Propaganda if I've Ever Seen It...

So, it's been a while since I've posted a political commentary. I guess that's probably because I've been focusing on other things lately, or it might be because there's not much else to say other than "our economy sucks" and "I really hope that Obama wins the election."

However (as is the case with most of my political commentaries), I happened to stumble across this article on CNNMoney.com today, and I feel compelled to express just how much I hate the Oil Industry. Basically this article says that the recent drop in oil prices, and the subsequent drop in gasoline prices is actually BAD for the economy. Why? Because the oil prices are dropping due to the fact that Americans are driving less (duh!), which means that Americans are spending less, which means that the economy is just getting worse.

"But falling oil prices also suggest that the recession the U.S. has so far avoided is well on its way, as consumers pull back from the spending spree that drove economic growth earlier this decade." First of all, can I just point out that we have NOT BEEN AVOIDING A RECESSION!! We are in a recession folks (no matter how much George W. wants to deny it). We're there. We were there a good long time ago. And guess what! CNN even reported that we were, in fact, in a recession way back in FEBRUARY (I remember because I predicted it and was subsequently vindicated).

Second of all--DUH! Of course people are spending less. Know why? Because people can't afford to spend! Discretionary income is no longer a luxury that most Americans have, seeing as food and energy prices are through the roof. I've taken a couple of economics classes in my day--and trust me, economics is certainly not my strongest subject--and while I didn't learn any of the intricacies, I did learn a couple of key things. First of all, there is an inverse relationship between price and demand. If price goes up, demand goes down, and if price goes down, demand goes up. Hence, gas/oil prices go up, the demand will inevitably drop. Surprise, surprise.

Secondly, of course, there is supply and demand. However! As oil futures trade openly on an international exchange, prices are subject to a little thing called PERCEIVED demand, aka SPECULATION. Speculation is what drives oil prices up. Today, oil dropped almost $4 per barrel because the weather forecast for the next a few days looks better than it did. Seriously? Listen, I understand that the oil supply WOULD most definitely be affected if a hurricane went blazing through the Gulf of Mexico. But let's be honest here folks. The cost of producing a barrel of oil has not increased significantly in the last 50 years. And production has, if anything, increased significantly.

The fact that oil has been over $120 per barrel for the last three months is due to a) the situation in the middle east, b) hurricane season and c) political and social tensions in other major oil producing parts of the world (Africa and Latin America) all making investors jumpy. And that's without even mentioning the fact that the oil companies are doing ZERO to help (they're making billions and billions of dollars, so why would they?), and our current government isn't going to do anything about it because the major players all have ties to the oil industry and are benefiting from the high prices.

Conflict of interest much? Maybe just a little. Or a lot...

So, here's what I think. I think that if oil prices continue to fall, gas prices will continue to fall, and people will start driving again because they can afford to do so. This, in turn, will probably drive the prices back up eventually. It is common knowledge that the market--any market--is cyclical. We just so happen to be on the down turn at the moment. It happens, people, and it sucks, but that's just how it works.

So, CNNMoney, stop printing your bull crap propaganda about how lower oil prices are actually bad for the economy. The economy is bad partly because of oil prices. It only makes sense that if prices drop, people are going to be able to afford to buy more, which, in turn, will increase consumer spending, which is always a good thing. I also think that falling oil prices will inspire consumer confidence (which, apparently, is also a good thing). Confidence leads to more spending, which leads to more confidence, which leads to more spending...etc. etc. so on and so forth. You get the point, right?

Right. So! This is what I think: I think that falling gas prices can only be good for our economy, and I think that I'm not the only person who thinks so. Most of the consumers I know are only concerned about how much it costs to fill up their tank or their pantry and/or refridgerator. It's only logical, I think, that a fall in oil prices can only be beneficial for the average consumer in ever way because the price of oil doesn't just affect pump prices. It affects PRICES in general. Oil drops, prices drop, spending increases.

It just makes sense.



(But of course, just because it makes sense doesn't automatically make it a sure thing.)