Spread the word.

In this clip Matt Simmons laments that there hasn’t been a greater public policy response to high oil prices.

It is remarkable. Think back just a few years, before hurricane Katrina. If someone had told you that oil would soon be selling at $140/barrel, and gas at $4/gallon, you probably would have surmised that such a price shock would really shake things up.
Indeed, the price spike has brought dramatic changes: people are driving less, SUV sales have plunged, airlines are going bankrupt.
But what about in Washington, and in state and local governments? Are we seeing a dramatic sea change in energy policy? I’m afraid not. Yes, there’s talk of drilling and more talk of alternative energy. But we need more urgent and comprehensive action.
We need to be dramatically expanding our public transportation system. We need to be making huge investments in electrified rail. We need to be rethinking the way our entire cities are designed.
What will it take to instill in our elected leaders a sufficient sense of urgency to act? $160/barrel oil? $180? $200? Whatever it is, it will come too late.

Accelerated depreciation?

It’s not just the American dollar that’s losing value. A government agency has decided that an American life isn’t worth what it used to be.
The “value of a statistical life” is $6.9 million in today’s dollars, the Environmental Protection Agency reckoned in May – a drop of nearly $1 million from just five years ago.
. . .
When drawing up regulations, government agencies put a value on human life and then weigh the costs versus the lifesaving benefits of a proposed rule. The less a life is worth to the government, the less the need for a regulation, such as tighter restrictions on pollution.
Consider, for example, a hypothetical regulation that costs $18 billion to enforce but will prevent 2,500 deaths. At $7.8 million per person (the old figure), the lifesaving benefits outweigh the costs. But at $6.9 million per person, the rule costs more than the lives it saves, so it may not be adopted.
. . .
The EPA made the changes in two steps. First, in 2004, the agency cut the estimated value of a life by 8 percent. Then, in a rule governing train and boat air pollution this May, the agency took away the normal adjustment for one year’s inflation. Between the two changes, the value of a life fell 11 percent, based on today’s dollar.

I guess this is an argument against claims that we are experiencing hyperinflation.

Yesterday (emphasis added):

Mortgage financiers Fannie Mae and Freddie Mac are adequately capitalized and continue to be active in the mortgage market, said James Lockhart, director of the Office of Federal Housing Enterprise, which regulates the two enterprises.
“Both of these companies are adequately capitalized, which is our highest criteria,” Lockhart said in an interview with CNBC. “They have been very active in the mortgage market, and they are continuing to be. And, in fact, Congress has put on them the requirement to do jumbo mortgages and they have been doing those as well.”

This comment was a desperate effort to reassure nervous investors about the financial health of these companies. How successful has it been thus far? Not very. You can only lie your way out of a bad balance sheet for so long:

Shares of Fannie Mae and Freddie Mac tumbled Wednesday amid continuing fears the mortgage finance companies will be forced to sell more new shares than anticipated to compensate for losses from the housing slump.
. . .
Freddie Mac shares fell $3.20, or 23.8 percent, to $10.26 Wednesday after earlier sinking to a 16-year low of $9.88. Shares of Fannie Mae fell $2.31, or 13.1 percent, to $15.31.
. . .
Investors are finally realizing that the housing market’s troubles are not confined to subprime loans made to borrowers with poor credit and will increasingly affect loans bought or guaranteed by Fannie and Freddie, said Joshua Rosner, managing director of research firm Graham, Fisher & Co.

I wonder what too them so long?
Fortune ponders the doomsday scenario of Fannie Mae and/or Freddie Mac folding. I smell a massive, taxpayer-funded rescue in the air.
Elsewhere, Nouriel Roubini appeared on CNBC this morning and predicted that the credit crisis will get worse, with losses surpassing $1 trillion. Watch the video.

Texas oil mogul T. Boone Pickens has unleashed a public relations campaign promoting his plan to reduce U.S. oil consumption.

In short, Pickens proposes a large-scale increase in the production of wind power in the great plains. This would free up the natural gas, currently used to produce electricity, for transportation use. According to Pickens, this resource allocation shift could reduce America’s oil importation by 38% in a decade.
It’s notable that an oilman is explicitly acknowledging that more oil drilling will not be enough to stave off the developing energy crisis. Although self-interest may be at play with Pickens’ proposal, it rightly advocates a massive expansion in alternative energy generation. I hope the publicity for this plan will help more people see the need for immediate action.