TBP in Barron’s
Lovely comments on our humble blog in this week’s Up and Down Wall Street column in Barron’s:
“THE CERTAIN IMPACT ON energy prices and the oil industry of what euphemistically is being called the “spill” needs no further description for regular readers of this space. And for those who aren’t, it ain’t good.
Yet for all the justifiable disgust and outrage from the endless images from the underwater pictures showing BP’s crude spewing from its crippled rig to the images of oil-soaked marine birds, Americans show little inclination to renounce their energy gluttony. A graphic from the U.K. Guardian passed along by Barry Ritholtz on his terrific blog, The Big Picture (www.ritholtz. com/blog), shows that the U.S. consumes 25% of global oil output while having less than 5% of the world’s population. This helps explain the Brits’ feeling that we Yanks are being less than honest with ourselves in our pique at BP. “They raise a valid point,” he adds.
What Americans are loath to admit is that there are limits to our consumption. Similarly, the U.S. has absorbed a huge chunk of the world’s savings to satisfy our massive budget deficit. The latest Treasury International Capital data show private long-term inflows totaled an “astounding” $250 billion in the first four months of the year, says William O’Donnell of RBS Securities.
But the European debt crisis probably has staved off that day of reckoning for the U.S. government. Global investors have flocked to dollar assets as it’s become painfully apparent that the euro isn’t ready to assume the role as a true alternative to the greenback.”
It is always gratifying anytime a column of the importance of Up and Down Wall Street recognizes the work . . .
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Source:
Hogan’s Antihero
RANDALL W. FORSYTH
Barron’s June 19, 2010
http://online.barrons.com/article/SB50001424052970203296004575306871666352824.html
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June 20th, 2010 at 6:33 am
The gist of the ratio 5% of pop. vs. 25% of consumption is that we are simply profligate with energy. I wonder how we would stack up if standard of living (energy consuming lights, appliances, vehicles) and the size of the country and dispersed population were considered. Cheap energy in the ’50s and later permitted urban sprawl and development of communities satellite to more major cities. Available land aided this. Our country’s unsual situation in these respects led to the consumption we have now. So, how much is due to 2 cars per person and every imaginable appliance and our admittedly wasteful usage patterns and how much is due to the nature of the country we occupy? If Russia had the same standard of living across its entire land mass I’d wager that their consumption would be higher than ours.
June 20th, 2010 at 7:59 am
Our energy policy (as in no policy) has all the ear marks of an addiction. SUVs and McMansions are the true American symbols of self destructive addictive behavior.
Our only policy is to use the very valuable and limited resource as quickly as possible. And when we started to run out (US production peaked in the 1970s as was predicted in the 1950s) we borrowed money to pay dictators that hated us to supply our addiction. Wars, debt, death, pollution are the end result. All very predictable.
-Pretty much our de facto policy has been drill baby drill and when we couldn’t find it by drilling, we borrowed money from dictators that hated us to feed our addiction.
-To paraphrase our former political leader (Cheney): Our standard of living is non-negotiable. Polluting the environment to the point where eventually our lives will be unsustainable is of no concern. Got to feed that addiction NOW baby.
-Hogs when given seemingly unlimited food will eat themselves to death, which pretty much mimics our energy policy. Use it up as quickly as possible. Get it while you can. We are doing exactly the same thing by drilling in areas that are fraught with danger, and results are very predictable.
-We in the US were given an opportunity with vast resources to be intelligently self sufficient in energy for many decades. Intelligently is the key word here.
-Some day our children and their children’s children will say, what you burned all of that oil to have SUVs bought with debt you couldn’t afford to pay back while at the same time you polluted the environment. The devil himself couldn’t have done a better job of destruction.
June 20th, 2010 at 12:46 pm
farmera1,
You could not have said it more succinctly. Kudos to you!
June 20th, 2010 at 2:10 pm
excerpt:
————–
The Big Picture (www.ritholtz. com/blog), shows that the U.S. consumes 25% of global oil output while having less than 5% of the world’s population. This helps explain the Brits’ feeling that we Yanks are being less than honest with ourselves in our pique at BP. “They raise a valid point,” he adds.
reply:
————
Screw the brits. How much oil we use doesn’t matter. How much of their oil they use to pollute our shores and ruin our livelihoods does matter.What a load of namby pampy crapola. Just because we buy a lot of their products doesn’t mean they can shit in our yard whenever they want.
June 20th, 2010 at 2:11 pm
The Gulf situation is grim, and BP deserves what it’s got coming and would be treated little different if it were Exxon.
But it’s worth noting that the US outrage is somewhat attenuated when US companies spill a similar amount of oil annually in the Niger Delta, or when Union Carbide kills 20,000 people in Bhopal.
In the history of oil spills, it’s a big one, but they happen with a certain regularity. Just not in our backyard. (see for instance http://webecoist.com/2010/05/04/sick-slicks-counting-down-the-13-worst-oil-spills/ )
June 20th, 2010 at 2:13 pm
Probably similar stats regarding food consumption, americans (and also canadians) consume unnecessary amounts of food (obesity epidemic), unhealthy amounts of meat, particularly red meat.
The consumption of sugar/glucose/fructose is also staggering.
This causes great pressures on global agriculture, which is also ”disturbed” by the corn for ethanol cultures around the world. The main buyer of ethanol is the U.S..
June 20th, 2010 at 2:34 pm
I’m as much against the SUV mindset as anyone. It pains me to see a single person driving around in a 5000lb (or more) tank.
But what is the solution? Have the government make SUV’s illegal or put a huge tax on them? Tax gas to the point that only the rich could afford an SUV?
Or maybe the government could buy a new 40+mpg car for everyone? And energy efficient appliances also!
Notice these potential “solutions” all involve the government doing more social engineering and forcing a “solution” on people, which is a non sequitur in a time when people are complaining that governments fingers are all ready to deep in the pie of everyday life. And of course, the government doesn’t have any spare money to buy people cars or appliances anyway.
Many blogs and commenter’s are great at piling on and ranting about problems, but I see few postings that offer realistic, politically viable solutions. Maybe because there really aren’t any….
June 20th, 2010 at 2:34 pm
“the U.S. consumes 25% of global oil output while having less than 5% of the world’s population”.
Yes, well U.S. oil consumption is not so unreasonable given the size of U.S. GDP relative to aggregate GDP of all industrialized nations.
Nevertheless, a hefty tax on gasoline would make a lot of sense, provided that we could trust the politicians to provide offsetting tax reductions elsewhere. (Which, of course, we can’t).
June 20th, 2010 at 2:44 pm
Kudos Barry…and a great observation. It almost does not matter where you were born or where you grew up, because once you become an American, you consume resources like there is no tomorrow, even while knowing what you are doing. I am beyond aware of that, having grown up in Europe for the first 17 years of my life. Life was great; we lived in smaller apartments; drove smaller cars; used tons less electricity, traveled a lot and then I came to the US for college back in 1984….now I live in a 3300 sq. ft. house on 3/4 acre with a heated in-ground pool; we drive gas sucking V6 cars (to boot I drive @ 35K miles per year); crank the A/C all summer long and keep the triplets well fed…it’s the American Dream, right?
Once you become an American, even if you weren’t one to begin with, the society absorbs you into the melting pot and whether we like it or not, we do notice what the Joneses do and everyone else around us and learn to accept many things and perhaps even take them for granted…like driving all over the place, consuming (and then some), cranking the A/C, having the TV on while you are on the computer,etc…
June 20th, 2010 at 2:47 pm
Like DL says….Gas Tax? It was evident that Americans drastically changed their behavior and even what they drive at $4 per gallon….we now drive V6s, but used to drive V8s until gas hit $4 per gallon. So it affected us enough to switch to V6 engines and increase our family fuel economy by 45%…
June 20th, 2010 at 3:30 pm
Let’s use the same creative logic when discussing Chinese made toys with lead paint exported to the US. Parents of toy gluttonous US toddlers should not complain about the Chinese manufacturers when they discover their kids glow in the dark.
June 20th, 2010 at 4:35 pm
Gas Tax!
Gradually add $0.25 per gallon tax. EACH year… for the next 10 years. So in 4 years… its $1/gallon tax. In 8 years… $2/gallon. I believe the US uses about 150B gallons per year. So in 10 years this tax would generate $300B+ per year.
Use that to cut payroll and corporate taxes.
This is NOT hard.
The innovation this would spur in electric vechicles, nat gas vechicles, and fuel economy would be amazing.
Tax ALL similar fuels — especially jet fuel (currently tax emempt) and probably even coal.
June 20th, 2010 at 4:49 pm
well have we found a problem that the ‘market’ can’t solve. after all, the customer won’t buy vehicles that get better gas mileage unless the cost of gas is high. so a gas tax would make sense but maybe instead of just setting and forgetting it or gradually increasing it, maybe set it so that has a ‘goal price’ per gallon of gas, say $3, I.E. the tax makes the price of gas be $3 at a minimum. we could raise that ever 5 years so that the goal price is increased by .25 or some thing like that.
and we could then use that money to reduce payroll taxes. or fix SSN. but first it has to fix the problem we have with roads.
not so sure about fixing corporate taxes. hard to take that serious when so many corporation pay 0 corporate taxes.
and jet fuel is taxed, its not exempt (according to folks i asked who work for the airlines anyway).
June 20th, 2010 at 9:00 pm
An energy tax always did make sense from an economic standpoint.
It could be designed to put a floor price on energy that everyone including those developing alternatives could count on.. In the past if energy prices got high, I’m convinced our friends the Saudis turned on the spigots to lower oil prices and drive alternatives out of business.
As far as there are no solutions, maybe so. We have wasted decades defending our wanton use of energy.
So we can continue to pay the foreign dictators with money borrowed from our kids, or we can do something about it.
But ideology is much easier to follow to the grave and by the way taking our kids with us, than do anything that makes sense.
June 21st, 2010 at 1:35 am
Has anyone got some links showing that the Brits specifically mentioned being pissed about our oil consumption. Please don’t link me to the standard “I hate the world so I hug trees” diatribes. I’m looking for things and critiques a little more serious. Personally I have not seen any connected to the BP push back. But you never know. Until I see some I’m thinking Urban Legend now being spread by even Barron’s et al.
June 21st, 2010 at 7:51 pm
Increasing the gas tax is very punitive to those with low incomes. You could tax them right out of their jobs. Fact is, we’ve constructed our cities such that cars (and gas to fuel them) are not optional. That said, I’m all for raising the gas tax quite high. Use a good chunk of the tax revenues to build out mass transit systems.