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Although most of the analysis of the economic collapse of 2008 has focussed on the housing bubble and creative financial instruments these were syptoms not causes.  The real estate loans and the financial instruments failed because they were undergirded with implicit assumption of never ending economic growth.  What was missing from the analysis was the undeniable truth that global economic growth requires growth in the supply of crude petroleum.
In mid 2008 the world output of petroluem reached 89 million barrels a day.  When continued economic growth outstripped this supply there were dislocations in the global economy which pulled back the veneer on the irrationally exhuberant view the grow would go on forever causing the global 1%-ers to call their brokers en masse and sell thereby crashing the markets.

Although most of the analysis of the economic collapse of 2008 has focussed on the housing bubble and creative financial instruments these were syptoms not causes.  The real estate loans and the financial instruments failed because they were undergirded with implicit assumption of never ending economic growth.  What was missing from the analysis was the undeniable truth that global economic growth requires growth in the supply of crude petroleum.

In mid 2008 the world output of petroluem reached 89 million barrels a day.  When continued economic growth outstripped this supply there were dislocations in the global economy which pulled back the veneer on the irrationally exhuberant view the grow would go on forever causing the global 1%-ers to call their brokers en masse and sell thereby crashing the markets.

When the markets crashed, global economic activity fell, and petroleum use dropped to around 82-83 million barrels a day.  This meant that supply exceeded demaind and petroleum prices fell.  As the global economy has recovered, petroleum demand has crept back up and is now in the range of 88 million barrels a day.  It's possible that investments in oil drilling capacity have raised the supply capacity to something slighly above 89 million barrels a day.  We'll know the answer in the coming months because when we reach the limit again we will have another economic down cycle.  If you you want to delve further into this analysis, I have treated this issues at length in my weekly blog Common Science on www.chapelboro.com.

So where do the Republicans come in?  As readers of the Daily Kos already know, the Republicans have done everything in their power to slow economic growth.  What they have done is extended the length of this economic recover such that global demand for petroleum still remains slightly below supply capacity.  If the limit is not reached before November President Obama can count on continued slow steady growth which should ease his re-election.  

Had the Republicans allowed his policies to go through we would likely have already had another recession related to petroleum supply limitations.  Since the public is not particulary well-educated on global petroleum supply and demand limits this woud have allowed the Republicans an opportunity to cast President Obama as the architect of the ecomonic decline.  Let's be thankful they were not that savvy.

Please note, however, that we will hit the limit of petroleum supply again during President Obama's second term with the requisite economic dislocations again.  At some point as a society and as a species we are going to have to deal with all of the implications of Peak Oil but this diary is already long enough.

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