Bein Stein's Right

Excellent article on oil prices by economist, writer, and Hollywood mega-star* Ben Stein, here.

Next, if we want to blame anyone -- and frankly I'm not sure there's anyone to blame -- maybe we should blame ourselves for the oil pinch. I offer my humble self as an example. The first new car I ever bought was a 1972 Subaru FF-1. No air conditioning, no cruise control, no FM radio, no power windows. Four on the floor, four tiny little cylinders, and no power at all.

It got about 40 miles to the gallon. [...] In other words, I was sensible.

Now, I drive a Caddy. It's a great car, and I feel like a prince in it. But it gets very poor mileage indeed with its mighty V-8 engine with supercharger. True, I hardly ever drive it, so on a daily basis I hardly buy any gas at all (I like to make that point over and over again to soothe my conscience).

Ben Stien drives a STS-V or an XLR-V. Sweet!

But I'm an American. I like my big cars, and they burn a lot of gasoline. Likewise, I like my air conditioning and my pool heated. So, I play my part in using a ridiculous amount of hydrocarbons. I could spend less by having a smaller car and sweating in the summer. But I don't. I just pay more and suffer financially.

This is not just some rich guy talking. How many Dodge Ram 4x4's with lift kits do you see dieseling around the the suburbs with spotless knobby tires? Blue collar guys love hyrdocarbons, too.

Regarding the commodities run-up:

As for me, I question if the commodities boom can go on forever. ...

If you think this one will, here's a hint. When people say, "Hey, this nonstop boom has never happened before," and someone responds, "This time it's different," hold onto your wallets. "This time it's different" is one of the most frightening phrases in economics. It's entirely possible that the next move for oil is a long step down. Then won't we be sorry for shooting the messengers?

"This time is different" may come true when we hit "peak oil"--that is, annual global oil production starts to decline because supplies are limited. We are not at peak oil yet, and no one knows when it will happen, because there are may areas that are off limits to exploration which could be opened up, once we shove the greenies out of the way, scare some whales, run over some caribou, and club us a few cute baby seals.

*Ben Stein is a minor "celebrity", but his brain could bench press the entire cast of M:I:3.