Quote:
Originally Posted by spence
If energy prices are too low the producers can't continue to compete with foreign interests given higher production costs.
The production, of U.S and Canadian oil, or threat of it if price drops are too severe, would keep oil from being priced at economically high destructive levels.
I see, now you're all behind the fed monetary policy.
Sometimes the fed policy is good. I like cheap credit, personally.
It has less to do with regulation and more to do with the production methods. Saudi oil is easy to pump and easy to process. They can do it cheaper mostly because it's less work. They don't set the price of their oil either, it's a global market, though their margins may be better. All they can do it adjust output and influence the supply which they certainly do.
Regulation is preventing conventional oil drilling, as in ANWR, outer continental shelf, Gulf of Mexico, or any exploration on Federal land. And regulations restrict the number of refineries. And labor regulations create inflated labor costs in general, which affects, indirectly the cost of producing anything here compared to Saudi Arabia. The global market cannot sustain artificially high prices if oil production is high enough. As is demonstrated by the Saudis recent dramatic rise in production, lowering even further the cost of oil, in order to make unconventional production such as fracking or shale recovery less economically attractive. On the other hand, because of the advancing technology in unconventional drilling, the Saudis won't be able to let prices rise to more than $60/barrel or thereabouts. And the existing unconventional drilling is already in place so start up costs are not part of the equation. And Canada is shipping oil from its reserves to our refineries.
The economics aren't a smoke screen, they're economics. For all the blabbering about Obama trying to destroy the industry it's flourished under his tenure, perhaps a bit too much.
His tenure has nothing to do with the flourishing. It has happened in spite of him.
Not glee, just reality. We'll see how those friendlier policies fair if the global demand doesn't pick up and keep the cash flowing.
Which is why I said Texas is drawing businesses (other than oil, obviously) with friendlier policies.
Or, perhaps they could do what Minnesota did?
http://www.huffingtonpost.com/carl-g...b_6737786.html |
Minnesota's unemployment rate was already recovering from the recession before Dayton was elected. And it's rate under Pawlenty, before the recession, varied from the same current rate under Dayton, and even lower at 3.5%, to its high point in the national economic collapse in 2008. With the exception of a spike in 2011, Minnesota's rank in terms of unemployment improved every year, and the trend continued under Dayton. Of course, the actual comparisons would have to include the declining rate of labor force participation. So the actual rate is higher. How much it was so due to the same factor during the previous administration might tell a different story. But, in fact, labor participation rates in Minnesota compared to the rest of the country has been well above the national average long before Dayton came to power. But the state has seen little improvement in
underemployment since the recession. And Minnesota passed it's "neighbor in the east" in per capita income as far back as the 1960's and grew every year since then, including under Pawlenty, and the trend continued under Dayton rather than being something that he started.
As for the raising of taxes on upper incomes, that didn't occur till last year, not "during his first four years in office" as the article states, implying a connection which may not be sustainable. It is a well known economic phenomena that a raise in taxes used for governmental infusion of money into its spending will boost the economy initially, but a lag time of about two years or more, if I recall, is required to tell what the lasting impact might be. High tax rates which have existed in other states for longer than the lag time don't show the same dramatic results. California, for example.
And the minimum wage hike referred to in the article won't be accomplished till 2018. So it is unknown, at best, what the impact of it will be. The vast majority of economists, of various schools, agree that raising minimum wage has a negative effect.
And the legislation guaranteeing equal pay for women sounds like an election ploy, since federal law already mandates that.
And, as the article says, median income has fallen from $10,000 above the national average to $8,000 above it. In fact, Minnesota ranked 8th in median income in 2007 during Pawlenty's administration, to 11th in 2013 under Dayton.