Sometimes a simple thinking exercise will allow an individual to consider the relative merits of an argument without having to toss together a hypothesis and test it empirically. For example, the paragons of the financial world and political adventurers have two basic adages. The first being real-estate is a safe investment as they aren’t making any more of it, and the second being “drill here, drill now” so America can feed the insatiable need for oil.
So, consider the logic of real-estate as a safe investment. Sure, there are perturbations in the market as outside factors effect the amount of money available for purchasing real-estate, and a mobile population moves around depending on economic situations. The reality is that most of the surface of earth is covered by water and in places like Florida (as an example) draining swamps to build homes has been a good bet for developers. The end result is that finite resource investments will tend to drive good returns.
Does further drilling for oil make good investment sense? Realizing that sovereign right to oil and mineral resources has always been a rule and that the oil in the ground is used for more than just fuel restraint might seem logical. Mineral resources belong to all of us, and is portioned out to companies to develop as a service to everyone. Knowing that the oil pumped out belongs to the children of our children as much as it belongs to us. Does “drill here, drill now” make much sense? The first argument is that it is not a finite resource. There is a lot of research that says that is not true. Another argument is that drilling will allow for lower costs at the pump. “Drill here, drill now”, is an argument for a few percentage points of oil in the grand scheme of oil deliveries, that won’t be able to be developed and operational for years.
Why the rush?
If oil is a finite resource just like real estate is a finite resource no matter how much drilling we do the price will simply not go down. Sure we can expect perturbations but the price will always increase. I don’t have any issues with the acquisition of wealth but a political stance of “drill here, drill now” is not much different than a real estate developer using imminent domain laws to pave over our children’s futures. Forcing a development course that utilizes finite resources for near term gains of profit is good for the few and destructive for the many. Greed is never a good decider for national resources. Knowing that a resource is finite and supporting increased utilization of that resource creates a credibility gap in the management of a country.
“Drill here, Drill now” is almost as un-American and stupid as nationalizing bad debt thereby propping up an uber-wealth class removing responsibility for arrogance and ignorance while not insuring oversight and regulation to keep it from happening again. The only thing that would be worse is if constitutional protections are abrogated in the process too. Nobody would be that stupid would they? Credibility is eroded by the small decisions so that when the big ones come along the inconsistencies in good order and logic are much more apparent.