$, but I do agree with him on his so-called 'geo-green' ideas from a national security standpoint.
Even here, Friedman is being something of an a$$ - he hasn't thought through the deeply painful consequences to our economy of a sustained hike in oil prices beyond $100 - a pain that he, as a highly-paid columnist, will be insulated from.
Still, in a way he's right. We have got to get off oil and market-led solutions are the only way to do it.
We can get $100 a barrel oil tomorrow by taking out all the oil fields in Iran.
Which is why Tommy doesn't want to leave higher prices to inefficient free-market mechanisms but rather use the big stick of TAXES!
Hey, Tommy, You Go Girl !!!
You know ... the little ones ... out there in flyover country.
Spot on, Ivan.
"Friedman's theory is that extremely high oil prices are desirable because they would induce behavioral changes that would ultimately decrease demand and force oil prices way down."
Be careful what you wish for Mr. Friedman. I've seen the "behavioral changes" people make, when gas prices rise high enough to "hurt", on more than one occasion. ;)
People will not run right out and by new cars. What they will do first is cut down on "non-essential" spending. (aka
"Every dollar I spend on gas is a dollar I don't spend on something else.") Retail sales will fall first, along with "recreation" and "tourism", as people "think twice" about a "run to the store" or going to a movie. Prices will "rise" as retailers and vendors can't "eat" "fuel surcharges" forever.
"Public services" such as fire, police, and even school buses will have to come up with the money to pay for fuel costs(Funny, I've yet to hear about "fuel efficient" fire engines and school buses? ;) and guess whose "pocket" will be picked to make up the "shortfall"?
Thank goodness, horses and buggy whips aren't completely obsolete. ;)
What needs to happen is more refineries need to be constructed.
Absolutely treasonous talk.
"What needs to happen is more refineries need to be constructed."
Yes, among other things, but "solutions" are down the road. I'm talking about the immediate reaction, which will be an economic "recession", and I'm already seeing people start to "think twice" about how "badly" they "need" a thing. ;)
I respect Friedman for backing the war as a confirmed lib, but many of his other ideas are in the Loony Tunes category. Another "expert" in one area (mideast politics) who thinks he or she is a genius in all areas.
Oil prices go high enough and China will stop buying it (to bury in the ground) and prices would fall quickly.
Too bad we can't ping him. hehe
Thanks for your report. You REALLY tortured yourself watching Tom Friedman today.
Thanks, PG. This is the third time I've written about a Friedman Today show appearance. The other times he was fine. In another part of the interview today, Lauer displayed a graphic from a column in which Friedman accused Rumsfeld of "criminal negligence" for his conduct of the war!
That's just silly. Oil is going to go up like a ratchet moves in one direction. If it reaches $100 it will fluctuate, but unless some miraculous oil field is found tomorrow, the only movement it will make is higher than $100.
Even the Army Corp of Engineers thinks this trend is the real thing...from Energy Trends and Their Implications for U.S. Army Installations ...emphasis added by me...
The days of inexpensive, convenient, abundant energy sources are quickly drawing to a close. Domestic natural gas production peaked in 1973. The proved domestic reserve lifetime for natural gas at current consumption rates is about 8.4 yrs. The proved world reserve lifetime for natural gas is about 40 years, but will follow a traditional rise to a peak at about 2035 and then a rapid decline. Domestic oil production peaked in 1970 and continues to decline. Proved domestic reserve lifetime for oil is about 3.4 yrs. World oil production is at or near its peak and current world demand exceeds the supply. Saudi Arabia is considered the bell-whether nation for oil production and has not increased production since April 2003. After peak production, supply no longer meets demand, prices and competition increase. World proved reserve lifetime for oil is about 41 years, most of this at a declining availability. Our current throw-away nuclear cycle uses up the world reserve of low-cost uranium in about 20 years. We will see significant depletion of Earth’s finite fossil resources in this century.
Welcome aboard. The more you read Tom Friedman the sillier it gets.
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