June 12th, 2008

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A few thoughts about the current oil bubble

First of all, I'm not really sure it's a bubble. Right now the international supply isn't increasing, and the demand is going up thanks to the expanding economies of India and Red China. So you would think that the obvious answer would be to increase the supply, right? The House GOP Caucus certainly thinks so:


So do most of the American people, apparently. They're apparently bright enough to understand what "watermelon" Democrats (including my own Congresscritter, God rot him) don't or won't get: even if today's drilling doesn't produce oil or gas for ten years, it affects oil futures prices now. You have to wonder if Daniel Henninger isn't onto something when he asks if we're not a serious country any more. Perhaps worst of all, given a golden opportunity to stick the current price rises to Obama and the Democrats, Senator McCain passes it up in favor of mindless populist oil-company bashing and don't-drill bipartisanship. I can't help thinking that if Ron Paul had half a hair on his ass, he'd come out swinging at the GOP convention in Saint Paul and call for adoption of the House GOP plan. Gasoline at $2.069 would beat the hell out of $4.049, and it might well allow him to steal the nomination. Which would be pretty damn funny, but then I have a sick sense of humor.

(Partially inspired by joel_rosenberg's post here.)