Dan Drezner poses an interesting question. Both political parties have worked themselves into a panic about high gas prices, but energy costs as a proportion of personal consumption have declined dramatically over the past thirty years. The economic impact of high energy prices is low, but the political cost is high. Why? He poses three answers:
1) Oil production is tied to the Middle East which is a politically hot topic.
2) Oil is one of the few products controlled by a producer cartel. There is someone to blame.
3) Oil is one of the few products about which consumers have a lot of information. They can therefore react instantly to price changes.
His point is well taken. This gas crisis is bound to be far less problematic than that of the Seventies. But I would disagree with his analysis. The Middle East connection has not dominated discussions of the subject. OPEC is a famously ineffective cartel, the members of which constantly cheat. A well-informed consuming public would be aware that the crisis is not all that important.
Read Dan's analysis here.
I would point to another factor. A significant portion of both the journalistic and political communities are still mired in a sixties/seventies mindset. They relate everything that happens today to what happened then. Iraq is portrayed as a replay of Vietnam. Gay rights is the new Civil Rights. Bush is the new Nixon. Every perceived scandal is a "gate." And, to them, the spike in gas prices is a replay of the Nixon-Carter energy crisis. The consequence of this mind-set is that the public is incessantly barraged by commentary and imagery telling them that this is a huge crisis. Who can blame them for worrying?
No comments:
Post a Comment