Come on Krugman, now you forget Econ?

Guess Krugman forgot a little econ while he was off writing baseless columns predicting quagmires–his column today, on oil, is just wrong.
First of all, the reason the price of oil is so high is that there is a body called OPEC controlling the flow. As Krugman should know, any cartel–or market imperfection, as economics would term it–limits supply in order to pump up the price. The fact is that oil prices can be significantly lower, if the market were freed of this oligarchic influence.
Second, no major oil finds since the 70s? Has Krugman forgotten that Oil itself is nothing more than an input for energy, and that along with the massive North Sea and Russia finds of natural gas, there has been an increase in the quantity of carbon-based energy in the past few decades? Seriously, who is his editor, and where is his conscious?
Third and last–because I could continue fisking this article all the way through–is the fact that technology has become much more energy efficient in the past decade–so much so that energy deposits can last much, much longer than Krugman suggests. See this article in the Jerusalem Post, and the conclusions of a report by the Institute for the Analysis of Global Security. Yes, the Bush Administration is horrible when it comes to mileage-standards on automobiles, but the fact is that were an energy-sane administration to come to power, technology would more than account for the increase in demand for oil.
So while Krugman tries to scare us with horror stories about China and increased demand, he misses the point entirely: the problem is with the supply side, and the demand side is getting better all the time. Maybe Krugman should just stop writing, seeing as how both his political and economic arguments are like sieves.


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