What many people seem to be forgetting of late is that the world economy was already in a downturn before government lending, fiscal, and monetary policies (and the credit crises that they created) were readily apparent.
Before Lehman Brothers folded. Before Fanny and Freddie got caught holding the bag for subprime lending. Before WaMu and AIG were caught with billions upon billion of dollars of overpriced mystery assets.
Before any of these causes were on the lips of unemployed Americans, oil had already spiked to levels that helped batter the airline industry, the automobile industry, the shipping industry, and helped to shave the value of whatever was contained within the purses and wallets of Americans. No product that was shipped by rail, or truck, or car could be delivered as cost effectively as it could just a few months before.
People tired of dumping $60 in the gas tank at every fill up and began to curtail vacations, unnecessary trips to town, restaurant fare, and many other expenditures that in previous years they would have made without hesitation. Henry Waxman even ceased his weekly trips to the salon to have his nostrils waxed.
There was a lot of talk about fixing the perceived problems of the energy markets though the specific problem of oil supply was not addressed. Bart Stupak deftly waved an accusing finger in the air and asserted it was the fault of evil oil companies and selfish speculators. When energy pundits and free marketeers demanded that America expand her oil fields and other established energy capabilities they were scoffed at. Instead, they were greeted with talk of cap and trade, carbon credits, clean and renewable energy, and an Earth in the death grip of CO2.
"It will take too long to bring this oil to market."
"Oil prices are unnecessarily high as a result of evil oil companies."
"Speculators are the cause of the problem."
Despite all of this, America's befuddled leaders specifically sought out a course of action that would guaranteed exorbitant energy prices in the future--and that future is arriving quickly.
They did this by refusing to allow oil and natural gas production in areas that have proven expansive reserves. They did this by hobbling the established energy industry in the licensing and construction of energy facilities. And they did this by pumping the economy so full of printed dollars that when inflationary pressures begin to pop up the speculative markets will shift their investments into commodities--including oil.
Get ready for an expensive driving season and for distant cries of GOUGER! from our hapless political pet, Bart Stupak.
Wednesday, April 07, 2010