dijous, de setembre 01, 2005

Reflections on the Recent Fuel Prices, or "Time for Change"

"Time for a Change"
by Gwyddno Schenectady


I spend a week or two almost every summer in Wales. This summer I was paying between $6.04 and $6.40 a gallon, given an exchange rate of $1.77 to the pound. It would easily cost me $60 to fill up my little 4 cylinder 5-speed Vauxhall Corsa that I was renting. That sounds pretty awful.

My main car is a 1998 Saturn SL, also a 4 cylinder 5-speed which, like the Corsa is unable to get out of its own way. It also averages about 42 miles to the gallon on the highway. Even so, coming home to higher prices than those I left was a bit startling, but not as startling as the current $3.29 I paid today at our local Getty. Already in Upstate some prices are nearing the $4.00 mark for regular. Atrocious, outrageous, and dangerous for our, and the world's economy, yes, especially if the prices stay that high. However, we haven't been dealing solely with a national economy for the last century, if even then.

The early harbingers of our Great Depression began in Europe after the first World War and spread globally. Already in 1930, we were dealing with a global economy, but the weakness of the European economies didn't begin to affect us till more than 10 years later. In our current ultra-globalized economy, drastic downturns in local economies could impact world markets in perhaps as little as 10 months. No, no - I'm not prognosticating another Great Depression - but a long lasting world recession, I wouldn't be surprised. If the price of automobile fuel in America stays at such high prices, prices reached in so drastically short a time, ordinary working and working poor Americans are going to be hard-pressed to spend what little disposable income they have on other things. Even middle and upper middle class Americans may begin rethinking where they spend their dwindling cash surpluses. The United States is, as you all know, a major market for everyone on the planet. If we aren't buying, others aren't selling, and they in turn can't buy. China, as much as it has grown economically, will not be unaffected by a drastic reduction in US spending. The money on our little blue planet is dynamic and travels in all directions, but if folks' pockets hurt, they won't stick their hands in to them spend any more clams than they have to. A drastic reduction in clams circulation will leave us all in the drink - never mind that rising fuel prices are quickly reflected in nondurable goods, such as the goodies we like to stuff in our faces and, god help me, alcohol (bath tub gin Anna and Daryl??). For those of us in the Northeast, especially here in good old Upstate New York, with fuel oil prices also likely to skyrocket, the winter of 2005-2006 might really be "the winter of our discontent."

All that from one storm that affected one relatively small part of the earth...

Then again, everything is relative, as this 2003 article from the Cato web site points out. For my part, I do take some cold comfort in being better off, relative to gasoline prices, than we were in 1920.

"The late great economist Julian Simon, a Cato Institute adjunct scholar, was famous for teaching us that it is most important to look at the very long term trends in prices of natural resources, if one wants to make predictions about the future. Here is what Simon's long term data on energy and gas prices tells us. Gasoline prices paid at the pump have been on a steady rate of decline since the 1920's, with the obvious exception of the 1970's, when we faced an OPEC embargo and gasoline lines. In 1920 the real price of gas (excluding taxes) was twice as high as today. If the price of gasoline relative to wages were comparable today to what they were in 1920, we would be paying almost $10 a gallon for gas. (See The State of Humanity, by Julian Simon, Blackwell Publishers, 1995, Chapter 28.)" Quoted from the Cato Institute's web site at URL: http://www.cato.org/dailys/09-06-03.html

Oh, by the way, it goes without saying that Blodwen, my 1983 4.2 liter 6 cylinder automatic Jaguar SJ-6 Vanden Plas is stepping out on the town far less frequently, although with two gas tanks, she's still rolling with gas that only cost me about $2.50 the last time I filled them up before I went overseas.

My point in this now long diatribe-cum-essay is that it just seems to me that it's high time we stopped accepting this chicanery. The world, especially not the United States, does not need to be dependent on foreign oil. We have enough arable land to grow enough corn to fuel E85 and E95 (which are mixtures of ethanol and 15% and 5% gasoline respectively) vehicles for decades if not for centuries to come! Moreover, we can physically convert our old cars to run on E85 if the EPA and the federal government would allow the higher emissions from the converted cars (see http://www.e85fuel.com/index.php for some interesting, and perhaps, annoying reading). Even though I believe in the motto of the Cato Institute and still believe in my pipe dream Libertarian society, I don't want to piss away the environment either. It's true that the converted cars will pollute more than they had before conversion. On the other hand, millions of cars are already E85 compatible, and in the coming decades more and more will be (interestingly one the of the big investors in E85 is Shell Oil - irony? I think not!). Eventually almost all the old cars would wear out and be replaced with environmentally friendlier E85 automobiles (technically known as FFVs - flexible fuel vehicles).

However the proof that we are not a truly free market society, functioning in the more or less Jeffersonian (voire Libertarian) model of government envisioned by our vagabond forefathers (Theists, potsmokers and/or fornicators such as the majority of them were - my apologies for anyone with Christian Fundamentalists revisionist tendencies...) is in the fact that no entrepreneurs are making it to the fore to proffer the obvious solution to the problem. Big Business is not on the side of Libertarian principles, by the way, nor is anyone else who chooses to squelch personal freedom, civil liberties or personal wealth for the sake of the so-called common good when it's merely a masquerade entitling a very few to a life of happiness and dross while the masses struggle to choose between the electric bill, the rent/mortgage, food and medicine.

Maybe this emergency will shock enough Americans out of their complacency to see an eventual major shift in our paradigm, away from the soft-soaping, sweet nothing platitudes of the Republicrats to an all out open dialogue, debate and battle of wills between people of conscience who identify themselves as either Libertarians or Greens, but mostly as actively engaged, real Americans, and not just kowtowing plebeians in a world dominated by status quo patricians reciting ad nauseam the empty words of errant patriotism, all for the sake of their pork filled pockets.

The end of my sermon, friends, Romans, countrymen, is simply, think the next time you flip that lever, poke that chad, check that box or click that mouse when next you enter your polling place. The American democracy is still working, and it doesn't have to be this way, unless we let it. The longer it stays this way, however, the longer and harder it will be to effect any appreciable change at all...