I hear a lot of my friends complaining about the rise in the price of gasoline, but I think that is good! I will explain in this blog.
Most people just look at the growth in our economy as our primary objective or the stock market, but there is a lot more that we need to consider. Like it or not, but we are in competition with most countries around the world. That's right, we are in competition and we need to recognize that fact. As it turns out the USA has more oil and other natural resources than almost any country in the world. That's a fact. When the value of our natural resources goes up it makes the USA wealthier and punishes other countries who do not have these same natural resources. One of the key elements of economics is to increase the distance between the USA and other economies. That means doing things to make our economy go "up" while trying to make other country's economy go "down". Starting to see how it works?
Most countries have to import oil because they do not have any or do not have enough. When the price of oil goes up it does not hurt the USA. It will cause shifts with in our economy, but taken in total it helps our economy and makes us richer. I did not fully understand this simple economic concept until I was working with a group at Stanford University on a business game. My team was well ahead of the other teams in the game when one of my team members stated that we need to shift from just making a profit to "punishing" the other teams. At the time, I did not fully understand this idea. I wanted to keep trying to increase my team's profit. Later, I realized that businesses and countries are in competition and often need to think about how they can "punish" their competitors. When you think about it, it is like a race where you want to win, but also by the greatest margin that you can. See how this idea works?
I know that some people in the USA may be hurt by higher oil prices, but others will make more. Only with some kind of "impossible" "perfect" method can 100% of the people all come out ahead in any economic system. If you have been reading my prior blogs then you know that there are no "perfect" solutions that satisfy 100% of the voters. When you hear some politician claiming that they have a "perfect" solution of some kind, you know that they are incompetent.
Higher oil prices are good for the USA and bad for those who have to import oil!
Most people just look at the growth in our economy as our primary objective or the stock market, but there is a lot more that we need to consider. Like it or not, but we are in competition with most countries around the world. That's right, we are in competition and we need to recognize that fact. As it turns out the USA has more oil and other natural resources than almost any country in the world. That's a fact. When the value of our natural resources goes up it makes the USA wealthier and punishes other countries who do not have these same natural resources. One of the key elements of economics is to increase the distance between the USA and other economies. That means doing things to make our economy go "up" while trying to make other country's economy go "down". Starting to see how it works?
Most countries have to import oil because they do not have any or do not have enough. When the price of oil goes up it does not hurt the USA. It will cause shifts with in our economy, but taken in total it helps our economy and makes us richer. I did not fully understand this simple economic concept until I was working with a group at Stanford University on a business game. My team was well ahead of the other teams in the game when one of my team members stated that we need to shift from just making a profit to "punishing" the other teams. At the time, I did not fully understand this idea. I wanted to keep trying to increase my team's profit. Later, I realized that businesses and countries are in competition and often need to think about how they can "punish" their competitors. When you think about it, it is like a race where you want to win, but also by the greatest margin that you can. See how this idea works?
I know that some people in the USA may be hurt by higher oil prices, but others will make more. Only with some kind of "impossible" "perfect" method can 100% of the people all come out ahead in any economic system. If you have been reading my prior blogs then you know that there are no "perfect" solutions that satisfy 100% of the voters. When you hear some politician claiming that they have a "perfect" solution of some kind, you know that they are incompetent.
Higher oil prices are good for the USA and bad for those who have to import oil!
