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« Iraq Liberation Act: 10th anniversary celebration - 9 | Main | Iraq Liberation Act: 10th anniversary celebration - 10 »

October 09, 2008


Christopher Taylor

I wondered if you'd noticed that.


$3.19 now for a gallon of gas here in my neck of the woods of Pennsylvania.

I think your 9% unemployment rate prediction is pretty steep. I doubt it will get that bad but I concur that our economy will get worse before it gets better. Lower gas prices will certainly help.

Frank Warner

I think I just saw a $3.19 price, too. Yes, that should help.

I think the major problem for the economy right now, beyond the general panic and fear, is that businesses are not sure what the new rules are. With one bailout after another, and one new variation after another, there is no sense that, OK, here is the new reality, let's deal with it.

The Treasury and the Fed have to spell out what the new system is, and let it settle for a few months.


The USA doesn't need A racist socialist trying to run the country.

Pollster: Don’t believe the Dem hype

Jack Spectre

The polling data isn't always accurate, Hoss. Also, election day is still almost a month away.

Joe Libson

As my wife and I were saying to each other. No matter who gets elected president they get an absolute shit-sandwich of a situation to deal with.

At least if ObiTheWan gets elected we can stop hearing this "US is racist" nonsense.


$2.99 now for a gallon of gas here in my neck of the woods of Pennsylvania. It's dropping quickly.


$2.59 in Topeka, KS.

jj mollo

One reason that the price is dropping is that demand is dropping. One reason that demand is dropping is that the economy is slowing down. The bad economy might be, at least partially, a result of the dramatic increase in the price of oil. The decrease in the value of exurban housing might have been triggered by the oil shock. People suddenly recognized that they could no longer afford the long commutes. Equity in houses and vehicles came tumbling down. You can get a used Hummer pretty cheap these days. Now that the price of oil is coming down, equity in homes and vehicles should theoretically start rising again. Maybe so, but it doesn't usually work that way. When a bubble is pricked it doesn't grow back. Tulip bulbs will always be worth something, but never what they were getting during the Bubble.

The key to this situation in the long run is to take control over the price of oil. Not by price controls. Those are usually a disaster. What we need is a consistent policy to diversify energy sources and stimulate new industries. The future impact of oil prices could more sensibly be ameliorated by controlling the demand rather than the supply. You can't control demand unless you have reasonable substitutes.

Whenever we have a bubble, of any kind, the usual response is to encourage it. People know when these things are happening, they just lie to themselves. All sorts of government money and investment capital chases the bubble until it's beyond irrational exhuberence. The appropriate response by government, however, should be just the opposite. We should use the force of the bubble to inflate the market for substitutes and alternatives. That means IMO that we should be taxing bubbles and threatening to suppress them from the moment we see them forming. The cash would then flow around the bubble rather than into it. This kind of approach would require the presense of responsible politicians. Unfortunately, there's never been a bubble in responsibility.

Frank Warner

It is funny about economic bubbles. The phenomenon is so dazzling that, while half of us is pointing out its irrationality, the irrational half of us is saying, this could be the windfall that finally takes us all to the promised land.

And when I say "half of us," I mean "half of each of us."

jj mollo

Beware the razzle, shun the dazzle, eschew the talker smooth. Only love can mend a broken heart and truth your spirit soothe.


And the one that smelt it is the one that dealt it.

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