And it wasn't just the increase at the pump. The increase in oil prices affected utility bills, airfare, and the cost of goods. Huge domino effect.
Oh believe me, ...I know about the domino effect! I just think the economy would have withstood it. It had to.
What it couldn't withstand, was the motherlode of ARM's hitting at the same time. That triggered even MORE of a domino effect than the increase of fuel.
People were getting squeezed for 3 yrs, ...but the massive "domino effect" on the economy of which you speak was due to the worthless CDO's peddled by wall street. Europeans had been paying $5 - $8 / gallon for years
Mark my words. We're going to see another increase in the price of fuel, that's is going to be sustained.
It
HAS TO rise. It's an inevitability. No matter how you slice it, those costs
ARE going up.
Removing oil from tar sands is an extremely expensive process. Unless those costs are covered, who'll extract it?
If no one extracts it, the end result, no oil. With a scarcity of supply, ...oil prices go up
(and Americans & Iraqi's die). North American oil workers must be paid a living wage. This isn't like lettuce pickers in Arizona, ...oil workers have to have skills. Higher oil prices means a more abundant supply which will over time put a slight downward stabilizing pressure on prices, but the overall pricing structure will raise, and STAY there. There is too much demand for oil in the world, and oil is a requirement to maintain, let alone grow an economy. Even if Americans don't buy the oil, or balk at the price, ...it doesn't matter. They are far too outnumbered by the Chinese and the Indians who need the oil, so the higher prices will be paid.
Per capita, Americans consume more oil than any other country, ...but China & India have more people. For every American that says NO, ...there are at least 20 - 30 Chinese or Indians who say YES. China and India have the world's fastest growing middle class, while the US has the world's fastest shrinking middle class. It's a foregone conclusion.
The world in which we live is increasingly shaped not by decisions made in Washington, ...but by those made in Beijing and New Delhi. You can balk at that as much as you want, ...you can deny it as much as you want, ...but it won't change the facts. The sooner Americans realize that, they can get on with the task of rebuilding their economy, and making the adjustments they need to make in order to survive and thrive in "The Post American World" which btw happens to be a neat book by Fareed Zakaria. (W.W. Norton & Company; 2008) ISBN 0-393-06235-X

He discusses it here with Jon Stewart of The Daily Show
http://watch.thecomedynetwork.ca/the-daily-show-with-jon-stewart/full-episodes/#clip52356