Breaking from Moneynews.com President Barack Obama may want to curb the country's dependency on foreign oil, but his plans to do so are not only ill-fated but are also nothing new, and in reality, only a recession can do the trick, says Jeffrey Rubin, former chief economist at CIBC World Markets. Obama says the U.S. should explore for more oil at home and drive more efficient cars. Every president over the last four decades has said the same, but the U.S. still imports more than 50 percent of the 19 million barrels of oil burned every day, Rubin writes in the Huffington Post. "In many ways, Obama's plan is reminiscent of his predecessors by supporting more government subsidies for energy alternatives such as nuclear and bio fuels," Rubin writes. Support for nuclear energy may be tough in wake of the Japanese Fukushima disaster, while ethanol production has pumped up food and fertilizer prices. "Unfortunately, these initiatives have in one way or another been tried before by previous administrations. And many look less credible than they have in the past." Downturns in economic activity, meanwhile, have curbed oil imports in the past. "So far, recessions have been the only surefire way America has cut back on its fuel consumption and the need for oil imports. But, of course, that is not an option any U.S. president can pursue," says Rubin. U.S. benchmark West Texas Intermediate crude oil jumped above $110 per barrel Thursday for the first time since September 2008, threatening the country's recovery in the process. "The surge in oil prices since the end of last year is already doing significant damage to the economy," says Mark Zandi, chief economist at Moody's Analytics, according to the Associated Press. © Moneynews. All rights reserved.
Rubin: Only Recession Will End Foreign-Oil Addiction
Saturday, 9 April 2011
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