[cube]

There seems to be a lot of bellyaching about the cost of oil these days. However I beleive expensive oil is not the main threat of PO.

huh what? Give me a minute to explain.

Oil touches every aspect of our lives and is used in the production and transportation of just about everything. Therefore when the cost of oil goes up everything goes up. But that's not the main problem. The fact is the cost of oil relative to the total production costs of most products isn't that great.

For example when you buy a $3 cup of coffee at StarBucks how much of that $3 dollars went to buying the fossil fuels to produce the fertilizer and pesticides for the coffee beans? A drop in the bucket. Granted that's an extreme case. On the other end of the spectrum would be an aluminum smelting company where sometimes it would be cheaper just to shut the plant down whenever the cost of energy gets too high.

Now lets look at this from a different angle. Assume there's a massive electricity shortage so everybody has to ration. That Starbucks store now must remain open for only 7 hours per day instead of 14. There's a massive oil shortage so instead of going to work 5 days per week you have only enough gas to drive to work 4 days a week. Now imagine how much money we're losing here?

My argument is, "The primary threat of PO is not the rising cost of oil but instead a shortage of oil which forces us to ration."

anyways I'd like to hear someone else put in their 2 cents

[smiley]

$this->bbcode_second_pass_quote('', 'F')or example when you buy a $3 cup of coffee at StarBucks

[killJOY]

well, yeah. High prices&scarcity--the yin&yang of depletion. first one, then the other. I'm more frightened of the latter than the former. "I'm sorry. No HappyMealToy today. It's plastic, ya know. We're hording it for hip replacements now."

I'm letting my lawn grow out this summer. Maybe get me some sheep to graze around the apple trees. I'm also in the process of fertilizing the hell out of my hay field. Might be too expensive to run the tractor later.

$.02

[bruin]

You have a point.

Go back to WWII in the USA. The problem facing those at home was not expensive supplies but the rationing due to shortages.

[jato]

$this->bbcode_second_pass_quote('', 'F')or example when you buy a $3 cup of coffee at StarBucks how much of that $3 dollars went to buying the fossil fuels to produce the fertilizer and pesticides for the coffee beans?

[seldom_seen]

I agree, rationing will have an effect on the economy, but that doesn't discount the fact that rising oil prices will be a problem too.

When oil prices go up, inflation follows, lagging behind a bit. I'm not sure the inflation from the rise in oil prices over the last year has fully set in yet. So gas goes up, as does everything else.

You can look at the rise in prices in several ways. Think of it as a new tax that has been levied. Except the taxes don't go to the government to benefit public services and make your life better.

Or you can think of it as a pay decrease. You now have less money. Money = power, power = energy, energy = the ability to do work.

So you now have less ability to do work with your money. Which means you will be hiring less people to work on your house, you will be taking less vacations. You won't be able to buy that new car, and you may realize the situation isn't that good and divert most of your money to paying off your debts.

If enough people do this, then the people that were counting on you to show up for vacation will run low on money and lose their jobs. They will then have less money, and they won't go on vacation or buy new cars or hire people to work on their houses.

Since so many people have stopped spending money, the guy who was supposed to sell you the new car lost his job as well so he will stop going to Walmart and people from Walmart will lose their jobs.

As you can see this process sort of sets off a wildfire that could get out of control pretty quick.

[NeoPeasant]

$this->bbcode_second_pass_quote('jato', '')$this->bbcode_second_pass_quote('', 'F')or example when you buy a $3 cup of coffee at StarBucks how much of that $3 dollars went to buying the fossil fuels to produce the fertilizer and pesticides for the coffee beans?

[cube]

$this->bbcode_second_pass_quote('smiley', '')$this->bbcode_second_pass_quote('', 'F')or example when you buy a $3 cup of coffee at StarBucks

[bobbyald]

You are all missing the point here.

$this->bbcode_second_pass_quote('', 'M')y argument is, "The primary threat of PO is not the rising cost of oil but instead a shortage of oil which forces us to ration."

[Doly]

$this->bbcode_second_pass_quote('bobbyald', '
')The market will ensure that there will never actually be a shortage at the market price. If rationing is introduced it means that the government has effectively abandoned the markets method of allocating resources (price) and introduced its own (need).

[jimmydean]

Rationing is an extreme that will cause incredible public unrest. No politician in his right mind will consider this until it's a crisis situation. I suspect we'll see $4-5/gallon fuel at the pumps first which will in effect will cause self-imposed rationing. Many won't be able to afford cars and revert to public transporation or scooters/motorcycles or even bicycles.

[bobbyald]

$this->bbcode_second_pass_quote('', 'I')n other words, if it's all left to market forces, oil prices will increase to the point that some people can't afford it. Considering that energy is a necessity, rationing is the only way of stopping prices going through the roof.

[JoeW]

$this->bbcode_second_pass_quote('jimmydean', 'R')ationing is an extreme that will cause incredible public unrest. No politician in his right mind will consider this until it's a crisis situation. I suspect we'll see $4-5/gallon fuel at the pumps first which will in effect will cause self-imposed rationing. Many won't be able to afford cars and revert to public transporation or scooters/motorcycles or even bicycles.

[twofiftyfive]

$this->bbcode_second_pass_quote('JoeW', 'T')hey are already paying $1000/yr, so maybe they trim $1000 from their budget by cutting out their life insurance, reducing their car insurance to the bare minimum, or start packing lunch instead of eating at the Costlee Cafe.

[threadbear]

Rationing implies an egalitarian approach, an even-handed attitude that further implies a govt that would be very impatient with corporate restraint on supply and price gauging, during a real crisis. Rationing is a Utopian dream compared to what could happen in the event of a real energy crisis in the US.

In the event of a real crisis, the govt will continue to advocate a "free market" solution, wherein corporations can jack up the price to completely absurd levels, catering to just 10% of the citizenry, (if that.)

It's at this point that the many veils of illusion protecting free market theory peals away and the average community starts to build guillotines.

[cube]

You can bet there will be some type of government mandated rationing of some sort when PO hits. Everybody likes to advocate the "free market" system. However that's only true when there's an ample supply and lots of competition to keep prices low. Once things get crazy and the price goes skyhigh all of a sudden people give up on capitalism and advocate Communistic approaches like "price controls" which ultimately leads to rationing.

[threadbear]

Cube, You say "people" will give up on capitalism. I'm sure they will, but corporations won't give up on them, nor will they turn their backs on a system that has done so much for them. The general consensus may not amount to much in the future. Your post indicates you think you're living in a capitalist democracy that will become a social democracy, when things get rough. Wrong on both counts.

[jaws]

$this->bbcode_second_pass_quote('threadbear', 'C')ube, You say "people" will give up on capitalism. I'm sure they will, but corporations won't give up on them, nor will they turn their backs on a system that has done so much for them.

[threadbear]

There are the corporate worker bees and then the reptilian overlords, not truly people in the traditional sense, more like a bestiary of convenience.