[smiley]

$this->bbcode_second_pass_quote('goIllini', 'O')ne of my oil companies .......And if you want high oil prices to have a net positive impact on your personal economy, you can always buy oil stocks.

[GoIllini]

$this->bbcode_second_pass_quote('smiley', 'W')hen browsing through these forums you might get the impression that half of the posts are made by business execs whizzing in their private planes from one meeting to another. You know that if you want to impress people on this site with the fruits of your financial insights, that's best done via a sizeable server contribution?

[Pops]

$this->bbcode_second_pass_quote('', 'E')xactly, and the bottom line is that in a net oil producing country, high oil prices create more jobs than they cost. Even in less of a net oil importer, you lose some jobs but gain many of them back due to higher production.

[GoIllini]

LOL, a jobs graph ending in 2009? I seem to remember a certain commodity losing 75% of its value during that dip. Care to overlay that with a chart of WTI? Meanwhile, the dip from $100/barrel back to $35 provided a needed boost to the economy.

[vision-master]

$this->bbcode_second_pass_quote('', 'M')eanwhile, the dip from $100/barrel back to $35 provided a needed boost to the economy.

[GoIllini]

Well, according to Pops' model- one I agree with- consumers had more money to either save or spend on things outside of gasoline, so while the economy was in a mess, consumers were getting a boost from lower gasoline prices. That boost combined with cash for clunkers bought us a decrease in oil intensity in 2010.

[Pops]

$this->bbcode_second_pass_quote('GoIllini', 'L')OL, a jobs graph ending in 2009?

[Pops]

$this->bbcode_second_pass_quote('GoIllini', ',') according to Pops' model- one I agree with- consumers had more money to either save or spend on things outside of gasoline, so while the economy was in a mess, consumers were getting a boost from lower gasoline prices. That boost combined with cash for clunkers bought us a decrease in oil intensity in 2010.

[GoIllini]

Well, that number sounds about right. Guys off in Bakken earn $100K, spent perhaps 98% of their money on rent, food, entertainment etc, back in 2008, and we've now got the sum of a geometric sequence impacting the economy resulting in a 50x modifier from their base income. So on balance, yes, we lost $10 M per job created, but North Dakota's and Texas's economies got $5M back in 2008. Now as Bakken grows larger and the US economy consumes less oil while producing more, we lose less when oil prices go up and gain more from jobs in Bakken as production continues to increase.
$this->bbcode_second_pass_quote('', 'W')hich is it? If high oil prices are good for the economy then how can lower oil prices can't be good for the economy too?

[Pops]

I'm glad you agree constantly increasing oil prices are harmful to the economy (especially after 2 pages of citing all the reasons they aren't) now the only question is at what level do you think that harm to the economy reaches a point to stop economic growth?

(P.S. I'd love to see some sources for the idea that one $100k job creates 50 other jobs - unless they are $2,000 a year jobs that is...)

[GoIllini]

$this->bbcode_second_pass_quote('Pops', 'I')'m glad you agree constantly increasing oil prices are harmful to the economy (especially after 2 pages of citing all the reasons they aren't) now the only question is at what level do you think that harm to the economy reaches a point to stop economic growth?

[smiley]

$this->bbcode_second_pass_quote('', 'T')o answer your question, the US had an oil trade deficit of (20 mmbpd consumed- 5 mmbpd produced)=15 mmbpd x ~ $120/bl average in 2008. that works out to $1.8 Billion/day. Today, with Bakken pushing us up to 6 mmbpd of production and consumption down to 18 mmbpd with GDP staying about the same inflation adjusted, we are looking at more like a sustained $150/bl to start forcing contraction.

[GoIllini]

$this->bbcode_second_pass_quote('Pops', '
')BTW, your link to wiki was talking about fractional reserve banking which doesn't explain anything about how one $100k oil job creates 200 other $100k/yr jobs for the $10 million cost to the consumer. Maybe one or two $20k/yr jobs but 200 jobs @$100k? Why not 500? 5,000?

[Pops]

Concur.

[dissident]

$this->bbcode_second_pass_quote('seahorse3', 'C')anada has more oil than SA? Please, let me know when Canada starts producing 9mbpd. I don't care what you have in the ground, only what you can get out of it. I need to drive. You guys produce a whopping 1.5mbpd? Wow. In oil business, that's like saying you have a 1.5" penis. And, according this article, by 2025 you may get it up to 3.5mbpd. You'll still be three inches short of average.

http://www.economist.com/node/17959688

[smiley]

$this->bbcode_second_pass_quote('pops', '(')P.S. I'd love to see some sources for the idea that one $100k job creates 50 other jobs - unless they are $2,000 a year jobs that is...)

[evilgenius]

Smiley, there is a multiplier. You are right, it does not consist simply of spent money within the economy. If it did then historically Welfare and Social Security would have had a higher multiplier than they have. The fact is that Welfare and Social Security have always had a low multiplier when compared to defense spending. You could argue that is because people working for defense contractors spend more money locally, and at a wider variety of places. Economists have, however, pinned the difference on exactly what you mention, the ability to borrow. People working for defense contractors tended to live at a level where they could think about taking out a mortgage. This being the case your example of Census Workers is a bad one. Census Workers are not in a place due to that employment to consider taking out loans. The best they can do is keep on paying their bills and maybe make a few additional trips to the liquor store.

[smiley]

$this->bbcode_second_pass_quote('', 'P')eople working for defense contractors tended to live at a level where they could think about taking out a mortgage.