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Is it time to bring back the 55 mile an hour speed limit? Not going to happen, but it’s actually would not be stupid right now. Hi, Paul Krugman. Update on Friday morning where the Strait of Hormuz is still closed, stuff is burning, futures markets are saying that the, you know, pretty sophisticated money thinks that oil prices are going to stay extremely high for a very long time. And we’re starting to hear some talk about things we could do to conserve oil, with the International Energy Agency actually calling for measures to conserve oil, including driving more slowly, working from home, using electric cookers, all things that would be doable. Let’s talk about what the case is, not because it’s going to happen, but because it kind of illustrates where we are right now.

By the way, my coffee cup has never seemed more appropriate.

I remember the 70s. I’ve been around way too long. And I remember the 55 mile an hour speed limit, which even inspired songs about how people hated it. “I can’t drive 55.” It inspired a lot of sectional tension. Bumper stickers in Texas saying, “drive 100 and freeze a Yankee.” And it inspired Jimmy Carter. who famously or infamously gave a speech from the White House wearing a thick sweater calling upon people to conserve energy and called for energy conservation as being something we should do and he called it the moral equivalent of war. He had really bad acronym advisors because that came out as MEOW but not stupid actually maybe politically stupid but economically not stupid.

Where we are right now is that we have essentially a forcible shutoff of a large fraction of the world’s oil supply. Twenty percent of the world’s oil passed through the Strait of Hormuz before this war. Some of that can get out other ways. The Saudis have a pipeline to the Red Sea, which is good for now and until or unless the Houthis start firing missiles at oil tankers in another strait that leads from the Red Sea to the Indian Ocean. The Iranians are still exporting oil. They are letting their own tankers and tankers headed for China pass through, and the United States is not trying to stop them, at least at this point. But still, we’re still looking at something like a 10% reduction in the amount of oil available to the world market.

And the trouble with oil demand in the short run, there’s lots of things you can do to burn less oil in the longer run. In the short run, really the only thing you can do is drive less.

That’s pretty much... Now, the cooking, natural gas, is also a big issue, especially in Europe, so that’s where that would come in. But basically, oil is used primarily for transportation, and it takes time to switch to change your automotive fleet to more fuel-efficient vehicles. It takes time to just generally shift the way that you drive and the way that you work, but you could simply drive less.

Why do that? Econ 101 says that if you want to conserve, and if you want to reduce the amount of something that is consumed, that raising the price is the cleanest, easiest way to do that. That is actually how it’s going to happen. This is all going to happen through high prices of gasoline and diesel and jet fuel. But there are two reasons why a public effort, a public campaign, maybe even rules to induce people to burn less stuff to drive less and so on would make sense.

One is distributional. Rationing gasoline, rationing oil through price is a big hit to consumers and a big windfall profit to oil companies and also to oil exporting countries like Russia. And if you could do less of that, that would be, might not be maximize econo