When subsidies and hide-and-forget reach the end

by Andreas Ahlen

Oil at record prices!“No U-turn on Malaysia fuel hike” (BBC), high oil prices rule the G8 meeting, US customers spend less on gas as the gallon price passes US$ 4.00. The whole wide world now seems to realize the global market interconnections that developed the last three decades are affecting us all. If globalization brought us almost only benefits (in cheap products Made in China) nowdays we need to learn that bad consequences are in effect as well. We all appear in the same play, and we all have to face the same problems. Costs of food and energy are on a hike and are going to raise further.

Governments have a sports they call “give them a piece of bread” and “hide-and-forget”. That means they know the real situation and they were updated about it continuously. But they lure their supporters (voters) with subsidies and “lock it up” strategies to make people know that the world is fine (What a wonderful World?) . A behavior applied by almost all governments, despite industrialized nations’ ones, emerging or poor countries.

The most striking signal the whole world realizes that something is not really on the track are news from US that customers struggle with raised food and fuel prices. A matter they never really dealt with. But the United States are also one of the primary indicators of global prosperity, wealthiness and consumption. If 300 Millions are struggling, what about the other industrialized nations and later the emerging and poor countries where price spikes really could lead to social unrest and even chaos?

In a time where petrocompanies report record earnings on oil the real question on the table should be? Is this all fault of GWB and his missteps in Iraq and the Middle-East. Or did he back a more profitable speculation on oil at stock exchanges? In any case speculation is a common habit of mankind not necessarily to charge on the Bush administration. The actual situation is concerning a lot as industrialized nations as well as poor nations have different layers. Starting from the poor,crossing the prosperously and ending up to the rich magnates that rule the global oil business.

Nevertheless people all over the world never waste a thought about the energy crisis predicted 2 decades ago and therefore no efforts were made to increase energy saving and lower environmental impact. Human beings are like human beings are: you will realize it when it is too late (or when your fuel gauge indicates L for a couple of weeks, but you will be really convinced to get gas when your guzzling van stops and the engine turns silent).

We could line up many more factors that would have lead to this situation but I think analysts and opinion makers are more instructed in doing it.

Andreas Ahlen

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Copyright 2008 Andreas Ahlen