Mike, I think the gas shortages you describe are from the damage done to the refineries in the south (Houston area) from the hurricane. However, it under scores the fact that we are very tight on refinery capacity. And why don't the oil companies build more refineries, because the world is tight on oil capacity. And, we are short on energy in general.
The current financial problems have been a long time coming and they point to some severe problems in our economy. We are in debt both as individuals and as a country. We have a lot of money and move it around a lot in schemes to make more money. But, a lot of the apparent wealth was built on selling more to the American consumer than he could actually afford. Our government has built a military force on money borrowed from foreign governments (almost 10 trillion dollars); about one trillion from China. The whole economy the last ten years or so has been built on debt. The stress of the energy crisis is now washing that foundation out from under our feet.
The bailout being planned by Congress to save our financial system, or some of it, is a popular move but it actually adds a trillion dollars to the debt we already have and already can not afford. There is a group of conservative, old school, republicans who are for now trying to stop the insanity. For capitalism to work, it must be able to punish those that do stupid things. In this case, there are a lot of guilty parties to punish and a lot of innocent people in the path of the potential destruction. The bailout attempts to spread the pain to everyone instead of completely wiping out a few institutions and its employees and shareholders, etc. Julie's dad gave us a few thousand dollars about ten years ago in Washington Mutual, a firm near bankruptcy that the Feds allowed to be swallowed up by Bank of America without the usual review process. What happens to our money, I don't know. Multiply that by hundreds of thousands of people equals a lot of pain.
Constellation Energy, where my friend Al works, just got bought up by Warren Buffett for almost nothing. Why, they got caught in a credit crunch. They didn't have enough money to run their business on a day to day basis because they could not borrow cash from banks paralyzed with fear. Warren Buffett believes they are a fundamentally sound company who just did not manage their cash well, and/or depended on too much on one bank, who through no fault of Constellation, was in trouble.
Hey, the housing market is what made the mountain crumble, but it is just a part, a big part, of debt our country could not afford. We are under the illusion that we are a rich nation, richer than we actually are. Until that fundamental illusion is shattered the problem can not be fixed. We can not afford the path we are on. Another example, we can not afford our military and/or Iraq. We can afford SUV's, and driving all over the place at a whim. We can afford our big houses and big heating bills, etc. Our illusion of us having great wealth is shared, up to now, by the world. And, we still have a lot of wealth, just not as much as we think we have, hence debt.
How do I think it will come out. Well, I think it has to get worse before we wake up and get rid of the illusions. The private sector is already making adjustments as fast as it can with the resources it has. Hundreds of billions are being spent in Texas on wind farms. Investment in solar power companies is through the roof. Car companies are scrambling to apply and develop technology to improve gas mileage and convert to electric cars. Applications for nuclear power plants are off the chart, 15 applications are currently under review, ten times that many wait in the background. Research on making ethanol from grasses and other feedstock less valuable than corn are being developed. Private industry can not address other issues like mass transit on its own, that needs some government direction. It can not address our screwed up medical system on its own, that requires some government recognition of the the problem and some rule changes.
The only sector that is not on board to address energy and debt problems is the federal government and most state governments. Their general plan at the moment is to give more money back to the consumer / taxpayers, tax business more (the same ones we need to solve the energy and other problems), and spend money like there is no consequences of spending money they don't have. Both Republicans and Democrats are guilty and sadly, they may reflect the will of the people who share the mass delusion of great and inexhaustible wealth.
The delusion has to die before we can allocate our resources better to solve social, energy, and infrastructure challenges in our country. We are still rich enough and resourceful enough to pull ourselves out of the quagmire, as quantified by our debt, but we have to get rid of the delusion first. We need a Perot-like person on the scene. Ron Paul is the closest one I've found to the positions expressed above, and more that I hold, but he is not wise enough to keep his more radical views to himself and concentrate on what can be done, instead of what the ultimate solution would be in his mind. ( I think I am going to put this in my blog, with your questions as lead in. Too much good stuff to waste it.)
Thanks, I needed that .... I love to write my thoughts down ...
Dad
