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I don't think the meltdown had anything to do with the drop in gas prices.
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Gas prices skyrocket. People don't have money to spend on extra goodies because the gas tank is sucking up every extra nickle they've got. Demand for goods and services decline. The economy starts slowing down. People start getting laid off.
750,000 people out of work and not drawing a paycheck to use to buy gas. They don't drive, demand drops. People get worried about their jobs and they quit spending as much and driving as much. Demand drops. People who do drive do their damnedest to switch to high mileage vehicles. Demand drops. People who can't switch to high mileage cars just don't drive if they can help it. Demand drops more. Demand drops, prices drop.
People stop looking to buy houses in the suburbs because the price of gas makes it too expensive to commute. Housing prices in the burbs starts falling. As gas prices go up, decreases in home prices accelerate. Suddenly folks in the burbs owe more than their homes are worth, can't sell them for enough to cover the principle of their loan(s) and... the sub-prime mortgage thing blows sky high.
Big oil futures speculators like Lehman Bros, AIG and others go bust and that was a big chunk of change out of the oil pricing loop. Oil prices already sliding and the Dow drops 34%. Investors freak out. Whatever speculators have money left, they cut and run and hide it away in T bills. Oil goes from $147 a barrel to $64 a barrel. Why? Because of the meltdown. It's a straight line cause and effect. No thought required.
And Exxon STILL made record profits last quarter!
I still argue that the insanely high prices of oil slowed down the economy and helped light the fuse on the bomb that blew everything up in the first place. And the Bush administration's refusal to do anything at all about skyrocketing fuel prices is what aided and abetted the process. So, your original point is made. The falling oil prices are credited to Bush/Cheney.
Thank you GW and Dick
