Data: Energy Information Administration; Chart: Axios Visuals

The history of low oil prices juicing the U.S. economy was broken during the pandemic-fueled price collapse, Dallas Fed economists argue in a new commentary.

Why it matters: "[O]n balance this oil price decline has weakened rather than strengthened the U.S. economy, making this event different from past episodes of falling oil prices," they write.

What they found: Normally, low gasoline prices stimulate help the economy because people have more money to spend on other things, while high prices act as drag on growth.

  • But these are not normal times! "Shelter-in-place policies greatly and almost instantaneously reduce the gasoline expenditure share, thereby limiting the direct effect of lower oil prices on domestic consumers," they write.

The big picture: These tragically strange circumstances followed more structural changes over the last decade as U.S. production soared and petroleum imports declined.

  • The growth of the U.S. oil industry means that when it deeply cuts investment, which is happening now, it hits the wider economy.
  • That drag on investment "can be large enough to offset any consumption stimulus" from low prices.
  • Meanwhile, in most other industries, the downward pressure on production costs from low prices is actually quite small.

The bottom line: "In the current environment, the sharp reduction in capital expenditures by oil companies explains why this oil price decline, on balance, actually hurt U.S. investment spending — and hence, economic growth — not only in oil-producing regions, but overall."

Go deeper: EIA forecasts U.S. oil boom will reverse amid coronavirus disruption

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Ben Geman, author of Generate
Aug 10, 2020 - Politics & Policy

Poll: A majority of Pennsylvanians oppose fracking

Photo: Erik McGregor/LightRocket via Getty Images

Fifty-two percent oppose fracking in a CBS News poll of registered voters in Pennsylvania, while 48% favor the oil-and-gas extraction method, a finding within the poll's margin of error.

The big picture: Pennsylvania is a key swing state where natural gas development is a major industry, and President Trump's campaign has sought to turn Joe Biden's energy plans into a political liability.

Trump congratulates QAnon conspiracy theorist on GOP runoff win

Photo: Brendan Smialowski/AFP via Getty Images

President Trump on Wednesday tweeted congratulations to Marjorie Taylor Greene, a vocal QAnon conspiracy theorist who won the Republican nomination in Georgia's deep-red 14th Congressional District runoff.

Why it matters: The president's approval illustrates how the once-fringe conspiracy theory has gained ground within the GOP. Greene is among the at least 11 GOP candidates for Congress who have openly supported or defended the QAnon movement or some of its tenets, per Axios' Jacob Knutson.

Ben Geman, author of Generate
43 mins ago - Politics & Policy

What Kamala Harris means for Biden's climate change plans

Photo illustration: Aïda Amer/Axios. Photo: Joshua Lott/Stringer.

Sen. Kamala Harris' VP selection could heighten the ticket's focus on environmental justice while prompting fresh Trump campaign political attacks on Democrats' energy plans.

Why it matters: Her introduction comes in an election year that has seen more emphasis on climate change than prior cycles. One effect of the movement ignited by the police killing of George Floyd is a new focus on environmental burdens that poor people and communities of color face.