Economics

[Mike C]

Originally Posted by Michaelangelica

I just stumbled across this good web site
It would be handy for economics students, teachers or those just interested to learn more.
EconSources!

The best way to have a prosperous economy is to

SHARE THE WEALTH.


By spreading the wealth around evenly, the MASS purchasing power enables the people to buy the merchantise that they create in the first place.

Mike C

[Biochemist]

Originally Posted by Buffy

The current administration's response to it might however be most appropriate to a fantasy world, but that is not a reflection on the science of Economics...

Oh, Buff. Pick on a policy, not a person. Let's start a thread on energy policy.

Bio

[nutronjon]

I want to acknowledge the intelligent post here. They are why I am posting in these forums and not other ones.

Can we stay with economics, please.

Buffy I googled government subsidized oil and found 85 Pages. The oldest one is dated in the 80 tys, the oldest book I have on the subject is a 1990 book. So how long do you think people have been talking and thinking about the fact that oil is finite? Just weeks ago, with shock, Bush asked, who would think using corn for ethanol would send the price of food up. We need a president who understands such matters and Carter is the only politician I know of who understood. (Not even Obama has a grip on this reality.) Carter was President in 1977-1981, following the 1973 OPEC oil embargo. He was a farmer. Guess who knew what using corn for fuel would do to food prices? Notice it is during his administration that this vitally important information about conservation and oil, started coming out. Note that Reagan told us conservation was not necessary, and everyone believed him, and the country worships Reagan for what he did to our economy, AND PLEASE NOTE, REAGAN SLASHED DOMESTIC BUDGETS AND POURED OUR MONEY INTO MILITARY SPENDING, and destabilize the mid east by giving this country weapons and not that one, escalating the likelihood of war and the destructive potential of war. This includes allowing Israel to become a nuclear power, and greatly favoring Israel with our military gifts and technology, and annual foreign aid payments. This is about more than energy policy, and I think we should stay with this discussion.

I perhaps get over excited about these things, but you know how proud we are of being the richest nation in the world. You know how that makes us think we are superior, and therefore have the right, and perhaps God's directive, to dictate to the rest of the world what needs to be done.

Before WWII we barely had a standing army. We were very unprepared for war. We sure didn't see ourselves as the world's police. However, we were the world's supply of oil, and new oil fields were being discovered, with a whole new importance of having control of the mid east. However, this was not totally unknown before WWI. The Rothschild's were aware of oil in the mid east, because they had developed a trade in oil for kerosene. This competition for control of regions, should included knowledge of the first and second world wars, as well as knowledge of the Cold War, and our present occupation of the region. When the USSR fell, I am sure the Neocons had a moment of panic. Without communist, how could the US justify its activity in the mid east? Thank goodness for terrorist, who give the US an excuse to maintain a strong military strength in the mid east. To bad their lies were discovered.

I am kind of loosing the point- our wealth and abundance, and position in the world is, because of what oil did for our country. While we turn up our noses at those undeveloped third world countries, and justify using their soil to feed our nation while the poor people in those countries starve, let us give some thought to what makes one country poor and another rich. LET US TALK ECONOMICS, OKAY? The whole picture, not just energy policy, but water and food too.

Green Scissors: An Overview of Senate Energy Bill Subsidies to the Fossil Fuel Industry

Subsidies for oil and natural gas began in 1916 with the federal government creating its first tax breaks for oil and gas production. After 90 years of taxpayer-funded subsidies, the oil and gas industries are flourishing. Yet, taxpayers continue to contribute between $4 billion and $30 billion annually to the energy sector.

The Quaker Economist #142 - Oil Addiction

Many countries of the world subsidize their energy industries, but the USA and several third world countries (Venezuela, Indonesia, Malaysia, and Bolivia, for example) stand out in this regard. These are the countries that subsidize gasoline, on the theory that lower gasoline prices will help domestic business and cause more rapid growth.

I moved on to bio-diesel, which doesn't require as much fuel to produce as ethanol, but still has the problem of turning food into fuel. As America became SUV obsessed, I wrote editorial pieces and tried to get people to realize that the low fuel prices were temporary. We needed to find other ways to fuel our lifestyles than imported oil, for our security, self-sufficiency, our economy, and for the environment.

Peak Oil News: Debate: Is the ethanol boom about to bust?

Now, with the support of the current administration, we are subsidizing ethanol as an alternative to imported oil. Our net gain in energy is almost negligible. It raises the price of grain, corn, and anything that requires grain: cattle, breakfast cereal, chicken, even other foods that would be grown but are converted to grain production to fuel the ethanol industry.

Were ethanol production not subsidized, it would fail for economic reasons. I support the concept of subsidizing an emerging industry if there is a viable future, but ethanol will eventually become the "Great Boondoggle" of this period in America's history of fuel consumption.

As electric cars, not hybrids but all electric, become viable, which we are close to achieving, the ethanol industry will become extinct. How long will that be? I'm guessing it will be less than ten years from now. By the time enough plants are built and the government realizes that we are subsidizing a doomed industry and withdraws its support, most will not be paid for and there will be a bankruptcy crisis in the ethanol industry, which we'll have to bail out or continue to support with subsidies. Farmers, who are investing in ethanol co-ops will lose their farms to corporations ready to consume the farm land, as more farms are turned into cash cows for corporations who will use imported laborers at low wages, deplete the land's nutrients and then build residential sprawl across former farm land.

Folks, we are facing a soil and water crisis and using corn for fuel is perhaps the worst thing we can do. Corn crops are hard on the soil, depleting it faster than other crops. We have been consuming underground water faster than it is replaced, and some areas, like in Azizona, have sunk 15 feet. These aquifers are being destroyed and can never again be refilled with water when the land collapses. Please, this is about more than energy policy, it is about who lives and who dies.

[Biochemist]

Originally Posted by nutronjon

Can we stay with economics, please.

Nutro, if you want to say on economics, please refrain from inserting a litany of political jabs/conjecture in the starting post.

So how long do you think people have been talking and thinking about the fact that oil is finite?

Oil is indeed finite, but it is a different "finite" depending on price. At $120/barrel, there is more oil in the tar sands in the western US that there is recoverable in Saudi Arabia.

We need a president who understands such matters and Carter is the only politician I know of who understood.

Sounds like economics to me

Note that Reagan told us conservation was not necessary, and everyone believed him, and the country worships Reagan for what he did to our economy..

More economics?

REAGAN SLASHED DOMESTIC BUDGETS AND POURED OUR MONEY INTO MILITARY SPENDING

Ah, economics. Domestic spending rose under Reagan. Military spending rose faster

destabilize the mid east by giving this country weapons and not that one, escalating the likelihood of war and the destructive potential of war. This includes allowing Israel to become a nuclear power, and greatly favoring Israel with our military gifts and technology, and annual foreign aid payments. This is about more than energy policy, and I think we should stay with this discussion.

It would be really great if you could do that. I am pretty sure that some intelligent folks believe that our support for Israel is a little broader than energy policy.

...you know how proud we are of being the richest nation in the world. You know how that makes us think we are superior, and therefore have the right, and perhaps God's directive, to dictate to the rest of the world what needs to be done.

...and the economics??

Without communist, how could the US justify its activity in the mid east?

Is this a serious question?

Thank goodness for terrorist, who give the US an excuse to maintain a strong military strength in the mid east. To bad their lies were discovered.

..and the economics?

I am kind of loosing the point- our wealth and abundance, and position in the world is, because of what oil did for our country.

I think it could be fairly argued that the US economic position is based at least several of the following (unprioritized):

1) Abundant natural resources (of which oil is only a part, and only important since about 1900)
2) Liberal immigration policies, which fostered acceptance of a large number of hard-working entrants into the job market
3) Open markets
4) Low taxation (although less true now than in 1900)
5) Significant cultural orientation toward success based on hard work, versus success based on class or entitlement
6) Orderly markets, orchestrated under orderly rule of law
7) an educated workforce

Putting "oil" as the primary engine seems a little narrow. Remember that Japan trounced the US (in terms of growth and competition) for most of the last half of the 1900s, and they have NO oil at all.

While we turn up our noses at those undeveloped third world countries, and justify using their soil to feed our nation while the poor people in those countries starve,

I am not sure about this, but I think the US is a net food exporter. Could someone else editorialize on this?

let us give some thought to what makes one country poor and another rich. LET US TALK ECONOMICS, OKAY?

In that case, lets talk about things that make all countries rich (not trading off one for the other). NAFTA (for example) benefited all three participants. Even though polls show that over half of all respondents say in each country think the the other two countries benefited more (a conclusion that is arithmetically impossible), the benefits of NAFTA (for all participants) were pretty clear. Is this an example of what you mean?

..we are facing a soil and water crisis and using corn for fuel is perhaps the worst thing we can do.

Agreed.

Please, this is about more than energy policy, it is about who lives and who dies.

Maybe. But US support for corn-based ethanol is a LOT more about farm policy (that is, pandering to farmer votes in the midwest) than about energy policy

[nutronjon]

I think it could be fairly argued that the US economic position is based at least several of the following (unprioritized):

1) Abundant natural resources (of which oil is only a part, and only important since about 1900)
2) Liberal immigration policies, which fostered acceptance of a large number of hard-working entrants into the job market
3) Open markets
4) Low taxation (although less true now than in 1900)
5) Significant cultural orientation toward success based on hard work, versus success based on class or entitlement
6) Orderly markets, orchestrated under orderly rule of law
7) an educated workforce

Putting "oil" as the primary engine seems a little narrow. Remember that Japan trounced the US (in terms of growth and competition) for most of the last half of the 1900s, and they have NO oil at all.

Okay, let us take oil out of the economy and return to 1899, and see how our economy grows. What are we using for light? What are we using for transportation? Do we have roads? Why? What are they made of? What is in the local grocery stores and how did it get there? Here is some information for determining what is in a grocrery store.

World Without Oil
Agribusiness is totally dependent upon large machines and artificial fertilizers and pesticides in order to raise, harvest, and transport the vast quantities of grain, fruit, and vegetables we enjoy today. Fertilizers and pesticides require oil and natural gas, not only in their distribution, but in their manufacture as well. Also, feed for beef cattle, chickens, and turkeys depends very heavily on these same fertilizers and pesticides. When cheap sources of oil and gas are not readily available, the chemical industry passes the increased costs on to agriculture. The increasing prices for fertilizers and pesticides then results in increased food prices for the rest of us.

Here is a great site for those curious about a world without oil

Learn About :: World Without Oil
“As for me, I’m a different person
thanks to WWO.”
PLAYER MTALON
WWO’s greatest success may be: it was engrossingly, breathtakingly fun. More than immersive, it was meaningful and satisfying: “Usually games take away from real life,” player Ironmonkey wrote, “but WWO taught me a lot, lowered my electric bill, and focused me on doing things that matter to me.” WWO’s success on a small budget has opened the door for similar games that can engage mainstream Internet users with climate change, education reform, governmental policy and other timely, vital issues.

And just for fun, what does the second world war look like without oil, and what is the position of the US at the end of this war, without oil?

[Zythryn]

Nutronjon, I appreciate your desire to have a discussion without emotional arguments, name calling, etc.
However, as Biochemist asked, why would you post such a desire for a discussion about the facts and then through in a bunch of inflamitory comments about politics and politicians?

Okay, let us take oil out of the economy and return to 1899, and see how our economy grows. What are we using for light? What are we using for transportation? Do we have roads? Why? What are they made of? What is in the local grocery stores and how did it get there? Here is some information for determining what is in a grocrery store.

I am not sure what your goal is here. You can basically look at history to see what we would do without oil, expecially since you took us back to 1899.
This has very little in common with what would happen without oil today. The genie is out of the bottle and you can't go back
If oil supplies started decreasing rapidly (10% a year) we would quickly come up with other alternatives.
Oil would stop being burned for electricity.
Autos would rapidly start using more efficient engines or alternative fuels (not ethanol).
More freight would shift to trains, less to trucks.
More nuclear plants would be built for future energy production (10-15years).
More wind, solar, geothermal and hydro generators would be built.

Don't get me wrong, this would be a major economic upheaval. And I think a supply decrease of 10% a year is actually a best case scenario as the end result is painfully obvious.
I think if we get into a 1-2% decrease each year people will continue to think: 'oh, we can make that up, it isn't really a problem'.

Now, if you want to talk politics, I am all for it, but I would suggest it in another thread so we don't cloud the economics side of things

[Michaelangelica]

[quote]

Originally Posted by Buffy

You didn't look it up did you?

Suckered again.
I wonder if Galbraith could make millions again today. He seems to be one of the few economists who have.

Do you see differences between the US and Australia on this topic? What's Kevin doing to clean up the mess?

No the picture here is very different, yet the results are the same.
With a little help from the sub-prime-crisis (My local council -always crying poor -just blew 25mil on sub prime ivestments.)
The banking regulations here are good, few cowboys survived the 80's.
Some banks are even rediscovering customer service.
Home loans are lent to people who can afford them in a very tight housing market. In Sydney it is almost impossible to rent a house let alone buy one.
For the last 18 months the Oz 'Fedral Resevre' equivalent has been putting up interest rates to over 7%. (?)I think we are up to about twelve increases now.(They are independent of government)
This has not slowed the economy or spending.
Our dollar is rising against US$ and some others.
Unemployment is at a 12 year low.

But the high house costs ($500,000 -2mil = in Sydney) has made the housing interest rates (well over 10%) begin to bite. So foreclosures seem imminent.

The banks have also added 1% for the "difficulty in getting funds" caused by the US sub prime woes.

As I understand it USA loans were made to people who couldn't afford it in a poorly regulated market and with a 20% housing oversupply.
You Reserve has been putting down rates (to 1.5% now?) and you dollar has been falling, unemployment is up.

So you see, two diametrically opposite scenarios with the same effect -people are finding it hard put a roof over their heads.
While I guess the next step is to bail out the rich and stupid.

So are traditional economic "predictors/models" working?
You put the price of money up people slow spending - no the opposite is happening in Oz.
You put the price of money down people start spending -no the opposite is happening in the USA.

Politics is not the art of the possible. It consists of choosing between the disastrous and the unpalatable,
Buffy

I want better than that from my politicians.

Sorry for my slow reply. I have been a bit ill lately.

[Biochemist]

Originally Posted by nutronjon

Okay, let us take oil out of the economy and return to 1899, and see how our economy grows.

OK

Originally Posted by Nutro

What are we using for light? What are we using for transportation?

in 1899, it was (in order) coal, railroads and horses. Coal is still a large part of our energy supply, and it would be even greater were it not for environmental restrictions.

Originally Posted by Nutro

Do we have roads? Why? What are they made of? What is in the local grocery stores and how did it get there? Here is some information for determining what is in a grocery store.

I am not sure what point you are making now. There is little doubt that under any scenario, any productive economy needs an energy source. They will either produce it domestically (as most economies attempt) or they will buy it (like Japan). Oil just happened to be a relatively inexpensive energy source over the last 100 years.

Originally Posted by Nutro

And just for fun, what does the second world war look like without oil, and what is the position of the US at the end of this war, without oil?

I don't understand the first part of this question. But the second part is a little easier. There is little doubt that the US was advantaged (at least slightly) by domestic oil reserves, but that was not the major drive for the US economy. The US could have had no reserves at all, and it would not have materially altered the growth from 1950-2000. Oil was cheap (from any source) until the 70s. Then the volatility drove a lot of hand-wringing over the market position of OPEC. But if the price of oil per barrel rises above $120 and stays there, the US (and Canada) will again have domestic supply for fossil fuel through the next several hundred years.

[nutronjon]

Originally Posted by Biochemist

OKin 1899, it was (in order) coal, railroads and horses. Coal is still a large part of our energy supply, and it would be even greater were it not for environmental restrictions. I am not sure what point you are making now. There is little doubt that under any scenario, any productive economy needs an energy source. They will either produce it domestically (as most economies attempt) or they will buy it (like Japan). Oil just happened to be a relatively inexpensive energy source over the last 100 years. I don't understand the first part of this question. But the second part is a little easier. There is little doubt that the US was advantaged (at least slightly) by domestic oil reserves, but that was not the major drive for the US economy. The US could have had no reserves at all, and it would not have materially altered the growth from 1950-2000. Oil was cheap (from any source) until the 70s. Then the volatility drove a lot of hand-wringing over the market position of OPEC. But if the price of oil per barrel rises above $120 and stays there, the US (and Canada) will again have domestic supply for fossil fuel through the next several hundred years.

You came the closest to answering the questions, and I can not tell how much I appreciate that. For the question of my intentions, if everyone would attempt to answer the questions I ask, the intention of them would become clear. Thank you Biochemist for your efforts.

Zythryn, you used a pretend reality to answer the questions, so your answers are invalid. Heck, may be Jesus is going to save us, or aliens might land with all the solutions to our problems, but, for the purpose of dealing with reality, please, avoid using your wish list for the answers to the questions.

Thinking of horses and steam engines that burn coal, if we never had oil, because let's pretend there is not such thing, what does our country look like? Where are the lines of transportation. Where are the centers of wealth? How is food produced and distributed (keeping in mind the lack of chemical fertilizers, pestisides and herbisides). And please, what do we use for making roads without oil? Focus as clearly as you can on these questions, okay. Kind of like if an economics professor is asking the questions and you need a good grade.

Let us really pay attention to WWII without oil. Come on, you all can do this.
Let us pretend oil was never discovered. Take out of WWII everything dependent on oil. What does that war look like now? What does lack of oil do to agriculture and military technology? Where is the power, and likely victory, going to go? How does the lack of oil change things?

If there had been no oil in the world, Japan would not have bombed the US. My questions about oil and war can generate very stimulating discussion, directly related to economics and our world view. To help develop the comprehension of this fact, here is part of a google page.

How Important Was Oil in World War II?How Important Was Oil in World War II? By Keith Miller ... Without it World War Two could never have been won. For oil, once processed or refined in various ...
hnn.us/articles/339.html - 25k - Cached - Similar pages - Note this

CHAPTER FOUR: Standard Oil Fuels World War IIDuring World War II Standard Oil of New Jersey was accused of treason .... and war would have been impossible without Farben's synthetic rubber production. ...
reformed-theology.org/html/books/wall_street/chapter_04.htm - 32k - Cached - Similar pages - Note this

The Role of Synthetic Fuel In World War II GermanyIt is interesting to note that without Austria, West Germany’s crude oil production ... finishing a manuscript on the German war economy of World War II. ...
The Role of Synthetic Fuel In World War II Germany - 35k - Cached - Similar pages - Note this

European Theatre of World War II - Wikipedia, the free encyclopediaOne of the major problems faced by the Nazi war machine in World War II was a shortage of oil. For this reason, Germany decided to give up on Moscow for the ...
en.wikipedia.org/wiki/European_Theatre_of_World_War_II - 135k - Cached - Similar pages - Note this

Oil Strategy in World War II | Oil150.comWorld War II-by far the greatest, and probably the most sanguinary, conflict ever fought-dramatically emphasized the indispensability of oil to any strategy ...
Oil Strategy in World War II | Oil150.com - 15k - Cached - Similar pages - Note this

[Zythryn]

Originally Posted by nutronjon

Zythryn, you used a pretend reality to answer the questions, so your answers are invalid.

Sorry nutronjon, perhaps I didn't understand your question. I was responding to this:

And just for fun, what does the second world war look like without oil, and what is the position of the US at the end of this war, without oil?

Now, since your question was phrased as a what if, then my answers were phrased as a what if.
So how is it they are invalid?
(Thank you for your patience)

Originally Posted by nutronjon

Thinking of horses and steam engines that burn coal, if we never had oil, because let's pretend there is not such thing, what does our country look like? Where are the lines of transportation. Where are the centers of wealth? How is food produced and distributed (keeping in mind the lack of chemical fertilizers, pestisides and herbisides). And please, what do we use for making roads without oil?

To quote someone I am sure you will reguard as a valid poster:

Originally Posted by nutronjon

you used a pretend reality to answer[pose] the questions, so your answers[questions] are invalid.

Originally Posted by nutronjon

Let us pretend oil was never discovered. Take out of WWII everything dependent on oil. What does that war look like now? What does lack of oil do to agriculture and military technology? Where is the power, and likely victory, going to go? How does the lack of oil change things?

Originally Posted by nutronjon

you used a pretend reality to answer[pose] the questions, so your answers[questions] are invalid.

Originally Posted by nutronjon

If there had been no oil in the world, Japan would not have bombed the US.

Originally Posted by nutronjon

you used a pretend reality to answer[pose] the questions, so your answers[questions] are invalid.

Originally Posted by nutronjon

My questions about oil and war can generate very stimulating discussion, directly related to economics and our world view. To help develop the comprehension of this fact, here is part of a google page.

Here I agree with you completely. I personally think this is a fascinating subject. And I would love to discuss this more. However if I am not allowed to speculate, it is difficult to discuss someone using speculation