Oil crisis: deja vu by any other name?

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EnumaElish

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If this issue is covered under an existing thread please so direct me kindly. Otherwise, I'd like to hear about people's thinking on whether the current upward trend in oil prices will start acting as a brake on the economy, and even throw us back to the oil crisis days of the '70s.

To have a "crisis" we don't need lines at gas stations; lines were there because of the price controls. But, rationing will happen one way or the other -- if it's not government rationing, then the "market" will ration everybody's gas usage, depending on the import of gas relative to other consumption items.

I believe that is already happening to some extent -- a newer cab I've recently come across was an economy model. The cabbie said it was because it saved on gas.

My question is whether people see this this as a short-term bump (because of the war, China filling up its oil reserves, etc.), or they see it as the beginning of a long-term adjustment which can result in an economic slowdown, maybe another recession, even a recession with inflation.

A recent http://www.ftc.gov/opa/2005/07/gaspricefactor.htm [Broken] by the U.S. Federal Trade Commission (FTC) has this careful wording (with added color):
FTC report entitled “Gasoline Price Changes: The Dynamic of Supply said:
For most of the past 20 years, real average retail gasoline prices in the United States, including taxes, have been at their lowest levels since 1919, with U.S. refiners adopting more efficient technologies and business strategies that have allowed them to produce more refined product for each barrel of crude they process. And despite a somewhat different trend in the last few years – with the average U.S. retail price for a gallon of gasoline increasing from $1.56 in 2003 to $2.04 in the first five months of 2005 – it is difficult, if not impossible, to predict whether this sharper rate of increase represents the beginning of a longer-term trend.
 
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I have thought about this for the last few days. And I'm convinced I have hunkered down for the long haul. My area still has massive layoffs and higher then average unemployment. We have engineers competing with high school kids for jobs at McDonalds.
I have been in a regional recession for at least 2 years. People here are just not spending for things they don't half to have. And like in the early 80's many small shops are closing.
Gas prices, geesh :yuck: I know my gas guzzling cars will remain parked. They have cut the bus lines quite a bit, which will be a hardship for those who depend on mass transit.
Echos of the past? You bet ya.
 

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