4 ms·

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 gree

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.
        okl 5y ago
        > therefore it must not be real I've never claimed the opposite. There is space between black and white. Granger causality in economics differs from the classical principle of causality typically used in natural sciences like climatology. My comment was "I'd be careful to derive causality from overlaying charts with stuff."
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 :(

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.
      - okl 5y ago
        > therefore it must not be real I've never claimed the opposite. There is space between black and white. Granger causality in economics differs from the classical principle of causality typically used in natural sciences like climatology. My comment was "I'd be careful to derive causality from overlaying charts with stuff."

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 :(