I've been thinking about the prices of oil lately - with gas at an all-time
high, President Bush has repeatedly declined to allow dipping into the
defense national oil reserves in any sort of effort to keep the prices down
- as (IIRC) President Clinton did in the 90s.  This has in the past struck
me in a couple of different ways 

 

1)       It's an effort to keep his oil interests healthy, and therefore
corrupt in some manner

2)       It's not right to dip into the war chest - we need those reserves
in case we really need them in war, and he is doing the right thing. (His
explanation)

 

My main inclination is to believe that he is doing the right thing (#2) but
for the wrong reason (#1).  However, the economist side of me is starting to
realize that there is a third rule coming into play here:


3) In order for real achievements in reduction of dependence on oil (not
just foreign oil), there must be incentive.

 

Of course, this incentive is higher gas prices.  Now that the gas prices are
so high (comparatively speaking), people are starting to flock to the
high-mileage, low-emission vehicles like the Toyota Prius and Honda Insight.
Should the prices get really high, as in Europe, we could even see a real
reduction in the US of dependence on the four-passenger vehicle - imagine
riding a moped or even a Segway to work on a daily basis.  

 

The Democratic party has long been thought of as the more "environment
friendly" party.  I'm starting to see that the course of action - allowing
the price of gas to fall where it may - is actually a wise course of action
for the long term for the goals of the Democratic party.  There are
immediate short gains for the oil barons of the Republican party, which
makes them happy as well. 

 

As far as the President doing the right thing, I still lean towards thinking
he's doing it for the wrong reason.  (blame that on the Iraq war fiasco).
Just last week, he had a conversation with the Saudis about lowering oil
prices.  He told them that if they did not allow more daily production, they
were going to hurt their oil interests in the long run.  He's absolutely
right.

 

I guess there's a balance here between immediate prices and long-term
benefits.  As much as I enjoy driving my 8-cylinder Ford Mustang Bullitt,
even I see now that driving a car that uses much less gas is a wiser course
of action, both environmentally and financially.  

 

I guess my whole point is that the President's Oil Policy is the right thing
to do.

 

Comments?

 

- Matt Small 



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