As I write this piece gasoline around here is $3.29 per gallon. Diesel fuel is higher. Food prices are expected to increase about 18% by summer and gasoline is projected to go to more than $4.00 per gallon. More if Saudi Arabia is drawn into the uprisings in the Middle East. What we are seeing is a dramatic restructuring of economies that have factors held in check for some time. Just like the housing bubble that burst is restructuring housing prices these events have the potential to do the same for energy and food.
Corn is selling at its highest prices ever and is being driven by our insatiable thirst for fuel that will drive an internal combustion engine. The demand for ethanol is spiking and the resultant prices for corn are taking food pricing with it since corn plays such a large part in food production.
I want to make a point here, before we go much further. In my opinion, if you think the worst of our economic downturn is over then you at least have to recognize the potential for it to get much worse. If fuel prices rise and stay high that is money that is desperately required to keep our economy from slipping back into recession or even depression. Food prices will necessarily remove that money from the discretionary column and put it into the non-discretionary column.
Here is my point. Do you think that we can’t afford to begin to design and implement alternative forms of energy production? Well, it seems to be obvious that we cannot afford to wait.
Here is my point. A trucker on television today said that the fuel bills for operating his truck are eliminating the income he generates. Trucks move a preponderance of our food and are very susceptible to fuel prices. Do you think we can’t afford to develop alternative means of transportation or is it plain to see that we cannot wait?
What we will hear is that we must pour more into developing domestic fossil fuel production and that may indeed be the case. However, it should be clear that we can’t put all of our eggs in that basket. Fossil fuel is dying and we are dying with it. The changes that have to be made are immense and the only entity that is equipped to marshal the resources in advance of desperation is government. Government is best equipped to deal with these huge projects either by encouraging private investment or by building infrastructure and maybe both.
Understand this. The United States still has the largest economy in the world by far. We are still the richest country in the world by far. We still are the leader in invention and innovation by far. But it is not as far as it used to be and it will get tighter. There is nothing wrong with that and it is a good thing that people in the rest of the world will rise out of poverty and want to share a piece of the wealth. What we need to do as a people, as a nation is to prepare for a future in which we do not overconsume to the point where we use up 25% of the earth’s resources. We must become better stewards of our natural resources and smarter consumers of imported resources.
The mantra you hear now on the evening news and on the talk shows is that we are broke and can’t afford to do these things. I am going to tell you that is poppycock. Yes, that’s right. Poppycock. How can it be that the richest country in the world with the best educational institutions and the best incubators for innovation and invention is too broke to plan for its future? The answer is that it can’t be and that our problem is not that we are broke. What we are suffering from is an underutilization of resources and misallocation of assets. We have the resources and assets to do anything we want to do if we do it properly. The problem is that we have allowed those resources to occupy an artificially created and sanctified space that removes them from being used by our country.
Can we afford to care for our people who need health care? Yes. Can we afford to provide a modicum of security for our aged and infirm? Absolutely. Can we afford to create a nation that gets its energy from renewable resources? Of course. The answers are there to be seen by anyone who has eyes to see.
That is my take on our future. If you are curious just how we can do this drop me a line.
No comments:
Post a Comment