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As for bankrupting US oil production, sure, that's bad for our oil industry and then they'll naturally raise prices, but again it's just an inconvenience for Joe American when he goes to fill up his car. People weren't going into freakout mode when gas hit highs in 2007 and early 2008 and putting all their money under the mattress.
Speaking of which, what's so harmful about saving money? It's essentially just deferred spending. If a business fails because people don't want those goods or services in the "tough times," then it doesn't seem like it was a viable business. Sorry. Besides, saving money in the bank still helps the banking industry and by extension the companies that need loans. Crucial industries like food will always be supported, but in a recession the department store selling $70 pre-ripped jeans might close. Again, tough. But that means the market wouldn't support that product; maybe they should have made a better product or an altogether different one. Anyway, suppose David gets laid off from the department store. That sucks for David, and now David doesn't have much money, but Joe who didn't spend money on those overpriced jeans leading to David's job loss has more money. Economically speaking, that seems like a wash. And eventually Joe will spend that money on something he considers worthwhile, supporting the goods and services still relevant in the market.
So, where and how does the cascading avalanche of doom cause millions to lose jobs?
My friend flew for a citation for a small oil company and when oil started going down they had to sell their jet. He lost his job.Originally Posted by deltajuliet
Okay, so how does excess oil lead to lost jobs? It probably affects OPEC's bottom line, but Joe American loves the low price at the pump and the associated cheap airfares he can get. Similarly, airlines generally like cheaper oil prices too. So why do you or I or Joe American lose in this scenario? Why do we lose from excess capacity of other products? I can see those particular industries being affected, but it's their own fault for oversaturating the market and the result of simple supply and demand.As for bankrupting US oil production, sure, that's bad for our oil industry and then they'll naturally raise prices, but again it's just an inconvenience for Joe American when he goes to fill up his car. People weren't going into freakout mode when gas hit highs in 2007 and early 2008 and putting all their money under the mattress.
Speaking of which, what's so harmful about saving money? It's essentially just deferred spending. If a business fails because people don't want those goods or services in the "tough times," then it doesn't seem like it was a viable business. Sorry. Besides, saving money in the bank still helps the banking industry and by extension the companies that need loans. Crucial industries like food will always be supported, but in a recession the department store selling $70 pre-ripped jeans might close. Again, tough. But that means the market wouldn't support that product; maybe they should have made a better product or an altogether different one. Anyway, suppose David gets laid off from the department store. That sucks for David, and now David doesn't have much money, but Joe who didn't spend money on those overpriced jeans leading to David's job loss has more money. Economically speaking, that seems like a wash. And eventually Joe will spend that money on something he considers worthwhile, supporting the goods and services still relevant in the market.
So, where and how does the cascading avalanche of doom cause millions to lose jobs?
But for a bigger picture lets look at Houston. Dozens of oil companies have already declared bankruptcy and many more have had to make cut backs. This means job loss and less people moving to Houston and more people leaving to find new work. Well, when this happens property values go down which has a direct impact on ones financial situation. Now since those companies went under the loans defaulted and will affect the bottom lines of the banks. Last report I read for Wells Fargo wasn't pretty. This obviously has an affect on the stock prices or oil and financial and most Joe Americans likely have stock in these sectors being affected. Finally low oil is an indicator that the global economy is slowing.
.02 cents