4 ms·

50 million? Given the USA's consumption, that doesn't feel like much. That aside, what's worrisome is that just days ago there was a climate agreement. Again.

50 million? Given the USA's consumption, that doesn't feel like much. That aside, what's worrisome is that just days ago there was a climate agreement. Again. But - once again - the economy comes first. When is this cycle going to stop?

yonaguska 5y ago
This administration has already stated that they aren't going to do much to lower gas prices, that this is just a growing period to encourage investment in green energy. Besides, Americans have been saving too much these past couple of years, what's a little bump in gas prices? All those people living at the poverty line should be just fine. The economy will recover. /s In all seriousness, I grew up in a household where the car was always on E, rising gas prices were sometimes the difference between eating or not eating. All goods will be more expensive, and this will have the biggest impact on the poor. Squeezing the lower and middle class now does not seem like the answer.
- dahfizz 5y ago
  > All goods will be more expensive This is something that is often overlooked. A lot of HN commenters like to be smug about how they don't use any gas, and all we need is a few more bike lanes. As if every single thing they have ever bought isn't trucked in to local stores. An increase in energy prices affects _everything_. Sharp increases in oil prices is a pretty reliable leading indicator of a recession[1]. [1] https://www.cnbc.com/2020/01/03/spiking-oil-prices-have-led-to-recessions-in-the-past-and-thats-why-the-stock-market-is-on-edge.html https://www.cnbc.com/2020/01/03/spiking-oil-prices-have-led-...
  - okl 5y ago
    I'd be careful to derive causality from overlaying charts with stuff. Especially, if the source is CNBC and the sample size (on their chart) is 3.
    - dahfizz 5y ago
      Is the federal reserve a good enough source for you[1]? Oil price shocks causing recessions is widely accepted by economists. [1] https://www.federalreserve.gov/pubs/ifdp/2014/1114/ifdp1114.pdf https://www.federalreserve.gov/pubs/ifdp/2014/1114/ifdp1114....
      - okl 5y ago
        "A good case can therefore be made that rather than studying the response to an average oil price shock, one ought to consider the response of U.S. real GDP to each type of oil demand and oil supply shock. This would require a different class of econometric models that explicitly incorporates quarterly U.S. real GDP growth into a structural model of the global oil market. Such an extended model, building on the work of Kilian and Murphy (2014) and Kilian, would help in understanding the role of the deeper determinants of the real price of oil in explaining recessions, while avoiding the generated regressor problem and loss of degrees of freedom associated with alternative econometric approaches. Developing such a framework is nontrivial, however, because many of the identifying assumptions currently in use in structural oil market models are specific to monthly data, and hence is left for future research." TL;DR: It's complicated. And I wouldn't call 80$ oil a "shock", especially in relation to current asset and commodity prices. Look at prices from 2011 to 2014 - was 100$ oil shocking then?
        dahfizz 5y ago
        > TL;DR: It's complicated. Economic modeling is complicated. The core fact that oil price shocks cause recessions is not. Your response is the reminiscent of a climate change denier saying "See! These two scientists disagree about how to model climate change, therefore it must not be real". > And I wouldn't call 80$ oil a "shock", especially in relation to current asset and commodity prices. Look at prices from 2011 to 2014 - was 100$ oil shocking then? Its not shocking as in "I'm shocked this is the price of oil". Its a price shock as in the price of a commodity rapidly changing. The absolute price doesn't matter as much as the percent change. There's no hard and fast rule about what constitutes a shock, but the price of crude oil has doubled since last November.
- mschuster91 5y ago
  > In all seriousness, I grew up in a household where the car was always on E, rising gas prices were sometimes the difference between eating or not eating. The solution for that is not to artificially subsidize gas consumption (which has its host of side effects on a geopolitical scale, from CO2 targets to dependencies on dictatorships), but to raise minimum wages and tax the rich to fund social security systems worth their name and actually usable public transport.
  - CapricornNoble 5y ago
    >>>tax the rich to fund social security systems worth their name and actually usable public transport If you not only taxed the rich but confiscated the entire net worth of the top 1%....it wouldn't even fund the Federal government for 10 years ($41.5T vs ~$4.5T).[1][2] That's barely two Presidential terms. What next? [1]https://www.cnbc.com/2021/06/23/how-much-wealth-top-1percent-of-americans-have.html https://www.cnbc.com/2021/06/23/how-much-wealth-top-1percent... [2]https://en.wikipedia.org/wiki/United_States_federal_budget https://en.wikipedia.org/wiki/United_States_federal_budget
    - mschuster91 5y ago
      Over the last fifty years, we see a steady decline in corporate taxes (from somewhat 48% in 1970 to 21% currently [1]), as well as an explosion of extreme wealth concentration - and complaints from actual billionaires that they're paying a lower tax rate than their secretary [2]. Correspondingly, we see a drop in investments in infrastructure [3]. How about you Americans go and reverse that trend? That won't need confiscation of the 1%'s wealth, but will massively improve the quality of life of the average American. Regarding social security systems, follow the European model - single payer healthcare, no for-profit middlemen in administration gobbling up money for "bullshit jobs" - and you won't even need to spend any more tax money. To the contrary, European healthcare systems spend half the amount per capita than the US [4], with worse outcomes (as measured in years of life expectancy, [5]). [1]: https://www.epi.org/publication/ib364-corporate-tax-rates-and-economic-growth/ https://www.epi.org/publication/ib364-corporate-tax-rates-an... [2]: https://money.cnn.com/2013/03/04/news/economy/buffett-secretary-taxes/index.html https://money.cnn.com/2013/03/04/news/economy/buffett-secret... [3]: https://fairmodel.econ.yale.edu/rayfair/pdf/2019d.PDF https://fairmodel.econ.yale.edu/rayfair/pdf/2019d.PDF [4]: https://www.healthsystemtracker.org/chart-collection/health-spending-u-s-compare-countries/ https://www.healthsystemtracker.org/chart-collection/health-... [5]: https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy https://en.wikipedia.org/wiki/List_of_countries_by_life_expe...
- chiefalchemist 5y ago
  > Squeezing the lower and middle class now does not seem like the answer. I agree. But we can't keep having the same approach and expecting change. It's been ~50 yrs since the oil crisis (read: wake up call) of the 70's. Yet here we are again...don't hurt the little guy\gal...don't hurt the Big Guys / Gals either. Well, Mother Nature is ok to hurt. She doesn't push back. Not :(
okl 5y ago
Not only is it not that much (for reference, world oil consumption is ~100 million b/d[0]), after releasing the oil it is gone and with it the threat of being able to release it in the future. I guess, the most sustainable solution to high oil prices in the short term is to implement a deal with Iran. Iran's capacity is estimated to be 3.8 million b/d[1]. An unknown factor though, is how much of that is being bought up by China already. The lacking investment to replace rotting infrastructure is already showing in some OPEC member states[2]. Unless we put more effort into reducing demand the problem will only grow worse in the future. And in my view, current efforts to reduce reliance on oil are far from sufficient. -- [0] - https://www.eia.gov/outlooks/steo/report/global_oil.php https://www.eia.gov/outlooks/steo/report/global_oil.php [1] - https://www.eia.gov/international/content/analysis/countries_long/Iran/pdf/iran_exe.pdf https://www.eia.gov/international/content/analysis/countries... [2] - https://www.argusmedia.com/en/news/2275580-opec-compliance-up-to-116pc-in-october-delegates https://www.argusmedia.com/en/news/2275580-opec-compliance-u...
- mschuster91 5y ago
  The US can always elect to subsidize fracking and oil sand mining, should it feel a need for mid-term capacity expansion. And in any case, everyone and their dog is looking to reduce their dependence on oil as far as possible as investors demand action on climate change.
throwaway894345 5y ago
Not to pick on you specifically, but the “economy vs climate” dichotomy is nonsense. The climate crisis is an economic crisis. The real dichotomy is near-term economic issues vs long term economic issues. Do we stop incurring credit card debt now or do we go bankrupt in the future?
- batshit_beaver 5y ago
  Your dichotomy is incorrect as well. We can't "pay off the debt" in the short term without significant and long lasting instability. So the better analogy might be "do we go bankrupt now" or "do we go bankrupt later," and given everything else that's going on in the world today, "later" is definitely preferable.
  - throwaway894345 5y ago
    Cutting our emissions now will be painful (precisely because we waited so long to do anything). Not cutting our emissions in time will be ruinous. These two outcomes are not in the same ballpark, hence the dichotomy. Moreover, if we collectively choose to do so, we can put the bulk of the burden on the very rich so that the economy—which is driven by middle class spending—remains strong.
    - batshit_beaver 5y ago
      Setting aside the massive issues with the whole "just make the rich pay for it" shtick, climate change is not ruinous. Humans are incredibly adaptable. We can survive just fine in even the worst predicted climate change scenario. We also have plenty of tools for drastic geoengineering if needed. Climate change is not a threat to human livelihood in itself. Humans are a threat to humans. Instability makes humans do crazy shit to each other, orders of magnitude worse than the ongoing slow motion trainwreck of climate change.
      - throwaway894345 5y ago
        > Setting aside the massive issues with the whole "just make the rich pay for it" shtick, climate change is not ruinous. Humans are incredibly adaptable. We can survive just fine in even the worst predicted climate change scenario. Some of us are aiming a bit higher than the mere survival of humanity as a species. Allowing some significant regression in civilization merely to avoid some short term discomfort is foolishness. > We also have plenty of tools for drastic geoengineering if needed. Completely untested. Hoping for a technical miracle is nice, but I prefer a concrete plan. > Instability makes humans do crazy shit to each other, orders of magnitude worse than the ongoing slow motion trainwreck of climate change. What do you think happens when our access to food, water, and various raw materials becomes inconsistent or goes away in certain places?
zthrowaway 5y ago
Because the climate agreement is theatrics. The elite still buy waterfront property, doesn’t seem like they’re that scared.
- chiefalchemist 5y ago
  Well, to be fair, some sub-corporation buys it. It's insured which is often gov subsidizing at this point. In other words, like all good entrepreneurs, they understand the risk and mitigate it.

yonaguska 5y ago

This administration has already stated that they aren't going to do much to lower gas prices, that this is just a growing period to encourage investment in green energy. Besides, Americans have been saving too much these past couple of years, what's a little bump in gas prices? All those people living at the poverty line should be just fine. The economy will recover. /s In all seriousness, I grew up in a household where the car was always on E, rising gas prices were sometimes the difference between eating or not eating. All goods will be more expensive, and this will have the biggest impact on the poor. Squeezing the lower and middle class now does not seem like the answer.

dahfizz 5y ago
> All goods will be more expensive This is something that is often overlooked. A lot of HN commenters like to be smug about how they don't use any gas, and all we need is a few more bike lanes. As if every single thing they have ever bought isn't trucked in to local stores. An increase in energy prices affects _everything_. Sharp increases in oil prices is a pretty reliable leading indicator of a recession[1]. [1] https://www.cnbc.com/2020/01/03/spiking-oil-prices-have-led-to-recessions-in-the-past-and-thats-why-the-stock-market-is-on-edge.html https://www.cnbc.com/2020/01/03/spiking-oil-prices-have-led-...
- okl 5y ago
  I'd be careful to derive causality from overlaying charts with stuff. Especially, if the source is CNBC and the sample size (on their chart) is 3.
  - dahfizz 5y ago
    Is the federal reserve a good enough source for you[1]? Oil price shocks causing recessions is widely accepted by economists. [1] https://www.federalreserve.gov/pubs/ifdp/2014/1114/ifdp1114.pdf https://www.federalreserve.gov/pubs/ifdp/2014/1114/ifdp1114....
    - okl 5y ago
      "A good case can therefore be made that rather than studying the response to an average oil price shock, one ought to consider the response of U.S. real GDP to each type of oil demand and oil supply shock. This would require a different class of econometric models that explicitly incorporates quarterly U.S. real GDP growth into a structural model of the global oil market. Such an extended model, building on the work of Kilian and Murphy (2014) and Kilian, would help in understanding the role of the deeper determinants of the real price of oil in explaining recessions, while avoiding the generated regressor problem and loss of degrees of freedom associated with alternative econometric approaches. Developing such a framework is nontrivial, however, because many of the identifying assumptions currently in use in structural oil market models are specific to monthly data, and hence is left for future research." TL;DR: It's complicated. And I wouldn't call 80$ oil a "shock", especially in relation to current asset and commodity prices. Look at prices from 2011 to 2014 - was 100$ oil shocking then?
      - dahfizz 5y ago
        > TL;DR: It's complicated. Economic modeling is complicated. The core fact that oil price shocks cause recessions is not. Your response is the reminiscent of a climate change denier saying "See! These two scientists disagree about how to model climate change, therefore it must not be real". > And I wouldn't call 80$ oil a "shock", especially in relation to current asset and commodity prices. Look at prices from 2011 to 2014 - was 100$ oil shocking then? Its not shocking as in "I'm shocked this is the price of oil". Its a price shock as in the price of a commodity rapidly changing. The absolute price doesn't matter as much as the percent change. There's no hard and fast rule about what constitutes a shock, but the price of crude oil has doubled since last November.
mschuster91 5y ago
> In all seriousness, I grew up in a household where the car was always on E, rising gas prices were sometimes the difference between eating or not eating. The solution for that is not to artificially subsidize gas consumption (which has its host of side effects on a geopolitical scale, from CO2 targets to dependencies on dictatorships), but to raise minimum wages and tax the rich to fund social security systems worth their name and actually usable public transport.
- CapricornNoble 5y ago
  >>>tax the rich to fund social security systems worth their name and actually usable public transport If you not only taxed the rich but confiscated the entire net worth of the top 1%....it wouldn't even fund the Federal government for 10 years ($41.5T vs ~$4.5T).[1][2] That's barely two Presidential terms. What next? [1]https://www.cnbc.com/2021/06/23/how-much-wealth-top-1percent-of-americans-have.html https://www.cnbc.com/2021/06/23/how-much-wealth-top-1percent... [2]https://en.wikipedia.org/wiki/United_States_federal_budget https://en.wikipedia.org/wiki/United_States_federal_budget
  - mschuster91 5y ago
    Over the last fifty years, we see a steady decline in corporate taxes (from somewhat 48% in 1970 to 21% currently [1]), as well as an explosion of extreme wealth concentration - and complaints from actual billionaires that they're paying a lower tax rate than their secretary [2]. Correspondingly, we see a drop in investments in infrastructure [3]. How about you Americans go and reverse that trend? That won't need confiscation of the 1%'s wealth, but will massively improve the quality of life of the average American. Regarding social security systems, follow the European model - single payer healthcare, no for-profit middlemen in administration gobbling up money for "bullshit jobs" - and you won't even need to spend any more tax money. To the contrary, European healthcare systems spend half the amount per capita than the US [4], with worse outcomes (as measured in years of life expectancy, [5]). [1]: https://www.epi.org/publication/ib364-corporate-tax-rates-and-economic-growth/ https://www.epi.org/publication/ib364-corporate-tax-rates-an... [2]: https://money.cnn.com/2013/03/04/news/economy/buffett-secretary-taxes/index.html https://money.cnn.com/2013/03/04/news/economy/buffett-secret... [3]: https://fairmodel.econ.yale.edu/rayfair/pdf/2019d.PDF https://fairmodel.econ.yale.edu/rayfair/pdf/2019d.PDF [4]: https://www.healthsystemtracker.org/chart-collection/health-spending-u-s-compare-countries/ https://www.healthsystemtracker.org/chart-collection/health-... [5]: https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy https://en.wikipedia.org/wiki/List_of_countries_by_life_expe...
chiefalchemist 5y ago
> Squeezing the lower and middle class now does not seem like the answer. I agree. But we can't keep having the same approach and expecting change. It's been ~50 yrs since the oil crisis (read: wake up call) of the 70's. Yet here we are again...don't hurt the little guy\gal...don't hurt the Big Guys / Gals either. Well, Mother Nature is ok to hurt. She doesn't push back. Not :(

okl 5y ago

Not only is it not that much (for reference, world oil consumption is ~100 million b/d[0]), after releasing the oil it is gone and with it the threat of being able to release it in the future. I guess, the most sustainable solution to high oil prices in the short term is to implement a deal with Iran. Iran's capacity is estimated to be 3.8 million b/d[1]. An unknown factor though, is how much of that is being bought up by China already. The lacking investment to replace rotting infrastructure is already showing in some OPEC member states[2]. Unless we put more effort into reducing demand the problem will only grow worse in the future. And in my view, current efforts to reduce reliance on oil are far from sufficient. -- [0] - https://www.eia.gov/outlooks/steo/report/global_oil.php https://www.eia.gov/outlooks/steo/report/global_oil.php [1] - https://www.eia.gov/international/content/analysis/countries_long/Iran/pdf/iran_exe.pdf https://www.eia.gov/international/content/analysis/countries... [2] - https://www.argusmedia.com/en/news/2275580-opec-compliance-up-to-116pc-in-october-delegates https://www.argusmedia.com/en/news/2275580-opec-compliance-u...

mschuster91 5y ago
The US can always elect to subsidize fracking and oil sand mining, should it feel a need for mid-term capacity expansion. And in any case, everyone and their dog is looking to reduce their dependence on oil as far as possible as investors demand action on climate change.

throwaway894345 5y ago

Not to pick on you specifically, but the “economy vs climate” dichotomy is nonsense. The climate crisis is an economic crisis. The real dichotomy is near-term economic issues vs long term economic issues. Do we stop incurring credit card debt now or do we go bankrupt in the future?

batshit_beaver 5y ago
Your dichotomy is incorrect as well. We can't "pay off the debt" in the short term without significant and long lasting instability. So the better analogy might be "do we go bankrupt now" or "do we go bankrupt later," and given everything else that's going on in the world today, "later" is definitely preferable.
- throwaway894345 5y ago
  Cutting our emissions now will be painful (precisely because we waited so long to do anything). Not cutting our emissions in time will be ruinous. These two outcomes are not in the same ballpark, hence the dichotomy. Moreover, if we collectively choose to do so, we can put the bulk of the burden on the very rich so that the economy—which is driven by middle class spending—remains strong.
  - batshit_beaver 5y ago
    Setting aside the massive issues with the whole "just make the rich pay for it" shtick, climate change is not ruinous. Humans are incredibly adaptable. We can survive just fine in even the worst predicted climate change scenario. We also have plenty of tools for drastic geoengineering if needed. Climate change is not a threat to human livelihood in itself. Humans are a threat to humans. Instability makes humans do crazy shit to each other, orders of magnitude worse than the ongoing slow motion trainwreck of climate change.
    - throwaway894345 5y ago
      > Setting aside the massive issues with the whole "just make the rich pay for it" shtick, climate change is not ruinous. Humans are incredibly adaptable. We can survive just fine in even the worst predicted climate change scenario. Some of us are aiming a bit higher than the mere survival of humanity as a species. Allowing some significant regression in civilization merely to avoid some short term discomfort is foolishness. > We also have plenty of tools for drastic geoengineering if needed. Completely untested. Hoping for a technical miracle is nice, but I prefer a concrete plan. > Instability makes humans do crazy shit to each other, orders of magnitude worse than the ongoing slow motion trainwreck of climate change. What do you think happens when our access to food, water, and various raw materials becomes inconsistent or goes away in certain places?

zthrowaway 5y ago

Because the climate agreement is theatrics. The elite still buy waterfront property, doesn’t seem like they’re that scared.

chiefalchemist 5y ago
Well, to be fair, some sub-corporation buys it. It's insured which is often gov subsidizing at this point. In other words, like all good entrepreneurs, they understand the risk and mitigate it.