This is in response to Vaclav Smil’s A Reality Check on the Pickens Energy Plan.

—

Mr. Smil,

While you take every other issue to task, you miss the opportunity to dispel the ‘transfer of wealth’ myth.

Your readers may appreciate this clip from a Library of Economics and Liberty podcast addressing just this myth:

Don Boudreaux (George Mason University) on Globalization and Trade Deficits

In summary, we send $700b/yr but receive that amount back in oil, so while there is indeed a transfer of wealth, it is bi-directional and no debt is created in the process between the two parties doing the ‘trading.’

Though I suppose, ‘we buy $700b/yr in oil…’ isn’t as sensational as ‘we transfer $700b/yr of our wealth to oil producing nations.’ Oh well.

In any case that podcast is a good listen, enjoy.

(;||<