Light (Crude) Reading

Houston Tomorrow published this summary of the long discussed stimulus bill that Obama plans to pass as soon as he takes office. They the following:

Relatively speaking, the stimulus bill marks a tenfold increase in transit spending, perhaps the biggest sign yet that mass transit is becoming politically popular.

That’s good news.

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What’s not good news (especially for Houston!) is this: Oil prices are sharply down, nearing 5 year lows; however, gas prices are not dropping in tandem.

Energy companies are having a hard time with the radical swings in the price of oil. It’s hard to keep your supply and demand balance in line when the price shifts so dramatically, and that makes it hard to determine the right margin for profit on top of the import price. But not only Houston is hurting, Hugo Chavez is pandering for a bailout these days too. It’s difficult for the market to handle radical fluctuations in commodity prices, and when energy does this it gives the market no signal as to whether or not to invest in increased effiency and begin shifting away from foreign oil or to go buy a new hummer. Sounds like a good reason for a floor on the price of oil if you ask me…

In one form or another, we need to put a permanent price signal in the market to domesticize our energy supply. There really should be no debate about this. Thomas Friedman makes a compelling case for this in a recent Op-Ed: Win, Win, Win, Win, Win…

The most important thing to remember, no matter where you sit on the spectrum of urban/suburban, democrat/republican, conservative/liberal, America always looses by being hooked on foriegn oil. We need to put a steep tarrif on oil imports, and we need to do it fast. And here’s a novel idea, why not use some of that money to pay down our national debt, and perhaps even lower the corporate income tax!

The auto-makers seem to be convinced that long term prospects for a gasoline-powered society aren’t good, they’re all starting to build electric cars.

“In spite of the many challenges that we face, I can honestly say I have never been more excited about our prospects for the future,” said Ford Chairman Bill Ford Jr., as he outlined Ford’s electric vehicle strategy.

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Well, in this time of change I suppose we can at least be comforted that people aren’t pinning desperate, unrealistic expectations on the incoming Obama administration. Oh, wait…

What I wonder is this, despite all the hype and histeria surrounding the election of Obama, fate seems to be working against him. Certainly there have been few presidents to enter office with such difficult timing.

What do you think? Let me know by posting a comment!