The oilman's oilman T. Boone Pickens has got on TV recently to talk about oil from a new perspective: "The largest transfer of wealth [from the US to the Oil Producers] in the history of mankind."
I like his twist. Of course, it's not a transfer in the economic sense of unilateral remittance, it's a transaction of cash for goods at a (very liquid) market-determined price. However, his point is well taken to the extent that the good is not a durable asset. It is converted into energy.
- A slice of that energy is used to create wealth in the US. This happens when businesses buy the energy and combine it with other resources to produce goods and services more valuable than the price of the raw inputs.
- However, another slice of that energy is simply expended with no economic return. This takes the form of energy waste (rife in our country) and personal consumption such as driving to a friend's house or heating a home. This slice is truly an example of sending US wealth to Edens like Russia, Nigeria, Venezuela, Iran, Iraq, and Saudi Arabia in exchange for short-term convenience and comfort. Once the energy is expended, we have nothing to show for it except empty wallets.
OK, so that's the problem ... here's his solution: http://video.google.com/videoplay?docid=214902169954292574&q=t.+boone+pickens&ei=OOV4SIfuAoTmrQO8qqmCCw
And if you have some time, here's a longer discussion by my favorite interviewer Charlie Rose: http://video.google.com/videoplay?docid=-2542587686318460612&ei=OOV4SIfuAoTmrQO8qqmCCw&hl=en
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