Category: economics

economics

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 …

economics

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 …

economics

Exxon blows it

Bryan Caplan wonders if oil prices are a bubble. When oil spikes abruptly, that means people made incorrect investment decisions – under invested in exploration, development, and gas to liquids conversion. A simple back of the envelope calculation tells me they are still under investing. Exxon recently abandoned gas to liquids plant that would be profitable if oil remains above forty dollars to fifty dollars a barrel. But if everyone …

economics

Vote Obama

The presidents that have done the most to smash capitalism have never been Democrats, because anti capitalist Democrat presidents have always found themselves paralyzed by gridlock – the pro capitalist faction unites along party lines, and the federal government system locks up, as it was designed to do. The founding fathers intentionally constructed the federal government so that it would be slow and inefficient at making large controversial changes. The …