Dispatch from the Frontier
Paul Krugman of the NY Times had recently seemed to be showing signs of having a clue about peak oil, but in today's column, he argues that we won’t see a repeat of 1970’s stagflation, even though everyone has suddenly discovered that the Fed was doing the wrong thing for the future (if there’s a right thing the Fed could do) by cutting interest rates as oil was about to drive the price of Everything through the roof.
No more health insurance, but colonoscopies are free!
A quote from Krugman's article:
But where are the unions demanding 11-percent-a-year wage increases? (Where are the unions, period?) Consumers are worried about inflation, but you have to search far and wide to find workers demanding compensation in the form of higher wages, let alone employers willing to accept those demands. In fact, wage growth actually seems to be slowing, thanks to the weakness of the job market.
And since there isn’t a wage-price spiral, we don’t need higher interest rates to get inflation under control. When the surge in commodity prices levels off — and it will; the laws of supply and demand haven’t been repealed — inflation will subside on its own.
So Reagan breaks the backs of the unions, and Bush breaks the spirit of the consumer, making sure that no-one would have the power or will to demand compensation when it finally came time for the super-rich to take the rest of their money. Even the Elite Formerly Known as Wealthy are selling the silver and waiting on their rebate checks with the rest of the hoi polloi.
On the bright side, I get to keep my barrel!
Is it too much to theorize that the Bush clan made a pre-election deal with the Saudi branch of the family to crash the US economy, so that its assets could be sold off at fire-sale prices at the end of Term 2? Will Bush be retiring to Riyadh, rather than Crawford or his 99,000 acre spread in Paraguay, to watch the decline of the Ghawar field, and the end of America along with it?
Well, I'm all right, Jack. I've got my pot.