Oil Econ 101 Revisited
By Arnold Kling
If we were talking about bananas, everybody would see immediately the foolishness of seeking banana independence. Nobody would fall for half-baked arguments about our addiction to foreign bananas or our love affair with banana bread. Its obviously uneconomic to grow millions of bananas in this country; it could be done, but doing it would entail much greater costs than buying them from producers in places better suited to their production (that is, places where they can be produced at lower opportunity cost).
Thanks to Don Boudreaux for the pointer.
In Oil Econ 101, I wrote,
The problem with sponsoring terrorism is not that oil revenues are the source of funds. The problem with sponsoring terrorism is that it is grossly immoral.
Whether you are an anti-war liberterian like Higgs or a xenophobe about Islamic radicals like me, the economics always comes out the same: choosing the high-cost energy path is not in the interest of American citizens.
It would be interesting to list all of the causes that sound good to politicians (and presumably to voters) but which frighten me, based on past policy proposals: the family farmer, affordable housing, energy independence…