Comments on: Are All TV Commercials Aimed at Ignorance? http://libertarianstandard.com/2012/01/08/are-all-tv-commercials-aimed-at-ignorance/ Property - Prosperity - Peace Sat, 09 May 2015 08:06:55 +0000 hourly 1 http://wordpress.org/?v=4.2.4 By: ricketson http://libertarianstandard.com/2012/01/08/are-all-tv-commercials-aimed-at-ignorance/#comment-2313 Tue, 10 Jan 2012 04:53:49 +0000 http://libertarianstandard.com/?p=10299#comment-2313 Good points. My one disagreement is that I think that the “energy independence” mindset arises from legitimate concerns about the role of oil in our economy. Basically, I think that a lot of people are making major economic misjudgements in how they use energy, and these misjudgements regularly produce negative social and political consequences for the rest of us.
I’ll try to break it down…
1) The price of oil is volatile. This is in large part due to political instability in the oil-producing parts of the world (which may itself arise from the high export value of oil, but that’s a different argument). There is also a legitimate concern about “peak oil” — that the depletion of easily accessible oil deposits will result in a rapid increase of oil prices (and this whole process is exacerbated by rapid global consumption of oil).
2) Demand for oil is inelastic, and it accounts for a substantial portion of our expenses. For instance, the USA’s trade deficit for oil is about 1% of GDP (http://www.calculatedriskblog.com/2005/04/oil-imports-as-of-gdp.html). Consequently, when oil prices jump, many households have a hard time cutting back oil consumption (which often requires major capital investments or lifestyle changes), and end up with substantially increased expenses.
3) When the price of oil jumps (as people like Maddow expect it to), these increased expenses incurred by other households will have ripple effects throughout our economy and society. Households have trouble making ends meet, which means: they are not credit-worthy and we have fewer people to do business with (alternatively, the increased expense of oil diminishes demand for the services –and assets such as houses — that we provide domestically); they have fewer resources to contribute to community goods (e.g. keeping their house/yard looking good, paying taxes, donating to charity); they may sink into poverty, with all the associated ills (e.g. family breakdown, increased crime); finally, they will be more likely to vote against incumbent politicians, providing politicians with an incentive to implement politics (both domestic and foriegn) that will keep the price of oil from increasing.
It’s easy to say that consumers will “move on” if the price of oil goes up too much — but that process will take a few years, during which time the consumers are facing major stresses. It’s easy to say that politicians should just let prices jump, but any realistic understanding of politics tells us that they will do anything they can to postpone any “adjustment” to the economy –because adjustment is difficult, and voters will take it out on the politicians, and they typically won’t realize why they are doing it.
So Maddow’s rants against “oil dependence” and exhortations to reduce consumption are completely rational and sincere. She is trying to focus her audience’s attention on a risk that they face (oil price jumps) and directing them towards a path of action that will minimize the cost that they would incur (and then pass on to the rest of us) should we encounter that problem.

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