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Oil is a cost component for end-stage goods. People do not want to own oil, they want to own what oil makes possible. Lower cost is a good thing, not a bad thing.

Now of course a lower market price for crude or other hydrocarbons means less drilling and lower employment in the sector. And the employment in drilling tends to be in the manual labor more than office work. So, that is where people suffer when prices fall.

But overall, the lower the cost of energy, the greater the ability of our economy to grow. Nat gas is very difficult and costly to export, so lots of fracking yields lots of gas. The gas that is not stranded ends up in the market and helping to drive down the cost per btu of anything that has access to gas and can burn it. Nat gas also has some substitution effects against liquid hydrocarbons.

Since when are high costs good?? This is just silly thinking.

But overall, the lower the cost of energy, the greater the ability of our economy to grow.

Indeed, a reduction in the price of oil is analogous to a tax cut. It might be argued that it's been the decline in the price of oil that has staved off recession.

I am not clear whether it is a surfeit in the supply of oil resulting from Iran coming onto the market and going into head-to-head competition with Arabia in a context of American fracking, or whether the slowdown in China and elsewhere has driven down demand, or all three which have brought oil down $40 a barrel.

Whatever the cause, the effect on Vladimir Putin is devastating. Think of Russia as a giant gas station which requires $80 a barrel oil in order to filter money down through the apparatchiks to sustain the present regime. Workers at the Salzburg airport will tell you that when oil went down Russian tourism infamous for its profligacy came to an end. $40 a barrel oil will do more for America's relative standing compared to Russia in the world than all the red lines ever drawn by Brack Obama.

There is very little to see that is not positive in $40 a barrel oil.