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Friday, February 24, 2012

Griper Blade: Reducing the Price of Gas, the Republican Way

Say what you like about George W. Bush, but his policies -- with the aid of Republicans and feckless Democrats who followed him blindly -- managed to bring gas prices down to $1.81 a gallon. We could do it again if you want. Here's how: you just blow a great big smoking hole in the global economy. It's that simple. It probably wouldn't surprise you to learn that I don't recommend going this route.

The price of gas, like all things retail, is the product of supply and demand. When demand is high -- i.e., a good or recovering economy -- the price is high. But when demand is low -- i.e., a Bush-style global economic meltdown -- the price of gas is low. It's not just consumers at the pump that drive the demand for oil, but consumers everywhere in the retail chain. Those Fritos don't climb up on the shelf all on their own, you know. When you start buying more of pretty much anything, you're increasing demand for oil. Goods travel.

It's hard to argue that rising gas prices are a good thing, but they are a good sign. And that's a difficult argument to make. Which probably explains why President Obama didn't make it when he was speaking about energy yesterday.

But the truth is that, even if we could somehow sustain a static, unchanging economy where the needle on the demand meter never so much as quivered, the price of gas would never go down. Ever. It would only rise. Again, it's supply and demand. Supply is shrinking. If you doubt that, consider the XL pipeline and the Canadian tar sands. We're now so desperate for oil that we'll literally squeeze it out of rocks. This isn't the sort of thing you do when there's plenty of the stuff lying around. The Oil Age is winding down, whether we want it to or not...[CLICK TO READ FULL POST]

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