2008-12-26
The Bad Economy Has a Bright Side
The media can't get enough of telling you how bad things are. And they are, but there are bright spots:
- Oil prices have plunged, part one: From above $140 a barrel, they are now below $40 a barrel. This has obvious benefits to the consumer and, according to Economist James Glassman, may function as a $350 billion stimulus package.
- Oil prices have plunged, part two: You know that part about how, thanks to our oil addiction, we send all of our money to people who hate us. Well, the countries that love to irritate us--Iran, Russia, and Venezuela, to name three--aren't getting as much of our money these days. And they aren't quite as cocky.
- Oil prices have plunged, part three: Even though oil prices--and with it, gas prices at the pump--have dropped, Americans are still driving less. That multiplies the above benefits.
- Americans are becoming more frugal: This is exasperating economists and feds who say we need to spend more, but this is not a bad thing. The main reason for the bubble is that we were spending too much, gorging ourselves, and it made us sick. Now we're recovering--we're spending less, saving more, and paying off our bills. Healing is painful, but it is, after all, healing. For the most hopeful view on this phenomenon, visit daveramsey.com.
- We're going to get infrastructure: The perceived necessity of an economic stimulus plan is driving our new president and Congress to come up with a stimulus package that by all accounts will be heavy on infrastructure spending. While there are arguments about how well and how fast infrastructure spending will work as stimulus, it is the pragmatic choice. Unlike just handing out money, which the right favors in the form of cutting taxes and the left favors in the form of doling out checks, spending on infrastructure employs people in real jobs to build real long-term assets for the country. Besides, those assets are falling apart and need fixing.--Wile E.
