Running to stand still

October 30th, 2007 12:55 pm · 1 comment

But let’s take this a step further, because I see both Matt Yglesias and Atrios are sort of scratching their heads over the “Kunstleresque” vision of suburbia in meltdown over the price of oil. Writes Yglesias:

Hybrid cars are already available on the market, are much more fuel efficient than conventional autos, and with the “hybrid premium” standing at a few thousand dollars and falling, it seems obvious that if drastically higher fuel prices emerge, middle class suburbanites are going to respond with slightly altered consumption habits (more expensive cars, fewer plasma TVs and granite countertops) rather than radical lifestyle alterations

Sure. But place this in context.

That context being, not only does higher oil prices affect what they are paying at the pump, it affects what they’re paying at the grocery store, at Wal-Mart or wherever; it affects the price of transport, period, it affects the cost of food in that pesticides are derived from petroleum; a continued rise in the price of oil portends a continued rise in the price of virtually everything. Commeasurate? Maybe. Possibly not.

But at the same time all of this is occurruing, we see the price of electricity go up here - 34 percent in five years. For those of you lucky enough to have employer-sponsored health care: Do you wish to hazard a guess as to how much the price of that will increase in the coming year?

Were these increases to match the pace of inflation they might be manageable. But we are talking increases that vastly outpace the rate of inflation. By January 2008 local PPL customers will be paying, at minimum, 19.1 percent more for electricity; should the price of oil continue to rise as it has, those who heat their homes will oil will see their costs rise at least that much, but possibly more; and then there’s gas for the car. And all of this is obviously only the beginning.

What you are talking, then, is a hell of a lot of people who have to run to stand still, economically. And the ranks of those marathoners are going to grow.

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  1 comment  Tags: Energy · Economy

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Artie See
10/30/07
10:17 PM
The price of oil is going up primarily because the value of the U.S. dollar is dropping dramatically. Oil-producing nations need more dollars to generate the same value of cash flow as before.

Yes, electricity rates are going up. The problem is that the lie of "deregulation" managed to practically shut down investment in electrical infrastructure, i.e. generating facilities and transmission lines.

Without "deregulation", electricity rates would have gone up anyway, but much more slowly. And rates will go up even more than they would have without "deregulation", because of all the inevitable infrastructure upgrades that were delayed for a lack of funding.

The only people who won under "deregulation" were a very few speculators.
Have you noticed how the "competing" electrical suppliers have faded away?
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