The Great Showdown: Stimulus vs. Energy

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The global economy has gotten ever so slightly better this year. Hooray! Of course, even a slightly stronger economy means rising oil prices. Brad Plumer tells us what that means:

In 2011, as gas prices have risen, Americans have cut back on fuel consumption by about 1.8 percent. But that’s not nearly enough to offset the price increase: overall gas expenditures still rose 25 percent over the past year, or $102 billion. That essentially wiped out all of the benefits from President Obama’s middle-class tax cut.

….The amount that families are spending on gasoline has leapt dramatically since 2004, as fast-growing countries like China and India nudge up oil prices. In states such as Montana and Mississippi, where even routine trips are long and transit alternatives rare, a whopping 19 percent of median income now goes toward gas.

Stimulus is hard in an energy-constrained world. I confess that the more I think about this, the more I wonder if conventional fiscal/monetary policy has as much traction as we believe. I’m not an energy fundamentalist by any stretch, but the constraints are real. Ordinary stimulus measures still work, and we should be pursuing them more aggressively, but I can’t help but suspect that we’re entering an era where they’re getting less effective all the time.

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Thank you!

We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

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