Oil Supply & Demand Crossover

There seems to be a disagreement about whether high oil prices are caused by speculators or simple supply and demand. That speculation hasn't driven up other commodities, suggests speculation alone doesn't drive up prices. And there are no reports of hoarding or oversupplies of oil. But there's not so much oil that buyers can withhold buying buying to drive down prices.

It seems possible that we, as a planet, are now consuming exactly as much oil as we are producing. And it's clear that demand is increasing faster than supply. That is, we may be at the point in history where demand is about to surpass our supply. It's not Peak Oil, but it's the Oil Crossover point of supply and demand.

Peak Oil is a useful event to consider, but isn't valid for temporal predictions because it primarily considers supply. The predicted effects of Peak Oil are based on supply _and_ demand, but the predicted occurrence is based solely on supply. This doesn't make any sense at all.

The supply and demand crossover point is a more meaningful point in time. The Oil Crossover is the point in time when the predicted effects of Peak Oil will actually begin. The world doesn't need to have topped out its potential oil supply to experience global shortages. Rapidly increasing demand will do just fine. And, you may have noticed, demand is rising rather rapidly.

The danger is that policy makers are considering the right effects but at the wrong time. Policy makers use optimistic estimates of oil supply as an excuse to delay restraints on demand. Given this global unwillingness to restrain demand even slightly, it should be no surprise if it's rising demand that eventually brings us to the effects of peak oil, rather than shrinking supply. Nor should there be any surprise if we've finally reached the Oil Crossover.

Zero Percent Corporate Income Tax

Governments try to gain favor with companies by giving generous tax credits if they locate an office or factory within their jurisdiction. This is often looked at as unfair because it only goes to big companies. However, the way to fix this is not to stop giving tax credits to some companies, but instead, to lower taxes for all companies... all the way down to zero.

Corporations aren't people and don't hoard money the same way. When corporations get money, they spend it on roughly 3 things: buy more goods and services, expand the business by hiring people and investing, or give money to people as compensation. The first 2 cases are good uses of money that will lead directly to economic growth and shouldn't be taxed.

The third case is when corporate profits become personal income, which is already taxed. The difference is that taxing at the corporate level is regressive, because it taxes all recipients at the same corporate rate, no matter their income. If you wait for the money to become personal income, it can then be taxed on a progressive scale.

In each case, it's better if the company spends its money on something other than corporate income tax.

Fix Lending Standards

One of the problems leading to the current economic disaster was lax standards by lenders. This happened because lenders were able to sell the loans on to uninformed investors. There is a simple fix to this: require lenders to keep a certain percentage of all loans they make. If lenders have to keep between 10 and 25 percent of all loans, it will keep them from knowingly making bad or risky loans with the intent of selling them on.