> I believe the Greenspan economy, which was based on the then, West German
> economic idea of fighting inflation first was what highlighted the 1990's
> economic boom. Greenspan was confident, as his German intellectual forebears,
> that if one fights inflation and thus, refuses to permit the normal economic
> cycle to close, one can have sustained growth.
> Caveat: One clearly cannot do this during a fuel price game by OPEC, or a
> national emergency, like we are experiencing with this Islamist War. So, in
> fact, the hurd instinct which rules the stock market, affected it weakest
> link, the dot.coms, last year. My repeated suggestions for placing energy
> security first, is also a way of tamping down on OPEC oil shennanigans, and
> liberating ourselves from their greed and stupidity.
Of course, this applied not just during OPEC shenanigans, but when real
resource supply walls are hit at high economic velocities. Resource
supply walls impose real inflation upon an economy that no amount of
interest rate tweaking can counter.
The current severe drop in consumption of oil since 911 has created a
glut and price drop to the $18 range which OPEC is now seeking to
counter with a 1.5 million barrel production cut. This price drop, if it
is sustained, will hinder any effort at oil independence, although it
will permit low volume producers from legacy wells to open up their
wells again to avoid the windfall profits tax.
If we are truly interested in reviving the economy and fostering energy
independence, we need to get rid of the windfall profits tax.
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