Oil
- Posted by ryan on May 13th, 2009 filed in Economics
I will say that I think the price of oil is probably the biggest constraint on growth that the country faces. The recent rise in the price back to near $60 per barrel is very ominous. Expensive oil will constrain personal consumption, which is one obvious way that recovery would begin. It will constrain savings, which will slow structual shifts and draw out the process of repairing household balance sheets. It may also lead to new pain for both the automobile and housing sectors.
There’s a limit to what can be done in the short term to reduce exposure to high oil prices, but we’re not really trying to take even those small steps.
May 13th, 2009 at 11:02 pm
On the bright side, it will help plug the holes in Louisiana’s budget (they projected $70/bbl), leaving the legislators free to concern themselves with rolling back women’s rights and banning human-animal hybrids. Oh, and barricading themselves in the Capitol to avoid voting a tobacco tax out of committee. God help the Gret Stet when the Legislature’s in session.