Economists use this phrase to describe something that has no relevant effect on the situation at hand. Well, I am here to say, the price of tea in China now affects each and every American. The actual tea may not be the issue but China’s consumption of commodities like tea, or more precisely “Texas Tea,” plays a role in the price of just about every product or service we Americans buy. Take, for instance, the cost of lumber used to build a home. Not only do we have to outbid foreign consumers for the lumber itself, the cost of the transportation of the trees to the mill then to the warehouse or store and then to the job site has increased so the consumer is paying even more for the house. SNAP! Alter Ego, “But that’s not true; housing prices have come down.” SNAP! Back to me. Perhaps what has really happened is the sellers are not making as much profit on the houses because it is costing more to build them. This, in turn, leads to construction workers making less, retailers making less, real estate agents making less and all the other service providers from coast to coast making less on the sale of a home. And, let’s face it, our economy is based on the added value of our service, so if commodity prices rise and service prices fall our economy can spiral out of control. Don’t get me wrong. No one should pay more than the market price for a home. But the impact of the price of ”tea” in China has affected the pocketbook of just about every American.
Now, what would I do if I were President Bush? I would commission a study on the environmental impact on drilling in the Arctic National Wildlife Refuge (ANWR). It may cost a few million, but this would spook the oil commodities traders and save Americans billions, perhaps tens of billions, and free up capital that we are spending on gas to spend on homes. On a side note, it would also save the Chinese tens of billions of yuans to produce products for us less expensively all while depriving Hugo Chavez and Mahmoud Ahmadinejad of billions in oil revenue.
The long-term solution is energy independence. But that doesn’t mean we should let billions of dollars go to OPEC, today.
I agree w/ you on the price of oil drives everything but I don't think more drilling is the answer. Oil is a finite resource and the sooner we realize that and prepare ourselves for the end of the oil age, the better off we and our children will be.