Thursday, June 26, 2008

Economics of Oil Prices

Demand for oil has increased, especially in the developing world, and as a result the price of oil has skyrocketed. An increase in the price of oil would seem to have clear benefits for oil producers, howeverthat is not so, according to the Economist. The increases in the price of oil act as an inflationary force on the global economy, raising the price of a wide range of goods and services-all goods that use oil in manufacturing or transportation, as well as all services. A similar thing happened in the ’70s which resulted in a long term decrease in the demand for oil, and there is a fear that the same thing could happen now.
Another effect of the 1970’s oil crisis was the sudden accumulation of large amounts of wealth in a small group of people, and the resulting tensions “helped create a fundamentalist backlash that produced, among other things, al-Qaeda.” So perhaps a war to keep the price of oil down is actually a war against al-Qaeda, however ineffectual it is likely to be.

Posted by George at 20:20:24 | Permalink | Comments (1) »

The price you pay?

Terrorism can perhaps be defined as the use of an unwarrented degree of force, or the use of force against civilians or those whose guilt has not been proven. How can you defeat that? The current administration seems to think that you cannot defeat terrorism without using their tactics, not just against known terrorists but also those that are suspected of being connected to terrorists. While we may be far stronger militarily, terrorists are constrained by neither public opinion nor for that matter a system of laws. They will always be willing to go farther than we can. Recently Pakistani Talibal killed 28 members of a government sponsered peace committee to send the message that “whoever sides with the government will meet the same fate.” I have to question whether or not it is even possible to win a war against an enemy like that without the use of questionable tactics, and if so what the casualty rate would be.

Posted by George at 19:28:08 | Permalink | No Comments »