Great comment on an Arnold Kling post on the dangers of looking back to see who successfully predicted this mess:
People talking about a bubble is not the same thing as “knowing” there is a bubble…. Just as with the stories about pre-9/11 warnings of a terrorist attack, there are always those issuing warnings of one sort or another. The hard part is knowing when such warnings should be heeded and when they should be ignored.
I’d been curious about what this graph might look like. From EIA:
US Energy Mix
(Source: EIA – click through to see it bigger)
The interesting thing is that the U.S. energy mix largely stabilized, in terms of the share of total consumption from the main sources, in the late 1980s, and has been relatively unchanged since. Why is this? Did it essentially converge on a stable economic optimum? What role, if any, did government policies have on the shape of the our energy mix pie chart over time, both in arriving at the post-1980s equilibrium and before?
I don’t know whether this graph is telling us anything profound, but as we head into what is billed as a serious attempt to change our energy mix in dramatic ways, it’s worth thinking carefully about what federal policies, if any, have had the ability to shape our energy mix in the past.
The whole energy sector of the global economy may be in freefall, but in New Mexico we’re still digging up coal at a rate 5 percent above last year, and climbing. Nationwide, coal U.S. coal production year-to-date is up 3.5 percent over last year.
Cookie Smith was surprised to learn the fake lawn that earned her a home-beautification award violated a city ban on artificial grass.
Her neighbor was shocked when he complied with a state order to conserve water and was instead threatened with a $50 fine for letting his grass wither to a brittle brown.
FAO thinks we should not be sanguine about falling global food prices:
[T]he gradual return to equilibrium in food markets should not be taken to assume that the world’s food problems have been fixed, neither in the short-run nor with a view to the longer-term challenges. Cereal stocks still need to be replenished and lower prices will again divert more supply from food to fuel. With only 433million tonnes in opening stocks, the cereal stocks-to-use ratio in 2008/09 is at its second lowest in three decades. To bring stocks back to their pre-crisis levels will require 40percent of the production increase in 2008. Bioenergy has already absorbed 100million tonnes of cereals in 2007/08. Falling feedstock prices and new bio-ethanol production capacities arriving, could stimulate new demand and thus moderate an otherwise more drastic decline in prices.
From a bunch of guys in suits, likely not wearing Birkenstocks:
Members of the Journal’s CEO Council tasked with discussing priorities for the U.S. economy and finance offered several fairly uncontroversial suggestions to the incoming administration: implement a fiscal stimulus plan without worsening the long-term deficit, appoint a panel to address financial regulation, create an economic vision.
Tucked away in the proposal, in the category of long-term tax policy, was this political grenade: “consider raising taxes on gasoline.”
Thanks to John Whitehead for bringing this to my attention.
The leaves are falling away from the trees out back, and Sunday afternoon I spied a nuthatch hopping up and down the trunk of the neighbor’s elm, poking around for bugs. I think it was the red-breasted variety, though I didn’t get a good look. (Picture courtesy Cornell bird lab folks.)
You know when you’re a blog-writin’, energy wonkin’ wonk when you go bike riding with friends, and the whole thing turns into an energy policy riff. On the Internet. I’ll let Scot tell it:
I see at Bloomberg this morning that oil is $55 a barrel. $85 dollars down from $140, carry the one….that’s…a 61% decrease in about 135 days or so. Besides proving, once again, that I’d make a lousy commodities trader (and that most commodities trading analysts would make lousy commodities traders), what does it all mean?
I haven’t a clue, but doing a bit of bikeriding yesterday around the kitsch that is Mesa del Sol I saw big, shiny manufacturing centers looking pretty empty amid even emptier sunny Mesa. In particular, I came across this optimistic sign at the Advent Solar plant that read “Parking for Advent Solar Customers Only”. Sure it was Sunday, and almost everything in the whole planned development was empty, but given what my bikeriding friends told me about Advent, those parking space might not be filled for quite a while at $55 a barrel. European frenzy for solar energy or not.
Scot tells it about right, I think.
The Washington Post thinks you’re not paying enough for gas*:
In a perfect world, we’d like to see a gas tax that was the equivalent of oil at $100 per barrel. This would send a loud-and-clear signal to drivers to continue eschewing gas guzzlers for fuel sippers and mass transit. Automakers would get the message to speed up production of motor vehicles that meet or exceed the 35 miles per gallon by 2020 mandated by Congress last year. Instead of the money going to countries that have U.S. interests at heart in the same way a dealer cares about a junkie, the revenue would stay here — and it could all be returned to the American people in the form of tax rebates.
(via Greg Mankiw)
* $2.25 a gallon average in New Mexico today, down 3 cents from yesterday. Source: AAA