Friday, February 29, 2008

Comments?

Jake sent me this link:


http://www.cnn.com/video/#/video/politics/2008/02/28/sot.bush.gas.prices.cnn



And it made me curious what you guys would say - not necessarily political, but economic analysis of what he is saying.

:)

13 comments:

Lydia said...

i'm just leaving a comment to let you know about my posts for the week of 2/18

you only found one, so i posted on supply and equilibrium, as well as "some stuff for you"

thanks!

Vicky said...

George Bush understands the basic concept of supply and demand. Impressive, because this law is often misunderstood by many that need to understand it (such as the most powerful man in the world.)
How does Bush not know that analysts are predicting a jump in gas prices to $4/gallon? How is this a surprise? Isn't this something his advisers should be telling him so he can be prepared to DO something about it? I know there's not a whole lot he can do, but seriously.

And maybe gas should be $4/gallon. Maybe then people would use less of it, which would be a good thing, right?

fileben said...

To answer vicky's question, gas being $4 a gallon probably would not mean a huge difference in consumption. it's comparative to the example in class where electricity price went up. Nobody can go without electricity. people might carpool a little more, conserve on gas a little, but gas is a relatively inelastic good. I'm going to be consuming gas going to school every week, because a ten-mile trip on a bike in March is a little harsh for me.

fileben said...

Hey, this is the URL for my blog, 'cause you said you had trouble finding it.
http://phileapecon.blogspot.com/

thanks

Brent said...

Wow I am impressed that Bush understood that notion of Supply and Demand, but that went away shortly after when he contradicted himself more than twice. I'm also really glad he said that building refineries would make us better off in the "short-term". I'm so thrilled that he is thinking about his last year as president and not making a lasting impression. What a genious! Wow I wish I could shoot him and get away with it... Anywho, going along with Vicky I was very surprised when Bush said he hadn't heard those expectations of gas prices. He claims that building these refineries would also be kosher with environmentalists with new technologies being available. That to me says $$$$$$ and more taxes. I firmly believe that investing in alternative energy sources will benefit the economy and the environment.

savannahc said...

Well, his economics seemed fairly sound to me, but it didn't really do it for me anyways. Yeah, refineries will help in the short term, but the opportunity cost of making them is high. Once you spend money on refineries there will be less money to spend on working towards a plan for the long run. I wish that people's attachment to oil wasn't so strong that no matter how high the price they are willing to buy it. The things that we consider necessities in this country are ridiculous. Everything in my house is ridiculous. I don't need it.

P.S. I was wondering the same thing as Vicky... I don't read the new daily and I definitely don't pay attention to gas prices but even I know that analysts have predicted gas prices to be $4 dollars/gallon sometime in the near future. How has he failed to receive this information?

BethanyStoppel said...

I agree with Vicky (Bush actually does understand a simple economic concept!!). Bush's proposition to build refineries on old military bases actually does sound like a good idea. A major problem with getting approval to build refineries is that people don't want their property values to go down and the building of a refinery would do just that. I completely agree with the preservation of natural habitats(even though it might not be efficent to do so). Increasing the national supply would only be a short term solution to an increasingly long term problem.

johndav said...

Building additional oil refineries to me seems like a poor investment considering the position of world supply of oil. It is a given that we will eventually have to switch to alternative fuel, and we should probably be focused on the long run here. Although I'm not sure how long it takes to build a refinery, I'm thinking that a certain OC arises in that we could be furthering our research in alternative fuel in the time it takes to tap into more of this finite resource.

I agree with Phil in that $4 isn't a big deal, and people should be able to find ways to deal with a slight increase in price in the meantime. For those of you who've had Mr. Swantz, "pay now or pay later" definately applies here. I think sacrificing an increase in gas price now in order to research alternative fuel (as opposed to building refineries) will pay off in the end. Building more refineries may save us in the short-run, but what will we rely on in the future?

caitlin said...

Well that was interesting. I'm surprised he dared to stress the short run affects and did not talk about long term affects at all. Aren't the long term affects more important?? It really changed my view on George Bush when he seemed surprised to know that gas is suppose to hit $4 eventually, though he probably does not fill his car up with gas. For something that has become a growing problem, he knows very little about it. Though, he did study the supply and demand graph well. I we should start out with building one refinery and then see how it goes. Yes, we have predictions that it will lower gas prices and no one wants one in their backyard, but its gone to show that a lot of times we do not know what will happen until after we do it.

Lucas S. said...

I'm not really keyed-in with the economic policies surrounding how we should exploit oil to the best of our advantage, but it appears that our president is looking far into the future as opposed to adjusting to the now. This is definitely a positive towards society as a whole, yet many citizens seem to have failed to take note of his intentions. Gas is no doubt an inelastic good, and demand will therefore not decrease even in the presence of an increase to 4$. Slight accomodations will be made by people, and, in the mean time, anyone with common sense would be ever-willing to pay additional money now for fuel, knowing that he or she will be in good hands in the end. Bush definitely seems to be headed in the right direction, at least as far as fuel goes, by investing money into the research of alternative fuel as opposed to simply building more refineries.

Laura said...

I agree with what many people said about building refineries being a short term thing. I think that it would probably make a lot more sence to invest in something not having to do with gas at all, like alternative fuel sources. Economically it would probably not be that good short term, but in the long run I think it's the best thing we coudl do.

fileben said...

Actually, I'm not sure I'm opposed to looking into the near future and building an oil refinery. If we invest into alternative energy sources, taking the "pay now" attitude, what happens if we don't find what we were looking for in alternative energy sources? we'd be stuck with neither a refinery or alternative energy, whereas if we put in a refinery it buys us time to look for alternative energy. It's definitely a gamble, and i'm not sure abandoning oil is the smartest choice.

Lucas S. said...

Phil brings up a real good point here that many probably failed to think about. Being able to provide fuel for a consistent and long period of time is probably one of, if not the highest economic priorities of our country right now. It seems that Bush is basically ensuring his nation that it will be in good hands in the near future, but it also seems that his plans may have some drawbacks. Maybe by first making sure that the quantity of oil refined and available for use is at least somewhat increased, he can then be comfortable in beginning to look for alternative sources.