Bloomberg News's Caroline Baum has a contrarian column about the effect of rising oil prices on the American economy:
Higher oil prices are always viewed as a negative because they crimp consumer purchasing power.
It's not a one way street. Wealth is transferred from consumers to producers and recycled.
Higher prices act as an incentive for oil exploration. Exxon Mobil Corp. buys new drilling equipment and hires more workers. Those dollars go back into the economy, they don't suck life out of it.
Because the U.S. imports about half of its crude oil, according to the U.S. Department of Energy, some of those profits end up in the pockets of the Saudi royal family and other Middle East potentates.
What do they do with them? They spend them on U.S. goods and services. They buy U.S. stocks, bonds, trophy real estate and F-16 fighter jets.
This doesn't happen simultaneously, of course. But to portray every dollar of oil profit as a net drain on the economy is inaccurate.