The problem is that govthink makes the assumption that people will still need to buy the products that are produced and will be willing to pay higher prices for them to counter the increased costs of production.
Let's take the airline industry for example. Right now, Southwest Airlines flights that I have been on have been full or nearly full. I'm sure that's not the case for all flights, but it serves to illustrate the example. If the price of oil goes from $100 per bbl to $200, the load factors will decrease, because businesses will not pay the additional costs for airline tickets as they do today; they will redefine what is meant by essential business travel. If planes continued to fly full or nearly full, only the increased cost of the fuel would need to be borne by those travelers. However, because of the cost of the tickets, the number of passengers will get reduced, and then those remaining who do fly will pay not only the increased fuel costs but also the per passenger cost increases resulting from the load factor reductions, a double-whammy. The number of individuals traveling for personal reasons will drop even more dramatically than it already has. These people will stay at home and avoid vacation and recreational travel. And the costs to the airline industry will go up even further. It becomes a death spiral.
The problem is that our productivity and standard of living are dependent on mobility and the ability to get around. Witness the reduction in home sales. A good part of that reduction comes from businesses not relocating their employees, because of reductions in market volume and its associated reduction in revenue.
And if I hear someone else talking about corporate greed, I'm liable to do something bad. Corporations are being forced to horde their cash resources because they can't sell their products at the volume they were selling before the obama disasters; it's not greed, it's a matter of survival.
Real Cynic: “The problem is that our productivity and standard of living are dependent on mobility and the ability to get around.”
True, and that’s dependent on cheap energy. A lot of people have no clue where the environmentalists want to take us. My father was an environmentalist. He wanted to clean trash and pollution out of our lakes and streams so they would be safe for fish and fowl. The greenies nowadays would say he was a piker. Most wouldn’t shed a tear if the human race was decimated.
These folks think Americans use too much energy, more than our “fair” share. They think we’re raping the environment, even though pollution is far, far less of a problem than what it was when I was a child. They despise the private automobile and think we should be forced to use public transportation for nature’s good. A lot of them are actually thrilled that oil is more expensive, as it forces people to consume less. They actually want increased taxes on energy for the same reason—to reduce consumption.