$4 Gasoline at the Aspen Ideas Festival

Once a year there is a remarkable gathering of people in Aspen from all disciplines in life and an occasional interloper. Leaders in Academia, Politics, Business, the Arts, and Science. The conversations, seminars, and lectures are pretty heady in a rarefied yet pointed and pragmatic way. It was here that I had the occasion to watch Charlie Rose interview a remarkable individual, the Chairman and CEO of JP Morgan Chase, Jamie Dimon. The interview will be televised so you will have a chance to drink it in its full flavor. It was remarkable, especially at this moment touching on so many issues impacting all of us from the rescue of Bear Stearns to ruminations on the current mortgage financing debacle.

Of course energy came up as an issue of paramount importance. Much concern expressed about the high price of oil and its impact on the economy. It was during this segment when Dimon in his engaging way asked this star spangled audience a seemingly innocuous question: "Who among you is upset with $4 plus gasoline?" -- not exactly a usual topic of conversation among this prominent gathering. Well, most hands went up. Dimon looked around the room with a degree of satisfaction. Hesitating for a moment he then with a twinkle in his eye pronounced (and I paraphrase), "Well you shouldn't be" [pause], "because its your fault, as it is the fault of every one of us. We knew 40 years ago that something needed to be done and yet we were too self-satisfied to make the hard choices, and now we are paying for our years of self-indulgence, for our years of tolerating inaction." This was not a group that is readily rendered mute, but there was a hushed silence and then spontaneously loud applause. So there we have it. There are many villains in this energy drama, but here for once was the chief perpetrator called to task. Accepting our own responsibility is the first real step to truly dealing with this issue, and never before have I seen it expressed so clearly and responded to with was such clarity of purpose.

An aside: It's good to be an interloper once in awhile.

Comments

[jsarets]

I'm not upset about $144 oil. I live less than 3 miles from the leading-edge sustainable architectural engineering design firm where I work, which is turning away all but the most innovative and distinctive projects. We couldn't possibly grow fast enough to handle any significant fraction of the exploding local demand for green building retrofits.

Moving from a cheap energy economy to an scarce energy economy is simply a matter of out with the old, in with the new. It will be disruptive. There will be winners and losers. It would have been so much better for everybody if the government had been intervening for the past couple decades to smooth out the transition. Anybody who didn't see this coming was in denial.

Markets just chug along until there's some huge bubble or correction. The price changes in the blink of an eye, and the industries affected by these prices can't transition or ramp anywhere near as quickly as prices can shift on the market.

The prices are now such that we should be in a green technology boom, but the green industries are still in their early adolescence because the prices weren't where they needed to be until just recently. The private sector can't efficiently satisfy demand given the volatility of the free market. There, I said it.

[worldsforgottenboy]

Speculation aside, this oil price crisis is strongly influenced by more efficient use of oil in recent years, much more so than US gas-guzzling. OPEC has always tried to get the highest price possible, without crippling the world economy and harming demand. This they did with variable success from 1973, and for a long time the US economy was the dominant factor on the demand side.

Unlike earlier price cycles, the global demand/supply relationship is now driven by countries where oil is used more sparingly than in the US, so the price can run much higher before the demand falls. The more economic value the consumers create from each barrel, the more they can be forced to pay.

Therefore, better fuel efficiency is NOT a solution in a supplier-manipulated commodity market such as oil. We (the consumers) have to either build our own capacity to fight for control of the pricing, or stop using oil altogether.

[1stThron]

Great point!

[Snoop2]

Here we go again with the whiny Europeons.. Boo hoo hoo I pay 10 trillion dollars for an ounce of petrol! The fact is most people in Europe do not travel long distances in cars. They typically use mass transportation to get to work, shopping etc.. So if we here in America had better mass transportation we would use it as well. But please you guys and girls across the pond quit crying, after all you wouldn't be around to buy petrol if we hadn't saved your butts in WW2 !

[gala1]

"Accepting our own responsibility is the first real step to truly dealing with this issue, and never before have I seen it expressed so clearly and responded to with was such clarity of purpose"

Where was i just reading this statement?
Oh, right. A history of the French Revolution where the very same aristocrats whose heads were to be found in baskets for the next decade, were all applauding each other for being so open-mind. They were the first to go.
Wow. So they've admitted there is a problem. Big woo.
i could have met them at the gas station on my corner and told them that.

But until profiteering in essential commodities like oil and grain in wartime is outlawed as it always was before the Bush administration saw it as a profit opportunity for the Friends Cheney, it will be going up to points even more cannibalistic than they are now.

It would be more interesting if you would write about when this is a crisis that will be acknowledged in some functional way that makes a difference to the consumer . Not more comfort to the stockholders.


I wish you'd start writing about nationalizing and rationing oil. It's not if any more . It's when.
What do you think is going to happen next winter when it will cost most of New England $100 PER Day to keep their houses warm. I was that were an exaggeration but it's not.


-gala1

[JBS]

Always good to blame the victim. They usually can't fight back.

[MyTake]

It would be more responsible had this person asked who in the audience is buying hydrogen fuel cell pollution free vehicles!

[haleywins]

Dimon has a lot of nerve. His people, corporations, pay lobbyists millions to shut out the voice of the voters.

[MarkInEugene]

I have been writing letters to my representatives since I was 21 years old and none of our leaders have responded to my pleas to wean this country off this accursed fuel. After 31 years of doing this and attending protests etc, finally my view doesn"t look so extreme.

So it pains and disgusts me to hear Mr. Dimon"s comments. Don't our leaders have a responsibility to use our tax dollars to study these issues and prevent problems. Dick Cheney, George Bush, Mitch McConnell etc had the power to really make a difference, but they did nothing. Corporate Lobbyists paid for by profit seeking CEO's are working against the interests of people. Where is their responsibility?

When nothing happens and nothing changes over decades and people like Mr. Dimon make these statements, the people get militant. When the people get militant and start burning SUV's and posh new home developments, they"re considered terrorists. What brings them to this level of frustration is this dichotomy where CEO's say it's their fault and yet they know in their hearts that they've tried everything in their power.

I"m certainly not justifying this kind of behavior; I"m merely saying it"s not as simple as Mr. Dimon is making it out to be. The Washington establishments does not represent the people or the welfare of the entire nation.

[ragged]

I think what Mr. Dimon was saying is that it's the fault of the people at the Aspen Conference. I agree with that.

[outnow]

Why would the "Energy Group" want the Enron Loophole for oil futures and options? Answer: to better profit off the speculation, escape transparency and oversight, and to eliminate US jurisdiction of the trading. Investment bankers are part of the problem.

I have seen the global warming crisis and oil shortage and price manipulation coming for a long time. I have attempted to vote for representatives who will "fix" the problem. The representative in the 50th Congressional District is Brain Bilbray, who has taken some $150,00 from oil companies to lobby for laws permitting oil drilling in La Jolla Cove. Electing Representatives like Nick Liebham who opposes drilling and loopholes would help. It takes time and money to elect people who will represent "us" and not "them."

It is high time to send Wall Street a message from Main Street: "We ain't going to take it anymore." The predatory bankers and other business people have a vested interest in maintaining the status quo in energy. When you food and gas go up and your home goes down in value, what do you call that?

It is my opinion that the investment bankers are speculating in oil to replenish the asset side of their books after the subprime fiasco. In effect, the speculation is a bailout. It is the next bubble. Already derivatives are being made out of thin air.

[booker52]

Oh really it's my fault?? I cry bullshit. I didn't invade the middle east and I damn sure don't play the stockmarket. So pull the other leg while you are at it. I also don't built the cars folks drive. So again tell me why I drove up the price of a barrel of oil???

[swift goat pet for truth]

I do not believe you were in that room at Aspen, either.

[armadillious2002]

"Buy SUV's" "Give tax incentives to those who buy SUV's' "If Jesus were alive today he would drive an SUV"

I knew all this was BS and I'm certainly not the sharpest pencil in the drawer. The blame lies with those who told us the above lies and those dumb enough to believe them.

[sculptor]

It's not "our" fault. It's not my fault or the fault of people like me because we understand the basics of situation and have so for quite some. We advocate for change but nobody ever listens... It's not the fault of Joe Six-pack with his monster truck loaded to the brim with ATVs and towing a gas chugging speed boat. It's the fault of those that have the bully pulpit and fail to us it. It the fault of our educational system that (failing at the three Rs) can't seem to add a fourth one for Reason so Joe can also get it. Ninety nine percent of our problem as a nation is that ninety nine percent of us don't understand what the problems are!

[francoise]

sculptor,

I have been in America, and I never witnessed anyone being forced to buy and drive a truck. If you are, perhaps you should call the cops for help.

Usually, I'm looked down as a piece of cr*p in my small Avis car, because I always choose the smallest type. Which, by the way, is a lot bigger than my own french car. But then I've been paying $ 9 or 10 a gallon for a long time, as all Europeans have.

However I hope that the oil barrel will soon be $ 200, or more. Because the Joe Six-pack you're writing about isn't willing to get more cultured, and enjoy indulging in ignorance in front of Faux News. So his wallet has to lead him on the path to economy and ecology.

Moreover it might be the end of the cheap China crap ruining us Westerners. If carrying stuff across oceans becomes more expensive, we'll manufacture it closer to us. In our countries, or in neighboring countries.

[Mogamboguru]

As of today, the gallon of premium gas in Germany costs 9,73 Dollars on the average - and we still live and prosper.

Reasons?

a. Substantial affordable public transportation systems are assisting the people in their daily commuting.

b. The german fleet of cars makes 43 mpg on average, while the US-fleet of cars makes 27 mpg, only

(Remember: Germany is the country of premium-car-makers Porsche, Audi, Mecedes and BMW, and is the only country IN THE WORLD to feature no general speed limit on their public motorways. If a Ferrari-owner wanted to go 200 mph on an early Sunday morning ride on german wotorways - he could do so and was welcome! So obviously, we must know what we are talking about - and must be doing something quite right, too - to achieve this high average mileage from our cars under these circumstances.)

Both measures are not out-of-this-world-proposals, which were simply not applicable in the USA - but are measures which might well be installed in the USA over the next decade - if there was the political will to have them installed.

[hey0there]

Wow what a penetrating insight from Dimon.
Get ready to hear this parrotted absolutely everywhere now, anything to keep any action from being taken on any front with distracting chatter and noise.

It's just all our fault. Just accept it! Once everyone accepts this fact, well then, the next step has to be mass acceptance of $4.06+ gas and mind numb record profits for the companies that sell it to us.
They have nothing to do with it, they are just innocent in all this. Take your punishment like a Man, America

[swift goat pet for truth]

Not really.

As a banker, although the richest are his most valued customers, without the middle class, his business is in trouble.

And, right now, his business is in trouble.