Six months ago, I claimed that if Paul Krugman made a prediction, it was a good bet for his prediction to fail. So, how did that prediction turn out?
The View From North Central Idaho
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That particular “prediction” was pretty vague, so it’s hard to judge…
But the economy is doing OK, despite gas being up a bit (not as bad as under Biden).
So, you know, business as usual. I as I said in that thread, Krugman’s “predictions” are based entirely one single factor – when there’s a Democrat in office, his “predictions” are for good things, and when a Republican is in office, his “predictions” are for bad things. That’s it.
I don’t see any camels with their backs broken. I say Krugman was proved wrong.
I dislike the guy and think he’s generally wrong, but in this case six months may be a bit early to judge. We’ve just about pumped out all the recoverable oil from our SPR (as have most other nations), attacks on oil and gas infrastructure continue in the region–damage that will take many years to repair–and Iran and the Houthis have shown that the US generally can’t fight a modern war nor protect its allies in the region. Even with SPR-buffered pricing, farmers are getting hit hard by their input pricing going up 50%; what’s going to happen when the SPR is done, input prices go up another 50-100%, and a loaf of bread costs $10?
“ran and the Houthis have shown that the US generally can’t fight a modern war nor protect its allies in the region.”
Well, not with the kiddie gloves on, anyway. Line up the B-52s, go back to sane RoE for actual enemies, and the war with all those groups would have been over in 2 weeks tops.
But the body count from that would be higher than a lot of people are willing to tolerate (nevermind that those same people are perfectly happy with MUCH larger body counts… as long as someone else does it).
“Even with SPR-buffered pricing”
The SPR does not have a significant impact on gas prices. It was never meant to – it was supposed to be for military purposes.
But Democrat Presidents have used it to get slight downward bumps in the gas price right before elections (with a cheerleading media acting like it was really a big deal) often enough that Republicans aren’t going to refill it anymore. Hard to blame them.
It won’t double food prices when it runs out. It never made anything CLOSE to that level of difference. Food prices didn’t double under Biden, with noticeably higher gas prices for a longer period of time AND other inflationary pressure from government stupidity.
You are fear mongering.
Edit: this was supposed to be hanging from sobiloff’s post, sorry.
I hope I’m wrong, Deoxy! I know the history of calamitous predictions usually underestimates human ingenuity and things turn out better than they otherwise might have. As for the SPR, it doesn’t matter what it was created for. It’s used by politicians to reduce gasoline prices, and in this war it’s been widely credited for keeping barrel prices from hitting $150. This prevented $6 gas, but with that buffer rapidly disappearing, gasoline will keep creeping up. The SPR doesn’t help diesel prices (it’s a different kind of crude); apologies for conflating the two in my original post. Diesel was $3.70, now it’s $5.90 and it’s not going to go down any time soon. That impacts every consumer good, every farmer, and every industry.
“That impacts every consumer good, every farmer, and every industry.”
It does. But we’ve already endured higher prices (under Biden), for longer, without the kind of pain you’re talking about (food prices did not *double*, not even close, even with *additional* pressure from inflationary stupidity from the government at the same time), and that was WITH Biden making extensive use of the SPR… which, again, doesn’t really help all that much. It’s not BIG enough to help all that much, as that was not the point of making it.
But apparently, we aren’t allowed to have nice things – they just get abused by politicians. In my lifetime, that’s been overwhelmingly one party more than the other, but I hold no illusions that “our” side’s politicians are actually any better on the whole, just more constrained by their voters (for now).
Yes, the reserves of crude oil, like our US Strategic Petroleum Reserve (SPR) have been utilized since shipping went to Hell in the straights of Hormuz and are nearly depleted.
The World including the US has used most of what’s available in order to keep prices reasonable. That is coming to an end very soon.
In 2025, the US was the world’s largest producer of crude oil. We are also the world’s biggest consumer! We still use MUCH more oil than we produce. If the easily found figures on the Internet are correct, the shortfall is millions of gallons per day.
This is going to hit our economy, and every other First World and developing economy around the world HARD!
Russia may be an exception but they have a different fuel crisis with so many pipelines and refineries damaged due to Ukrainian drone strikes.
To steal a phrase from one of my favorite films: “It’s a giant $hit sandwich, and we’re all gonna have to take a bite!”
No, the US is actually a net producer of oil, even after our usage.
Here’s an quick link that has them both together:
https://www.eia.gov/tools/faqs/faq.php?id=727&t=6
We DO import oil, but we also EXPORT oil (for various reasons on both), and on net, we export more than we import. Been that way for several years, and if the price of oil goes up, we can easily ramp up production even more.
The webpage you provided the link for is full of excellent information. It appears the difference between those figures and the figures I used is “crude oil” vs. “total petroleum products”. Your figures include all petroleum produced in the US including millions of barrels of Hydrocarbon Gas Liquid (HGL). The US is a huge exporter of Liquified Petroleum which is used world wide for cooking and heating but is NOT used extensively anywhere for transportation that I’m aware of. I’m mostly interested in production, importation and exportation of crude oil and refined products used for transportation: diesel, gasoline, jet fuel, etc.
I think crunch time is rapidly approaching for the US for transportation fuels.
Unless Uncle Sam can magically produce a fleet of vehicles that run on Liquified Gas.
If we can pull that off we can ignore the international petroleum rigmarole and really be petroleum independent.
There would be a minor matter of third world nations returning to wholesale deforestation in order to cook and keep warm….
Diesel can be made from air, if you have a power source. I assume gasoline can, as well, though I haven’t seen an explicit example of it.
There’s no reason for us to EVER run out of petroleum liquid fuel, save our own stupidity…
Oh, OK, now I’m worried!
Well, cars can run on methanol, certainly if you replace the hoses first. And methanol can be made from wood, which comes from air and sunlight. That sort of thing was common practice in WW2, in a bunch of European countries.