Left: "We can't drill our way out of this!"
Right: "We can't conserve our way out of this!"
Chorus: "We must innovate our way out of this!"

(Maybe, but how long will that take? What will it cost? Who will pay?)

Democrats: "Big Oil's fault! Confiscate their profits!"
Republicans: "Environmentalists' fault! Drill here, drill now, pay less!"
Chorus: "Speculators' fault! Pass a law!"

(So, investing in things -- stocks, bonds, collector cars, commodities such as oil -- that may, or may not, increase in value in the future should be illegal?)

The price of just about anything is mostly about supply and demand. This is Rule #1 of Economics 101 -- which they made me take, along with English, history and a few other useful things, in engineering school:

1. Demand goes up, supply doesn't: price goes up
2. Demand goes down, supply doesn't: price goes down
3. Supply goes up, demand doesn't: price goes down

Oil will bring whatever buyers are willing to pay and sellers are willing to take, and buyers are willing to pay very dearly these days. Nearly all economic activity runs on oil, and it is extremely difficult for any society to reduce its usage without cheap and plentiful alternatives.

Petroleum products are not just in transportation tanks; they are in almost all consumer products. Take off your jacket, check your watch, dial your phone, boot up your computer, plug in your iPod – these things and nearly everything else contain them as fundamental elements.

Most things consume oil as they are manufactured, and all things consume it as fuel in shipment to market. And so, as we have been learning all too painfully lately, as the price of oil goes up, the price of everything follows in the same direction. So, given that the price of oil depends mostly on supply and demand, what can we do to drag it back down? Reduce demand? Increase supply? Yes, and yes! Anyone who thinks we can make enough difference by working just one end of that equation is wishfully thinking.

Continue reading after the jump.

Scientists challenge today's biggest and most dangerous lie

A few months ago, I was asked to speak to a group of engineers and researchers toiling on high-tech projects under the auspices of USCAR (United States Council for Automotive Research), the umbrella organization for collaborative research among Chrysler, Ford and General Motors. The occasion was an annual luncheon where awards and recognitions are handed out for successes, extraordinary efforts and hard work well done.

Hot news at that time was Toyota's potentially passing GM in global sales...one more major milestone in the woeful declines of General Motors, "Detroit" and industrial America in general. But I noticed no one reporting the pertinent fact that Toyota sells some 2.5 million vehicles a year in its highly protected home market, to GM's next to none. Or that GM handily outsells Toyota nearly everywhere else, including here in the U.S.

Then I saw a cable-news panel of supposedly smart investment advisors attributing Detroit's ongoing woes to inferior quality and fuel economy. These tired, old misperceptions, blithely communicated as facts, provided inspiration for my talk, "Lies and Misperceptions."

Following a brief introduction, I asked the group for a show of hands: "How many believe that import-vehicle quality is better than domestic?" Not one hand went up. "Japanese vs. domestic?" Still none. Good! I cited some proof from J.D. Power and other quality surveys. "Imports deliver better fuel economy than domestics." Still no hands. Excellent! "An 'American' car is one built in America." A scattering of hands. I suggested that an "American" vehicle is one that wears a domestic brand, regardless of assembly location, because it supports U.S.-maker headquarters jobs (not just assembly and sales jobs), and the money it brings stays in this country to support this economy and that American company.

At Witz' End continues after the break.