Energy = Economy
by Efin Advisor | December 15, 2008
Throughout history, nations have relied upon and gone to war over, the resources they need to run their economies. These resources have evolved from water, to farmable land, to the ever more volatile resource of oil. Energy is the life force of a modern economy. In the current equation, oil adds up to both convertible heat in a building furnace or combustion in an automotive engine to drive transportation.
Like all finite resources, our oil supply is subject to the market forces of supply and demand. The commodity is on a trajectory to skyrocket in price, be it in the short term or long, and must be weighed against more economical alternatives.
Just as important as the economic impacts are the environmental benefits. The right energy policy can spark the dynamism of our economy through long-term investment in renewable energy. We can create potentially millions of jobs, starting with a 21st- century economic recovery plan that puts Americans to work building wind farms, solar panels, and fuel-efficient cars. At the same time, we can reduce the carbon emissions that threaten to warm the planet through the creation of greenhouse gases in the ozone layer.
Shifting from an oil based economy would also cut our dependence upon foreign entities for our economic survival. Imagine all the money Americans would have saved this summer if gas was less than $4 a gallon. If we do not need as much gas, the money saved could be funneled into our national economy, increasing our economic strength. Energy = economy if you do the math.
How do you think America’s energy policy has affected our economy? How could new energy sources transform the economic landscape? Energize us with your ideas!
I do not think this will help the economy significantly. This is a classical economic fallacy. Creating a new area for jobs just shifts the jobs from one sector to another. No more jobs are actually created. All it will do is take the people who work on current cars, have them work on other sorts of cars, and then nothing changes. Maybe the positive attention this gets and the belief that the economy is getting better will help people invest more, but i sincerely doubt that any more jobs will actually be created because we start investing in a field that already has tons of people and will only serve to replace a different field.
The best example of this is in stock brokerage. If i create a new commodities market, that wont create any more jobs. It will likely just shift jobs from one commodity to this one. Maybe a few more jobs will be created, but it will be marginal at best
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What we need is a shift away from an oil-based energy economy. Ethanol might not be the answer, but if it’s not then we need to find the answer soon because the benefits of finding such an energy source would be astounding. Aside from the obvious economic benefits, it would take massive amount of capital and power away from the Middle East which is great for U.S. foreign influence. But as far as economics goes, it would allow consumers in the U.S. to spend less on fuel so they could have more money for the other aspects of their lives. And it could allow the U.S. to have a much bigger share of the energy market than it currently has. This is absolutely vital to the growth of our economy.
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I was driving in Connecticut last week on a business trip and I saw this sign for investing in apple oil to fuel cars. I forgot about it until just now, so I’ll need to it up, but I’m curious as to what people think about this. It seems kind of stupid and outlandish, but that could just be because I’ve never heard of it, and it may make the price of apple juice go up (I know an 8 year old girl would be very sad if she couldnt get her apple juice), but it would also be really cheap if it worked since apples literally grow on trees. That would probably make shipping and transportation a lot cheaper and thus make costs less expensive for products and help the economy.
I know there are supposedly cars that run on vegetable oil, but i hear bad things about those.
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Lawrence Reply:
December 19th, 2008 at 2:38 pm
Nevermind, apparently the company is Apple Oil Company, so its an oil company named apple. It would be a nice thought though…
How about vegetable oil for replacing petroleum oil?
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The economy will definitely improve if we invest in alternative energy. It has proven to be much cheaper in the long run for companies to use. They may lose in initial costs but save in long term energy reductions. This means we can save a lot more money in our economy that can be diverted elswhere by making this switch.
Also, just pumping a lot of money into the economy will help the economy. I think obama has a pretty good idea about what he is doing. If we put a lot more money into the economy, thats more money those companies have that they can use to hire people and try and grow, helping us all out
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Im unsure about how badly we need to make a switch to green technology. The price of oil is decreasing significantly. It’s currently $37 a barrell (i believe, i could be slightly off). That’s pretty cheap especially considered to a few months ago when it was in the 100s. I think oil is showing its here to stay for a while longer and we can rely upon it in the coming years. All the money we use on green tech could be better invested in other fields since we already have a pretty cheap energy source currently.
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