Amid all the bad news about banks, 401 (k)s and layoffs, there's one wild card that seems to be very good news, but not many have yet figured out.
Crude oil has slipped dramatically from a high of $147 a barrel last summer to about $37 a barrel now. That has brought a precipitous drop in energy costs globally, has helped the U.S. dollar gain strength and although little noticed, has added money to the economy. One oil analyst says that the oil drops have added about a billion dollars a day in general savings, enough for an entire slew of bank bailouts and auto company buy-outs.
The not-so-good news, of course, is that the reason for the petroleum price decreases is that economies around the world are slowing down. One reason for the big price hikes earlier this year was the unslaked thirst for oil among Asian countries.
But that's changed. Japanese industrial production, for example, fell 8.1 percent in November from October. Japanese exports fell 27 percent in November from that month in 2007. China's growth may drop to 9.3 percent next year compared with 9.7 percent in 2008, according to the International Monetary Fund.
Oil producers such as Middle Eastern and South American nations and Russia are being badly slammed by the price drops and that's dampening demand for U.S. goods.
But in the U.S., cheaper oil means one less major impediment to the economy. Airlines which were cutting flights due to high jet fuel prices just a few months ago are getting a breather although they may suffer since some are cutting their prices for 2009 and may see less revenue flow.
Indirectly, cheaper oil is giving more "umph" to the dollar's buying power and that could help more foreign money flow back into the U.S. in 2009 as the recovery presumably gains legs.
Even so, I haven't seen a really good analysis of what the real imnpact of lower prices will be. In some ways, cheaper energy takes the pressure off car-makers and home builders to stop making guzzlers and off-sized dwellings, which is an unitended bad consequence. But cheap crude is also a hidden, unsung boost in otherwise bad times.