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To: thackney
There will be some offsetting gains. But I think history shows the total economy has never jumped before in this situation. The reality is there is more going on than just gasoline prices. The drop in price is partially driven by slowing economies that have job impacts at the same time. Copper is also at a 5 year low. Lumber prices are down. It isn’t just oil.

I don't know if there's ever been a credible economic study that filtered out all other factors. You also have to ask, compared to what?

There's no doubt that $140 oil was a drag on the economy, especially considering how much of that oil was imported. The domestic production boom has been doubly stimulative in that it has decreased the world price of oil and kept more $$$ at home. Win-win.

Some estimates put the effect on the economy at 2% additional GDP growth from jobs alone. As far as the favorable effect of lower costs and lower balance of payments, who knows?

One of the shortcomings of the "Science of Economics" is that it just speaks to that which can be reasonably measured. If economics can't (or, in some cases, won't) measure activity, we're left to our theoretical knowledge to make our best judgment. The quality of our theoretical framework will determine the quality of the judgment.

The effects upon the industry are comparatively easier to measure. Layoffs can be tracked. Payments to vendors and other components can be measured.

It's harder to measure the effect lower prices has on small business not directly affected. Lower business at restaurants across from facilities is probably offset by higher business at other restaurants.

Manufacturing has become much more competitive. Small businesses such as mine are making buying decisions for the next year based upon projected fuel costs.

Negative effects can be easily measured because they are localized. Positive effects are much more diffused and harder to recognize and measure.

It doesn't mean they don't exist, or that they are not substantial. There's no doubt it's incredibly disruptive.

228 posted on 01/16/2015 11:43:31 AM PST by gogeo (If you are Tea Party, the eGOP does not want you.)
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To: gogeo
I don't know if there's ever been a credible economic study that filtered out all other factors.

The point is, all other factors are part of the equation.

Oil doesn't move without other factors. And slowing global demand for oil is a symptom of those factors.

My point, very significant drops in oil prices and the associated gasoline prices, have resulted in a booming economy in the past. I don't see it happening today. It is because gasoline prices are not the only thing going on.

Also at this time, the oil industry has become a larger percentage, of our domestic economy. Combine a lower percentage of the population actually earning paychecks, and a oil industry that has been hiring like crazy for a few years, the impact is likely to be greater than before. Lots of associated businesses have been doing well due to selling, pumps, pipe, switchgear, cables, housing, heavy equipment, etc that are going to see a large drop in sales.

229 posted on 01/17/2015 6:56:22 AM PST by thackney (life is fragile, handle with prayer)
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