by Robert Reich

[elleng]

'Oil prices hit their lowest in over 11 years today, because of (1) increasing supply (a sharp rise in U.S. production of shale oil coupled with the unlikeliness that Saudi Arabia and Iran will cooperate to cut their oil output -- especially as Western sanctions against Tehran are lifted, and (2) falling demand (especially from China and India, as growth slows in both nations).

That’s good news for American consumers at the gas pump, but bad news for the U.S. economy as a whole (which has grown increasingly dependent on oil production). It's also bad news for alternative energy sources – wind, solar, and biomass – which were attracting lots of new investment when oil was more expensive (thereby also boosting political possibilities for moving away from carbon fuels) but are now in limbo.

What do you think?'

https://www.facebook.com/RBReich/?fref=nf

[Ed Suspicious]

1. I think what's good for consumers is good for the american economy.

[pipoman]

2. I can think of many instances of this not holding true...

Most obvious is purchase of foreign goods to save money when a domestic product is available for marginally more...

[Warpy]

3. Given there's a vast difference in quality between foreign and domestic goods

with the domestic ones being of higher quality, people might choose to pay a little more for domestic goods were they paid enough to have a choice in the matter.

With wages depressed over the last 40 years, this is simply not the case.

[Warpy]

4. Cheap oil is bad for the stock market, especially the energy sector

because their investments in tar sand and shale oil retrieval aren't going to pay off until prices go back up. The face price of the stock has declined but the earnings are also up.

With the ongoing instability in the Middle East, there is still a great deal of pressure to develop and fund conversion to renewable energy along with converting to more and more energy efficient living.