Friday, January 18, 2008

The economy and energy policy

I'm not an economist, so you can take what follows with a grain or two of salt.

With the stock markets tanking to kick off the new year, and other economic indicators such as jobs and employment reports not looking too great, there's talk in the news that we're entering a recession. While the money geeks on the financial news shows prattle on about the intricacies of the sub-prime lending market crisis, it doesn't take a financial genius to see where a large part of the problem lies...oil prices. The simple truth is that you can't buy a single thing whose retail price isn't affected by the price of oil. Whether it's a direct cost of production, such as the gas you put in your car, or a more indirect effect such as the cost of transportation of goods, oil prices hovering around $100 per barrel have an effect on the cost of just about everything.

Even if a manufacturer doesn't immediately increase the unit price of its goods, they must make up for the added cost by cutting expenses, which takes money out of somebody's pocket, whether it's that of a laid-off employee or less money spent with a supplier. And if they do nothing at all, the money comes out of the shareholders' pockets. Of course, if the manufacturer and/or retailer does increase the price, then it's your pockets and mine that are a little bit lighter. With a commodity such as crude oil, the effect is incredibly pervasive because not a single segment of the economy is unaffected by changes in the market price of oil.

Which brings us to our energy policy. While the left makes the claim that our energy policy is driven by Big Oil, it would seem to be driven more by a pack of retarded monkeys. Or maybe OPEC, since they're the only ones who actually benefit from it. Come to think of it, maybe someone should look into the lobbyists who argue for a "green" energy policy. It wouldn't surprise me to find that some of their money comes from OPEC member states.

The sad reality is that we have no energy policy. Or, to be more precise, our energy policy is paralyzed by idiots on the left who seem to think we can throw a switch and have all our energy needs met by wind, sun and the spilled latte from Prius owners. While I'm a big fan of developing alternative energy sources, we have to deal with the reality of today, which is that we have an entire global economy which depends on oil. If that global economy goes into the crapper, nobody will have the financial resources necessary to research and develop affordable and renewable energy sources. Except for OPEC, and that would be, you know, not exactly in their self interest.

What our next President needs to do is put forth an energy policy that includes:
  • Immediate construction of new nuclear power plants. We've not built a single new nuke plant since the Three Mile Island incident in 1979.
  • New off-shore oil drilling and exploitation of the ANWR oil reserves. Concurrent with this effort should be the expansion of our oil refining capacity.
  • A Manhattan Project-like program to develop inexpensive and energy efficient methods to produce and distribute hydrogen. The hydrogen fuel-cell technology for vehicles is already fully baked, and a hydrogen economy would be an OPEC killer.
I won't even get into the discussion of global warming. There are enough good reasons to develop alternative energy sources that are far less contentious, namely the marginalization of oil producing states that are hostile to America's interests as well as cleaning up the air a little bit.

We need to face facts that as long as we let the environmental and global warming movements control the narrative of energy policy, our economic woes will worsen and we'll lack the financial resources needed to develop viable alternative energy sources. One cycle will feed the other.

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