Yeah – I know I am not a political blogger – a large percentage of my blog posts include source code – but what the heck. I like politics and someday dream of being in politics – but it is a pretty idle dream. But just like Karaoke and singing – I will indulge myself in a political post just for fun.
I think that we are mistaken as the the root cause of the current economic crisis. We are collectively blaming the sub-prime market and all that – which of course is the proximal cause – however it is not the root cause. The root cause is “Oil” – whatever that means – the producers, suppliers, the speculators, etc – the whole market – except of course for the citizens that work at the local gas stations – they are just decent working people like the rest of us.
Over the past few years “Oil” decided that it wanted a bigger percentage of our income to go into their coffers. So for the past three years – we have this pattern where oil prices are driven up in the summer and then fall back down in the fall – but they never fall back to the place that they started from in the spring. So during the summer – Oil makes a lot more profit – and in the rest of the year – the still make more profit. Year on year -their profit was going up.
Since people naturally think in the short term – they mostly worry about how much higher or lower this weeks tank of gas cost versus last week’s tank costs. People of course have no choice – but since it seemed like the “really high” prices were always “temporary” – we could grit our teeth and throw a little more on the credit card for gas over the summer.
But quietly, year on year Oil had quietly doubled how much it takes from each of us in our cars and in our products that we purchase and use. It seemed as though the Oil companies could siphon money out of the US economy at will and as long as they kept us guessing – no one noticed it.
However, sooner or later something had to give – as money was sucked out of the economy – things got tighter – and in the past few months – the weakest link finally broke – the credit industry – was the weakest part of the economy – that ballon popped – and down we tumble like Humpty-Dumpty.
Now of course Oil is a little sheepish regarding destroying the US economy so they are dropping Oil prices really fast – kind of a big public apology. Kind of like a neighborhood kid saying “I did not mean it” after throwing a baseball through the front window of your house.
Sadly, the ten dollars I saved on gas last week does not make up for the ten thousand dollars we all lose in the market each week – so while I like to see Oil admitting responsibility for the crisis and trying to put Humpty-Dumpty back together again so we can get back to the old ways where they were siphoning cash out of the economy at will, it is just not going to happen.
My guess is that Oil will quickly tire of trying to help the economy and soon realize that they can suck money out of a bad economy just as well as they could suck money out of a good economy – and gas prices will get back to the $4-$5 range quickly. Once you get used to greedy ways – it is hard to get un-greedy.
Ah well – the good news is that my Honda 450 gets 45 miles per gallon cost me $1300 to buy and has really cheap insurance. I bought it to save money on gas with the idea that in less than a year I could pay for the bike in gas savings – with low gas prices, my payback is longer – ah well.
Here is a bit of good news though – in Michigan motorcycles are best ridden in the summer – when Oil prices go up. And then when I have to drive my 27 mile per gallon Buick LeSabre in the winter – Gas prices are lower. All in all – it seems like me and Oil have a pretty reasonable arrangement. Next year – with $6 gas – I will have my motorcycle paid off by gas savings by early July 2009.