It's my opinion that some fundamental issues have been glossed over in the ongoing U.S. media discussions of the economic collapse of a year ago. It's hard, however, to get the media's economic analysts to discuss these issues - and the only real way to raise these points is in the comments sections of their opinion columns.
However, every time I try to raise these points on the New York Times website, they are mysteriously blocked. I first considered whether my language was too provocative, too aggressive, or something like that - so I strove to be more and more polite. For example, take Paul Krugman's recent column on Banks and Bubbles.
I submitted the following comment, and just for proof, took a screen shot once the comment was "accepted for moderation" - something I started doing regularly since so many of my comments get blocked, and that's the image above. Here's the entire comment in more readable format:
There are some missing factors in this equation - first of all, there was also a manufactured oil price bubble, wasn't there? That large increase - to $140 a barrel at peak - was largely due to the destabilization of the Middle East, and efforts by traders in London and New York to drive the price through the ceiling.
These large pools of cash were then re-invested in the U.S. housing market - a shift from traditional petrodollar recycling schemes, which historically revolved around arms sales (no this is not the mythical "free market") - and the investments offering the highest rate on return were tied to sub-prime speculation and securitization, correct? At least, that's what the banks and rating agencies claimed.
This lead to a crash when it became clear that the combination of high oil prices and high home debt were wiping out the purchasing power of consumers and leading to massive default on home loans, small business loans and so on - which triggered a panic and a collapse.
The bailout money was then pumped in to rescue the banks - but rather than having strings attached to that large pile of cash, the very institutions that played such a central role in the collapse were given carte blanche. They were not required to refinance home loans or take novel steps like investing in wind and solar, which would have helped get the U.S. off the petrodollar recycling merry-go-round - not that many Wall Street traders wanted to see the oil price drop even lower than $40.
If the banks had been required to make large-scale investments in real renewables and energy efficiency, than the oil price would have fallen even lower than $40 - due to dropping demand. Wind and solar powered grids and electric vehicle initiatives would have had such an effect - but that would also have undermined the bank's investments in coal mines, rail transport and coal-fired utilities.
Thus, rather than invoking the kind of change the American public wants to see (75% polling for renewables would indicate), the politicians allowed the banks to keep playing manipulative games with oil and coal. Banks are still refusing to put money into renewables, and the signals from the political class are that they are going to keep backing the entrenched fossil fuel interests both at home and abroad - and any rational look at the resulting balance-of-payments issues - the outgoing flux of petrodollars due to energy imports - would indicate that the economy is going to keep sliding towards a new collapse.
A new focus on renewable-based energy independence is certainly needed - but with Democrats in the pocket of Big Coal and Republicans in the pocket of Big Oil, how is that going to happen?
It's hard to understand why any censor at the NYT would find this comment to be objectionable based on their comment guidelines. However, I can tell you that multiple comments of this type, that discuss the reliance of the U.S on foreign oil deals and petrodollar recycling, and which point to the backwards behavior of politicians from both parties on energy matters, have been blocked by the NYT comment section people.
I'll see if I can get an explanation - but it's kind of strange that they feel the need to limit the discussion in this manner...
[Addendum] So, curiously enough, a little while after I posted this, the number of comments at the NYT web site jumped from 52 to 122... and there was mine! So maybe it was simply a result of a backlog of comments that the NYT had not yet had a chance to moderate.
Regardless, I'll leave this post up in the hope that Krugman and other economists will start analyzing the role of the oil price bubble in the economic collapse - something that they've completely failed to do.
