As I passed a few gas stations this week and saw $1.89 regular, less than half the cost just a couple months back, and after the initial sense of relief that a tank will less than $30 and not nearly $60, I can’t help but wonder of the longer term impact of this dramatic fall in prices.
One of the unintended consequences of this drop is that the talk of finding alternative energy sources has dropped from being a huge issue early in the recent election campaign to a topic barely discussed. There was also talk during the campaigning of creating ‘green’ jobs based on these alternative energy sources. I understand that there’s a delicate balance, that, at least in the short term, the high gasoline prices was doing far more harm than any future good that would come of it. I just hope we don’t become complacent and assume these low prices will continue indefinitely.
Joe
It seems appropriate that I’ve reserved Thursdays to discuss the Money Merge Account and Thanksgiving is celebrated on Thursday. I know, I’m a bit predictable. Here it comes. MMA is a turkey. Happy Turkey Day.
I believe the Turkey is saying “the factorial math will save you a bundle, you can’t do this one your own!”.
Joe
First, my United States of Innumeracy post in which I discussed a viral email making the rounds which claimed the bailout was equal to $250K or so per person. Coincidently, a couple weeks later, Forbes publisher, Rick Karlgaard, published “Math Boneheads, Pt II”, in which he expressed similar sentiment, only he was a bit more aggressive suggesting that the difference between the illiterate and innumerate is that “most innumerates have no idea they they are math boneheads.” I’m with you, Rich.
Next was my post “Send Fuld to Jail” in which I suggested that Sarbanes-Oxley be used to confiscate Fuld’s gains among others. Forbes, in the same issue I cite above, offers the same suggestion, only they felt that applying this regulation against former CEOs of failed banks was a longshot. Can’t say I didn’t try.
Joe
(Happy Turkey Day tomorrow.)
The talk of deflation, a general decrease in prices, is now becoming more common. Wasn’t it just a few months back that we were worrying about inflation and its cousin stagflation? But, I think the new fears are a bit unfounded. Inflation is not simply defined as ‘rising prices’ but as ‘too many dollars chasing too few goods.’ In the case of deflation, it’s just the opposite, too little demand, and not enough cash to buy the goods offered. I think the mini-bubble we saw in gas prices rippled through the economy and added cost to everything, from food, to any goods tat contained a transportation component in their cost. Now that oil has dropped to a somewhat more reasonable level, gas following, that cost is being pulled out of all goods, thus the short term drop in both the Producer Price Index (PPI) and Consumer Price Index (CPI). Deflation? I doubt it.
Joe
