Comments on: Maybe He Should Have Worn a Cardigan

By: Gene Hoffman

Gene Hoffman — Wed, 05 Oct 2005 06:46:23 +0000

One responsibility we've always vested in the American Federal Executive is foreign policy. With Iran being quoted over the weekend as willing and threatening to use oil as a nation security strategy, I don't think its out of bounds for the President to attempt to use moral persuasion to cause the California effect.

What is the California effect?

As badly as CA state government screwed up the electricity market a couple years back the far scarier thing for the energy industry was how easily California cut back 15% of energy usage. I am by no means a crazy environmentalist, but I bet the additive small conservation steps around during a true period of economic or strategic test can cause about the same thing to happen in the raw oil consumption of the entire US consumption. If I'm not mistaken, Iran is about 15% of worldwide oil exports.

Should we always do that? Heck no. Should we flex it once in a while? Sure seems opportune - especially amidst domestic crys of wolf over the economy.

Peak oil was sure true... Peak oil PRICE... Why not add insult to injury and conserve a little extra as the price drops further. I'd love the oil producers to feel a little extra pain right about now.

By: Max Lybbert

Max Lybbert — Tue, 04 Oct 2005 22:50:35 +0000

Perhaps I'm too optimistic, but I interpreted the message from the White House to be, "We will not fiddle with price controls. Prices are going up, but you may be able to limit the increase by using less."

Thing is, as the linked to article says, the increase (with gasoline) simply won't be enough to encourage fuel conservation. When it comes to heating bills, that may be different. But then again, most people already have a good handle on efficient heating (at least in relatively new houses -- one of the big causes of death in "new" houses is the fact that they are airtight and carbon monoxide builds up faster in them).

By: Gregg

Gregg — Tue, 04 Oct 2005 22:18:31 +0000

Lower demand means lower prices. In light of an unprecedented supply shock, I do not consider what the President said as a "Jimmy Carter" moment. There will be less of everything to go around. It really is that simple.

I would hope that all of this would lead to longer term development of a more resilient infrastructure.

By: honestpartisan

honestpartisan — Tue, 04 Oct 2005 21:26:43 +0000

Any concept of externalities? Prices don’t necessarily reflect everything.

By: Marnee

Marnee — Tue, 04 Oct 2005 20:49:46 +0000

Okay, but I have to ask one thing:

" I won't pretend that prices are inefficient allocators of resources;"

Inefficient compared to what? I mean doesnt anyone have any concept of how quickly prices are adjusted and that they are adjusted minute by dammed minute. Tell me anything else that could allocate scarce resources better! We are not omniscient.

By: Duane Gran

Duane Gran — Tue, 04 Oct 2005 18:39:21 +0000

While I’m no stranger to critiquing the administration’s energy policy, I think the hostility toward his statement is unfounded. Instead of assuming that Bush wants to undermine the free market, it is far more plausible that he anticipates many families will face hardship when heating costs rise by 65% this winter. A little conservation now may make the winter a little less harsh, financially speaking.