It has been a long time since I read something that made me this hopeful about the future: Fully 42 percent of seniors say greed and speculation are behind higher gas prices, compared with just 13 percent of adults aged 18 to 29. Young adults are twice as likely as seniors to say economic factors and overseas developments are the primary causes. (
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This could be the Flynn Effect at work. Previous generations just aren't as smart as more recent ones are. Over on Econlog, Arnold Kling has argued a possible reason we have less war today is that, to put it bluntly, people in the past were numbskulls.
Most high school seniors don't even understand supply and demand curves, much less what "speculation" is. Most high school students don't take U.S. History AP/Economics AP and don't read the news, and the sliver of the Venn diagram that represents "doesn't take Economics or US History AP but reads the news" is incredibly thin. It's a joke to think that this is an optimistic finding; what it tells me is that people are way too confident in the competence of randomly sampled high school students. Most likely they selected "speculation and greed" because it sounds the most dramatic and cool.
The dollar did not fall 50% in value the past 5 years as the price of oil doubled. World production more or less plateaued 5 years ago as the world economy grew. The recent decline in the dollar may have added a few % points onto the price, but you are missing the forest for the trees if think the dollar explains most of the movement in oil.
That is an interesting point. It might be that seniors and the young are using two different definitions of speculation and two different definitions of greed.
The young are used to having their cable plans, mobile phone plans, taxes and bank account fees manipulated to maximize the amount they are charged. That oil companies would do the same thing is to be expected.
It is, of course, the financialization of oil that led the price to collapse by 10% last Thursday (and then spike 5% yesterday).
But the overall increase in commodities is due to an attempt to avoid Ben Bernanke's printing press by getting out of dollars and into something, anything else.
"what if [t]hey realize that the supply and demand picture is the way it is because demand for oil keeps rising while its supply cannot keep pace, so it will always keep getting more expensive, so they should stop demanding as energy-intensive a standard of living and buy less… that would be better for THEM, but worse for ‘economic’ indicators…"
Sounds like a more stable and predictable environment that is more conducive to investment and growth. Most economic indicators (e.g. NGDP) are not very good at measuring investment and growth; they're only useful for detecting short-term fluctuations in the business cycle.
Why can't BOTH supply and demand and speculation affect the price? There's nothing in this hyper-financialized unstable economy we have that ISN'T subject to speculation these days?
And as for leading to 'a more stable and predictable environment that is more conducive to investment and growth.' - what if instead, they realize that the supply and demand picture is the way it is because demand for oil keeps rising while its supply cannot keep pace, so it will always keep getting more expensive, so they should stop demanding as energy-intensive a standard of living and buy less... that would be better for THEM, but worse for 'economic' indicators...
The way I read that paragraph is that younger people are more likely to understand that prices are a result of supply and demand, rather than collusion or conspiracy. That's good news, because that segment is (always) where the growth in the population comes from. If understanding of this fundamental aspect of how the economy works becomes more prevalent, there will be less outcry to hobble the market; politicians will feel less pressure to try to "correct" when the market does things they don't like or didn't expect. That would lead to a more stable and predictable environment that is more conducive to investment and growth.
an interpretation more consistent with the cynical-leaning realism of this blog:
young adults are twice as likely to consider it high status to explain price fluctuations in terms an economist would approve of.
most respondents couldnt tell you what economic factors ("supply and demand!") and overseas developments ("china has cars now?") are relevant, nevermind rebut the tenth-best argument a clever ''greedy speculators are manipulating the price!" advocate could come up with.
so, the good news robin is reporting must be that the status of his profession is higher than he thought.
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The very sudden and rapid fluctuations in oil markets are not being driven by very sudden and rapid fluctuatioins in oil consumption.
This could be the Flynn Effect at work. Previous generations just aren't as smart as more recent ones are. Over on Econlog, Arnold Kling has argued a possible reason we have less war today is that, to put it bluntly, people in the past were numbskulls.
Most high school seniors don't even understand supply and demand curves, much less what "speculation" is. Most high school students don't take U.S. History AP/Economics AP and don't read the news, and the sliver of the Venn diagram that represents "doesn't take Economics or US History AP but reads the news" is incredibly thin. It's a joke to think that this is an optimistic finding; what it tells me is that people are way too confident in the competence of randomly sampled high school students. Most likely they selected "speculation and greed" because it sounds the most dramatic and cool.
The dollar did not fall 50% in value the past 5 years as the price of oil doubled. World production more or less plateaued 5 years ago as the world economy grew. The recent decline in the dollar may have added a few % points onto the price, but you are missing the forest for the trees if think the dollar explains most of the movement in oil.
That is an interesting point. It might be that seniors and the young are using two different definitions of speculation and two different definitions of greed.
The young are used to having their cable plans, mobile phone plans, taxes and bank account fees manipulated to maximize the amount they are charged. That oil companies would do the same thing is to be expected.
Did anyone define "speculation" for this study? At what point does the desire to make a profit become "greed"?
It is, of course, the financialization of oil that led the price to collapse by 10% last Thursday (and then spike 5% yesterday).
But the overall increase in commodities is due to an attempt to avoid Ben Bernanke's printing press by getting out of dollars and into something, anything else.
Apparently you don't know how to read the chart of DXY. . .
"what if [t]hey realize that the supply and demand picture is the way it is because demand for oil keeps rising while its supply cannot keep pace, so it will always keep getting more expensive, so they should stop demanding as energy-intensive a standard of living and buy less… that would be better for THEM, but worse for ‘economic’ indicators…"
Sounds like a more stable and predictable environment that is more conducive to investment and growth. Most economic indicators (e.g. NGDP) are not very good at measuring investment and growth; they're only useful for detecting short-term fluctuations in the business cycle.
Why can't BOTH supply and demand and speculation affect the price? There's nothing in this hyper-financialized unstable economy we have that ISN'T subject to speculation these days?
And as for leading to 'a more stable and predictable environment that is more conducive to investment and growth.' - what if instead, they realize that the supply and demand picture is the way it is because demand for oil keeps rising while its supply cannot keep pace, so it will always keep getting more expensive, so they should stop demanding as energy-intensive a standard of living and buy less... that would be better for THEM, but worse for 'economic' indicators...
The way I read that paragraph is that younger people are more likely to understand that prices are a result of supply and demand, rather than collusion or conspiracy. That's good news, because that segment is (always) where the growth in the population comes from. If understanding of this fundamental aspect of how the economy works becomes more prevalent, there will be less outcry to hobble the market; politicians will feel less pressure to try to "correct" when the market does things they don't like or didn't expect. That would lead to a more stable and predictable environment that is more conducive to investment and growth.
Yeah, bullshit. The dollar has increased too much in value if anything. Look at the worldwide oil production numbers over the past 5 years.
Touche, dd. Touche.... or maybe, dd is a previous version of the Robin Hanson comment monitor ems who's gone rogue....
Zero.
an interpretation more consistent with the cynical-leaning realism of this blog:
young adults are twice as likely to consider it high status to explain price fluctuations in terms an economist would approve of.
most respondents couldnt tell you what economic factors ("supply and demand!") and overseas developments ("china has cars now?") are relevant, nevermind rebut the tenth-best argument a clever ''greedy speculators are manipulating the price!" advocate could come up with.
so, the good news robin is reporting must be that the status of his profession is higher than he thought.