My explanation for high oil prices is the collapse of oil states. Arnold Kling argues that instead the problem is that investors fear the collapse of advanced states, so are reluctant to take their money. My explanation is that oil states are increasingly short of the competence to pump oil, the ability to provide security to people pumping oil, and the credibility to make deals with people who are competent to pump oil — for example it is difficult for …
Category: economics
US Chamber of commerce protests junk science
The second national climate assessment predicts that the United States will “very likely†experience rising sea levels and increasing droughts, heat waves, intense storms and resulting illness and premature death over the next century as climate change intensifies. But, as is the usual practice with climate “science†, the report fails to make available the evidence that supposedly leads to this conclusion, a gross and flagrant violation of normal and proper scientific practice. And so, the US Chamber of Commerce, …
Bernanke explains what he is doing wrong
In his speech Governor Ben S. Bernanke observed that if inflationary expectations rise, and the Fed fails to raise interest rates correspondingly, this is unstable. He failed to make the reason for this clear, but the reason is that real interest rates are nominal interest minus expected inflation – so a rise in inflationary expectations causes a fall in real interest rates, causing massive real borrowing – as for example the housing boom and flight from money into real things, …
Bush rolls back oil prices, MSM in denial
Political correctness is that we should not drill for oil, for more oil will not solve the problem of high and rising fuel prices. Which political correctness the mainstream media firmly endorse. There are multiple bans on oil drilling. Bush ended one of them, which had no immediate effect on oil drilling, for other bans in place. But it had immediate psychological effect. Oil prices immediate dropped about eighteen dollars, a huge drop, which the press is frantically trying to …
Solution to the energy crisis
Newt tells it how it is: This crisis was caused by politicians. He tells how to reduce fuel costs in the short run, and the long run. “you want energy now†he tells us. And then he tells us how to get it. How do we solve the energy crisis? Answer. Let businessmen extract oil. Drill here. Drill now. Pay less.
Roots of the energy crisis
The energy crisis happened because of optimistic projections – that gas to liquid and coal to liquid would not be needed until the technology had been improved and the cost brought down, that the dramatic growth in China and India could be accommodated by rapidly expanding conventional oil production. The political elite, unable to introduce a carbon tax because it would directly and visibly hurt people, proceeded to block coal and oil developments, thus invisibly and directly hurting people. The …
Rational Oil Prices
It seems that Arnold Kling has been in Afghan cave during the past six months. He does not seem to think that there has been any bad news on oil supply over the last six months. The recent run-up in oil prices represents a similar puzzle. I think that it’s difficult to tell a story for the rise in crude prices for the last six months that is based on the rational digestion of news. Either six months ago folks …
Will DME save us from the oil crisis?
To satisfy world demand, as former third worlders become first worlders, and want cars and air conditioning, the world needs to increase production of oil and oil substitutes about three million barrels per day each year. Equivalently, the world needs to increase production one hundred and fifty million tonnes per year per year.
Predicting housing prices
the housing market in California has pretty much hit bottom, and the same is largely true in most of the places in the US where prices went up to the sky, then fell to earth
How to do health care right
The American health care system is socialism without a central plan, and capitalism without markets or prices.