tom2987

'Demand Destruction' and Gasoline Prices

Well, you mixing 2 different things here that needs to be pointed out. The article you show from last August wasn't about the drop in gasoline demand, it was about the a lower increase of gasoline demand growth, but still increased demand.

The most recent article from Master Card shows true demand destruction. That is, a fall in the demand of a product. A a significant drope of 1.7 over the same period last year.

The kneejerk answer to this has always been "oh yeah, but the Chinese and Indians eat up that decrease". Wrong. For every percentage drop in US demand, China and India's demand would need to increase 3% (5.1% to make up the most recent us demand destruction). That simply isn't happening. This article also doesn't take into account that the EU is now experiencing slowing demand you'll soon see "demand destruction".

Is your agenda showing, or do I have to wipe Indiana off the list of possible colleges for my children? Economics 101.
Subsidies
The drop in subsidies in several asian countries may not seem like such a bif deal, but when you look at the average household income in those nations, it is substantial.