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79 comments on A Touch of Stagflation?

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ericy on October 6, 2005 - 9:21pm Permalink | Subthread | Comments top

Given how incredibly wasteful our economy is regarding energy, I have a hard time believing that decreasing energy usage implies a contracting economy.  Eventually you would reach a point where this might happen, but there is so much fat in our economy that I cannot see this happening for a while.

There would be some economic pain for those whose role in the economy is to support the wasteful use of energy - those people would feel the pain right away.

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mikeB on October 6, 2005 - 9:25pm Permalink | Subthread | Parent | Comments top
Oh. Brilliant trick.

Just pronounce some segments of the economy "fat," then when they go, the economy is not really contracting.

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jhm on October 7, 2005 - 5:18am Permalink | Subthread | Parent | Comments top
The "fat" votes as well, we should remember.
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The Interloafer on October 7, 2005 - 1:10pm Permalink | Subthread | Parent | Comments top
I think there's a small cushion of "fat" that can be trimmed. If a consumer makes three trips in an SUV to run three errands, but can be persuaded by high gasoline prices to accept a little inconvenience and consolidate the three errands into one trip, less energy is used, but the errands still get made (i.e., the consumer-based economy continues to chug along).
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William on October 6, 2005 - 10:16pm Permalink | Subthread | Parent | Comments top
Since the 70's our economy's supposed to have gotten pretty efficient with energy, relatively. This is not to say there are not more gains to be made (cutting that fat, I suppose), but we should be safer than the past.

Is the recent hikeup hitting energy intensive economies (China) hard? It would make sense.

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SqueakyRat on October 8, 2005 - 12:42am Permalink | Subthread | Parent | Comments top
Uhm. If we're already pretty efficient, doesn't that make us more vulnerable to the Extremely Clueless Physicist's scenario, not "safer"? Fat people should do better in famines, no?
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hhieslmair on October 7, 2005 - 12:29am Permalink | Subthread | Parent | Comments top
We are amazingly wasteful regarding energy. In all aspects of our society, energy is so cheap, we don't even consider it - think of the open refrigerators and freezers in supermarkets. Energy efficiency is the cheapest 'source' of energy and can be as low as 3cents/kWhr. I think energy demand is viscous - elastic but slow. It takes time to adjust to a more energy efficient lifestyle. Awareness, new products, and energy effcient technologies have to be developed and deployed. For example, I'd like to buy a Prius, but my present car is 3 years old and fine. It doesn't make financial sense to trade. But my next car in three years will be a hybrid. When natural gas prices go up, watercooler talk will start to center on insulating hot water pipes, changing HVAC air filters, replacing windows with highly insulating windows, making sure the refrigerator coils are dust free.

Fast changes in energy price force consumers to eat the price before any adaptation, reducing other consumption, thus slowing the economy. The more slowly energy costs increase, the more likely we can adapt and still have a good economy.

Henry

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coffee17 on October 7, 2005 - 8:56am Permalink | Subthread | Parent | Comments top
Henry, if you're current car is three years old (we're in the same boat in a one car household with my wife's car being 3 years old), by the time you're ready to buy a new car, you just might be buying an all electric model instead of a gasoline hybrid. So look at the bright side, you might get to leap frog some technology.
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Joseph Somsel on October 7, 2005 - 2:16pm Permalink | Subthread | Parent | Comments top
Wholesale electricity from nuclear power plants in California is 2.8 cents a kW-hr.

Check the CPUC site.

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