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High Gas Prices Cannot Keep the Economy Down

red states rule

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As Americans jammed the highways and airports to enjoy their holiday, I thought how PO'd the libs must be.

With gas near $3 a gallon, Americans are enjoying the holiday and do not seemed a bit worse for wear with high energy prices

The US economy is so strong, high oil prices cannot stop it from growing.

Of course, libs were running around saying how the high gas prices would keep people home this 4th of July.

Wrong! Libs keep chanting their doom and gloom message and it keeps falling on deaf ears

I found this article which proves my point (in addition to the crowded highways)


http://www.csmonitor.com/2006/0515/p09s02-coop.html

Why $3 gas won't slow the US economy
We're in the middle of a boom spurred by lower taxes, big productivity, and free-market resiliency.
By Lawrence Kudlow

NEW YORK – As all the pollsters are telling us, there's an inverse relationship between rising gasoline prices and President Bush's falling approval ratings - most especially his approval rating on the economy. Of course, these polls describe a certain national angst over energy that harkens back to the dreadful 1970s. But there's a better reality out there: Namely, the upturn in gas prices simply is not stopping the economy the way it did three decades ago.
Today's economy may be the greatest story never told. It's an American boom, spurred by lower tax rates, huge profits, big productivity, plentiful jobs, and an ongoing free-market capitalist resiliency. It's also a global boom, marked by a spread of free- market capitalism like we've never seen before.
The political resolution to the disconnect between fear (high energy prices) and reality (a great economy) remains to be seen. But as the data keep rolling in, the economy continues to surpass not only the pessimism of its critics, but even the optimism of its supporters.

Recent data on production, retail sales, and employment are stronger than expected. The latest durable-goods report shows huge gains in orders for big-ticket items such as airplanes, transportation, metals, machinery, and computers - even cars and parts. These orders suggest that the economic boom will continue as far as the eye can see. And there's more: The backlog of unfilled orders, the best leading indicator of business activity, gained 12 percent at an annual rate in the first quarter. With this kind of real-world corporate activity in the pipeline, highly profitable businesses will be doing a lot of hiring in the months ahead in order to expand plant and equipment capacity.

As for the energy angst, President Bush recently outlined a sensible pro-market mid-course policy correction. He is suspending the ethanol tax mandate that forced gasoline distributors to switch to the corn-based fuel from the MTBE oxygenate. This ethanol regulation was one of the great energy-policy bungles of all time. Neither refiners nor transporters were anywhere near ready to implement this misguided mandate, which drove up pump prices by 50 cents in just a few weeks.

But with Mr. Bush's recent action, futures prices for unleaded gasoline are already retreating, and it wouldn't surprise me if the whole ethanol price hike effect was reversed. Crude oil is also declining in the aftermath of the Bush announcements, which included the decision to stop the crude-oil fill rate for the Strategic Petroleum Reserve. At the margin, government deregulation is giving markets more latitude - always a good thing.

The big point here is that free markets work. Rising prices from the global boom will lead to more conservation, less consumption, and more production, but only so long as government stays out of the way. Instead of blaming ExxonMobil for high gas prices, irate motorists and voters should blame Congress for mandating, regulating, and taxing against energy.

Indeed, bashing big oil won't create a drop of new energy. Actually, over the past 15 years, ExxonMobil's total investment has exceeded the company's earnings, according to Washington analyst James K. Glassman. Meanwhile, all the evidence from time immemorial shows that gas prices are set by market forces, not manipulation at the production level. So-called price gouging is nothing but a political red herring. Windfall profits taxes and special tax subsidies will only diminish energy investment, not increase it.

Energy is best left in the hands of the free market. With this in mind, Congress should allow environmentally friendly drilling in the Arctic National Wildlife Refuge and the Outer Continental Shelf, the building of more LNG terminals, and the creation of nuclear power facilities. Deregulation works: Just look at the boom in Canadian oil sands.

Bush can also build on his new energy policy with more pro-growth measures that will extend the economic boom: Get rid of the ethanol tax for good. Repeal the tariff on imported ethanol from Brazil and elsewhere. Repeal the multiple taxation of dividends and cap gains. And abolish the death tax while you're at it.

Exercise the budget veto pen to stop bridges and railroads to nowhere. Go back to the Reagan economic model of a strong dollar to hold down inflation and lower-tax-rate incentives to promote economic growth. That model will work as well today as it did 25 years ago, when it launched the long prosperity boom we continue to enjoy.

Most of all, let free markets work. This is the new worldwide message of freedom, prosperity, and optimism.

• Lawrence Kudlow is CEO of Kudlow & Co., an economic and investment research firm. ©2006 Creators Syndicate Inc.
 

Mr.Conley

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Yea, I pretty much agree with everything he said except maybe the MBTE suspension. Apparently MBTE can cause cancer. Then again, I believe that about 20-30 states have already banned MBTE in gasoline due to the health risk. I guess I could see pushing the requirement back a few years until ethanol's price falls and producers are ready, but I don't think it was nessicary to completely trash the idea. Just a quibble though
 

1549

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$75 a barrel: a new record.
 

Mr.Conley

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I think that we're going to hit $80 in the next few months.
 

1549

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Mr.Conley said:
I think that we're going to hit $80 in the next few months.

I can't wait. When it happens I'll be sure to post that America does not care, liberals are suicidal, and George Bush is likely some sort of prophet.
 

CharlestonChad

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Without taxes on gasoline, the roads won't be maintained and/or paved. A company would come along and pave the roads, setting up toll boths everywhere.
 
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red states rule

red states rule

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CharlestonChad said:
Without taxes on gasoline, the roads won't be maintained and/or paved. A company would come along and pave the roads, setting up toll boths everywhere.


Since government makes 5 times the money oil companies make on a gallon of gas, the roads should be paved in 24K gold

To libs, the profit of the oil companies are obsene. Why aren't libs outraged over the tax gouging the govenment is involved in?
 

CharlestonChad

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red states rule said:
Since government makes 5 times the money oil companies make on a gallon of gas, the roads should be paved in 24K gold

To libs, the profit of the oil companies are obsene. Why aren't libs outraged over the tax gouging the govenment is involved in?

Dude, everything isn't black and white. Every issue does not have to be divided into Liberals on one side and Conservatives on the other. Even right wing talk radio shunned oil companies for their outragous profits. Both parties agree that the oil companies are out of control (well actually the contrary, literally speaking) with the profits they are making.

It cost millions of dollars to just repave an existing mile of 4 lane highway. Just imagine how much it cost to actually build a new highway, add lanes, build bridges, ect...
 
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red states rule

red states rule

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CharlestonChad said:
Dude, everything isn't black and white. Every issue does not have to be divided into Liberals on one side and Conservatives on the other. Even right wing talk radio shunned oil companies for their outragous profits. Both parties agree that the oil companies are out of control (well actually the contrary, literally speaking) with the profits they are making.

It cost millions of dollars to just repave an existing mile of 4 lane highway. Just imagine how much it cost to actually build a new highway, add lanes, build bridges, ect...


The amount of money the government is taking in on gas taxes, royalties payments, off shore leases, and other payments - the roads should be paved in gold. In the last 20 years the government has taken in over $2.2 trillion dollars

On top of that you have tolls being charged on roads that were to paid with the gas taxes.

Now of course, you have libs wanting to charge people for every mile they drive.

It is black and white. You have libs wanting to pick the pockets of the producers even more then they are now. Of course, you want us to shut up and pay the tax.
 

KarlMarx

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red states rule said:
The amount of money the government is taking in on gas taxes, royalties payments, off shore leases, and other payments - the roads should be paved in gold. In the last 20 years the government has taken in over $2.2 trillion dollars

On top of that you have tolls being charged on roads that were to paid with the gas taxes.

Now of course, you have libs wanting to charge people for every mile they drive.

It is black and white. You have libs wanting to pick the pockets of the producers even more then they are now. Of course, you want us to shut up and pay the tax.
Let's not forget that, because oil company profits are up, they wanted to introduce a windfall profits tax.
 
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red states rule

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KarlMarx said:
Let's not forget that, because oil company profits are up, they wanted to introduce a windfall profits tax.


Good point!

Why do libs hate facts about their insatiable appetite for higher taxes?
 
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Any comments on BP's sudden concern over the condition of thier pipelines and the subsequent shut down of their "Alaskan farm"?

Ever since Katrina, prices have gone up... leveled off... gone up... leveled off. When is the southern turn coming? Ever? Doubtful. What can the working class do?

Ironically, the one complaining about gas prices the most are the ones that "can afford it", with thier luxury vehicles and whatnot. They complain and just keep paying while us regular folk have to resort to riding bicycles just to get to work.

:dev3:
 
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Any comments on BP's sudden concern over the condition of thier pipelines and the subsequent shut down of their "Alaskan farm"?

Ever since Katrina, prices have gone up... leveled off... gone up... leveled off. When is the southern turn coming? Ever? Doubtful. What can the working class do?

Ironically, the one complaining about gas prices the most are the ones that "can afford it", with thier luxury vehicles and whatnot. They complain and just keep paying while us regular folk have to resort to riding bicycles just to get to work.

:dev3:

Is there ever a good time to shut down facilities to perform maintance? If we would start drilling for all the oil we have within the US, we would not have this problem.

More drilling and more refineries is the answer to lowering gas prices
 

RyzinEnagy

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Is there ever a good time to shut down facilities to perform maintance? If we would start drilling for all the oil we have within the US, we would not have this problem.

More drilling and more refineries is the answer to lowering gas prices

Do you think relations between the U.S. and Saudi Arabia will sour if we reduce our oil business with them and the rest of OPEC, and since we have a massive trade deficit with them things could take a turn for the worst. I would love to have all of our oil coming from our own reserves and agree with you that we can lower gas prices if we drill it ourselves, and correct me if I'm wrong, but I don't think that is exactly feasible at this point.
 
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Do you think relations between the U.S. and Saudi Arabia will sour if we reduce our oil business with them and the rest of OPEC, and since we have a massive trade deficit with them things could take a turn for the worst. I would love to have all of our oil coming from our own reserves and agree with you that we can lower gas prices if we drill it ourselves, and correct me if I'm wrong, but I don't think that is exactly feasible at this point.

Who cares if OPEC gets mad at us?

If we increase the supply of oil and increase the refining capacity, (we have to both) the price of gas would drop
 

RyzinEnagy

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Who cares if OPEC gets mad at us?

If we increase the supply of oil and increase the refining capacity, (we have to both) the price of gas would drop

Do you discount the possibility of new terrorist factions forming by angry citizens in these countries by how their economies became worse because of us (I don't mean regular people who all of a sudden become terrorists, but people who already harbored a deep hatred for us but up to this point just voiced their opinions at protests or kept it at home), or radical governments rising in these countries because of newfound hatred of us, and maybe they might interpret that we lumped the country as a whole with the terrorists because we are not interested in business with them anymore.
 
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Do you discount the possibility of new terrorist factions forming by angry citizens in these countries by how their economies became worse because of us (I don't mean regular people who all of a sudden become terrorists, but people who already harbored a deep hatred for us but up to this point just voiced their opinions at protests or kept it at home), or radical governments rising in these countries because of newfound hatred of us, and maybe they might interpret that we lumped the country as a whole with the terrorists because we are not interested in business with them anymore.

Like they can hate us more then they do now? With the money these countries take in fromt he sale of oil, the strets hould be paved in 24K gold and every person should live in a mansion.

It is not the US's problem if the corrupt government keeps them in poverty. No amount of talking or making nice will change thier feeling towards the US
 

RyzinEnagy

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Like they can hate us more then they do now? With the money these countries take in fromt he sale of oil, the strets hould be paved in 24K gold and every person should live in a mansion.

It is not the US's problem if the corrupt government keeps them in poverty. No amount of talking or making nice will change thier feeling towards the US

True, but propaganda is a powerful tool. But you can go to these countries and find out that not every single person hates us. It's easy to think that. The region as a whole hates us, but yes the hatred can actually increase. I don't support this at all but I feel that we are tethered to the OPEC countries because of what we owe them.

I am trying to enter the airline pilot profession and I know several people (Americans) who are flying for Saudi airlines on a contract and feel completely safe there. I think that is an indication that for now that even though it's dangerous to be in these countries, it's a minority of radicals for now who would actually take action to hurt us and that security for these Americans is good enough to keep them safe. Imagine if the hatred starts from the very top at the government and siphons down to the security guards and the rest of the working class. I think this country would be a lot more unsafe if we actually piss off people at the top of the nations in OPEC. As you said these governments are rolling in money, and if they should decide to fund terrorist organizations without our knowledge, look out...
 
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True, but propaganda is a powerful tool. But you can go to these countries and find out that not every single person hates us. It's easy to think that. The region as a whole hates us, but yes the hatred can actually increase. I don't support this at all but I feel that we are tethered to the OPEC countries because of what we owe them.

I am trying to enter the airline pilot profession and I know several people (Americans) who are flying for Saudi airlines on a contract and feel completely safe there. I think that is an indication that for now that even though it's dangerous to be in these countries, it's a minority of radicals for now who would actually take action to hurt us and that security for these Americans is good enough to keep them safe. Imagine if the hatred starts from the very top at the government and siphons down to the security guards and the rest of the working class. I think this country would be a lot more unsafe if we actually piss off people at the top of the nations in OPEC. As you said these governments are rolling in money, and if they should decide to fund terrorist organizations without our knowledge, look out...

They are already pissed off at us. By drilling for our own oil we cut off the money to fund terrorists.
 

RyzinEnagy

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They are already pissed off at us. By drilling for our own oil we cut off the money to fund terrorists.

Believe me, I really wish it turned out that way and everything that I said turns out to be false. Drilling our own oil would really help this economy a lot as well as help the wallets of motorists. And it's good to see that Americans have not stopped travelling because of the gas prices. I would love to see prices go down so I can better afford to fly Cessna's and check out the beautiful country we live in.
 

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