Oil prices

[venture]

You know what? I don't want the rest of the country to catch up. We dealt with decades when gas was $1.00 a gallon and the rest of the country had booming growth. We need time to catch up. We aren't diversified enough. High energy prices result directly in job growth and prosperity in Oklahoma.

I completely get where you are coming from and don't really disagree with the general principle behind it. How much time does it take for us to catch up? How can we possibly diversify when you have a tax structure that is so slanted towards O&G with incentives that other industries aren't likely to get the same treatment? We all want diversification, but then we throw billions at O&G in tax breaks that we remain dependent on them.

There will be a time when oil crashes...is this it? I'm not sure. If anything this should be a warning shot to wake us up to make sure we are doing more. I am excited for the opportunities that OKC has had from this boom, but I hate seeing a large portion of the country brought down because of it. There has to be a happy balance and perhaps with this adjustment in prices we are finally going to get there.

[s00nr1]

I completely get where you are coming from and don't really disagree with the general principle behind it. How much time does it take for us to catch up? How can we possibly diversify when you have a tax structure that is so slanted towards O&G with incentives that other industries aren't likely to get the same treatment? We all want diversification, but then we throw billions at O&G in tax breaks that we remain dependent on them.

I must respectfully object to this argument. You have to take into consideration the tax incentives are in place as a result of a commodity that is plentiful in this state, just as subsidies are in place for farming, as well as the generous aerospace engineer tax credits that have subsequently led to an influx of aerospace employment in OKC. The "tax structure" has little to do with market diversification (as can be seen in Texas where O&G receives a similar subsidy as OK, yet economic expansion is quite diverse). The main route to economic diversification is strengthening the education base and quality of life, both of which have been positively impacted by the state's oil and gas production over the past decade. The business climate as a whole in Oklahoma is more friendly than the majority of states in the U.S.

There will be a time when oil crashes...is this it? I'm not sure. If anything this should be a warning shot to wake us up to make sure we are doing more. I am excited for the opportunities that OKC has had from this boom, but I hate seeing a large portion of the country brought down because of it. There has to be a happy balance and perhaps with this adjustment in prices we are finally going to get there.

If, by "large portion of the country," you are referring to the airline industry, then yes. However, as can be seen in the data in my earlier post, economic consumption/output has overall taken the increase in input costs in stride (mainly via improvements in productivity/efficiency). What goes for the airline industry does not go for all.