I must admit that I'm continually amazed these days about how easily the oil price increases and the development of renewable energy are labelled as "bubbles." After years during which the blatant real estate bubble was ignored by all "serious" commentators (and after an earlier decade when the reality of the dotcom bubble was similarly denied until the crash had happened), they now find it extraordinarily to use that label freely for any inconvenient price evolution.
But, of course, it is easy to understand. It is so much more comfortable to paint the ever-higher oil prices, and the development of still thoroughly hippie-tainted wind power as temporary aberrations or meaningless bursts of irrational exuberance rather than as persistent realities, because that would mean that the comfortable assumptions that underpin today's economic model have to be questioned. Perpetual growth, the deification of the quick buck based on blissful ignorance of externalities, and individual freedom have to give way to long term planning, intrusive regulation of pollution and emissions, policies to reduce demand and care for the commons.
And that cannot be promoted, can it? Thus, it's a bubble.
Forbes warns of oil bubble
August 31, 2005
PUBLISHING billionaire Steve Forbes has predicted that soaring oil prices will lead to a crash that could make the hi-tech bust of 2000 "look like a picnic".
Mr Forbes, publisher of Forbes magazine, said the price of oil, which peaked at more than $US70 a barrel on Monday as Hurricane Katrina headed for the US Gulf Coast, was unsustainable.
Is There An Oil 'Bubble'?
By Robert J. Samuelson
Wednesday, July 26, 2006
Could there be an oil "bubble''? Well, yes. [to be fair, the rest of that article explains that, in fact, not really]
Market Bubbles, Recession or Economic Rebound?
Economy, Housing, Energy & Credit Market Outlooks from Greenspan, Rogoff & Shiller at CERAWeek 2008
CAMBRIDGE, Mass. (Jan. 30, 2008) – Three of the world’s preeminent economists will dissect the causes and effects of volatility and instability in the global economy and in credit, housing and oil markets, and the resulting outlook for business, consumers and financial markets at the coming Cambridge Energy Research Associates CERAWeek 2008 conference, beginning February 12 at the Westin Galleria Hotel in Houston.
Beware of a 'green' bubble
Investors have driven up the prices of environmentally friendly stocks, perhaps to unrealistic levels. A better bet might be multinationals that are taking on a greener tint.
In the effort to help the world's environment, investors are finding that it's easy being green. Maybe too easy.
The next bubble: Priming the markets for tomorrow's big crash
There are a number of plausible candidates for the next bubble, but only a few meet all the criteria. (...)
There is one industry that fits the bill: alternative energy, the development of more energy-efficient products, along with viable alternatives to oil, including wind, solar, and geothermal power, along with the use of nuclear energy to produce sustainable oil substitutes, such as liquefied hydrogen from water. Indeed, the next bubble is already being branded.
This is not incompetence - this is wilful sabotage of any chance for decent economic and energy policies.