Economics isn’t my specialty. Indeed, I don’t have any specialties.
I’m trying to understand why some economists now think the declining price of oil and the concurrent drop in gasoline prices is somehow bad for the recovering U.S. economy.
Does anyone else remember when crude prices were skyrocketing from, say, $40 per barrel to more than $100? The stock market went bonkers. Investment accounts were drained of billions of dollars.
However, the oil industry made a gigantic comeback. NPR this morning did a story from West Texas detailing how pump jacks that once stood like dinosaurs have jumped back to life and are pulling out of the ground.
A lot of other factors have contributed to the nation’s economic rebound.
Moreover, a lot of factors are contributing to the glut of oil that’s driving its price downward.
Now we hear that the economic recovery might be jeopardized by the plunge in oil prices.
The oil boom might fizzle out at the production end, but what about the increase in disposable income for motorists who aren’t pouring as much money into their fuel tanks?
Will they be able to spend more of that income on other essential — and non-essential — items?
Economics can be a complicated issue. This oil price up-down cycle has me confused.