Juggling Dynamite

In a nut shell:  OPEC says oil-inventory surplus biggest in at least a decade.
And the smarter new world of renewable energy is only getting started. We sure have been painfully dumb on the uptake here:

“We are like tenant farmers chopping down the fence around our house for fuel when we should be using nature’s inexhaustible sources of energy – sun, wind and tide. I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”

— Thomas Edison to Henry Ford and Harvey Firestone in 1931

Here is a direct video link.

See: Energy hasn’t been this hot since they invented fire.

Renewables are no longer “alternative energy.” Solar power is competitive with fossil electricity in more and more places every year—watch China, India, and Chile in 2016. Global demand for the sun reached a new high this year, and solar is that rare thing that liberals and many free-market conservatives in the U.S. can agree to love. Wind power is cheaper than coal in Germany and the U.K., which may close all its coal plants by 2023.

Which brings us back to oil. Prices may stay low thanks to resilient U.S. output, renewed Iranian exports, and Saudi Arabia’s strategy to sell at whatever price it needs to maintain market share. And there’s a funny thing about oil that you might not have noticed. It doesn’t really compete with the other energy sources. It powers cars, ships, and planes. The others generate electricity.

So the true wild card for oil, beyond any 2016 price whips, is how fast cars start to run on electricity instead of gasoline.

But, but, sell side analysts are so confident things are getting better by the day…

Economic outlook is worse than expected, which may make it tougher for the new Liberal government to meet some campaign promises. Here is a direct video link.

Tom Friedman’s latest NY Times OPED on the US presidential race is worth the time. Nice to see some adult thoughts for a change. See: Voters, You can have everything!:

“Not only do the tax-cutting plans offered by the leading Republican candidates create eye-popping deficits, but some Democratic tax hike proposals don’t quite add up, either. As the Washington Post economics columnist Robert Samuelson reported last week, a Brookings Institution study found that even if the top income tax rate were increased to 50 percent from 39.6 percent, it would cover less than a quarter of the deficit for the 2015 fiscal year, let alone generate funds for increased investment.

If we want to invest now in more infrastructure — as we should do — and make sure we don’t overburden the next generation to pay for all the retiring baby boomers, something will have to give, or as Samuelson put it: “If middle-class Americans need or want bigger government, they will have to pay for it. Sooner or later, a tax increase is coming their way. There is no tooth fairy.”

And finally, with carbon dioxide levels in the atmosphere having just reached heights not seen in millennium, if we want to “manage the unavoidable” effects of climate change and “avoid the unmanageable” ones, it will surely require a price on carbon — soon.

So enjoy the fun of this campaign while it lasts, because the next president will not be governing in poetry or prose or fantasy — but with excruciating trade-offs. The joke is on us.”