Cheaper oil should lead to lower food prices. Electricity prices should also fall eventually. All this will mean lower inflation.
What would you rather have? High unemployment and high inflation, as we did in the 1980s? People added them to get the "misery index."
Or a recession that at least comes with consumer price relief?
This is not to minimize the present misery. Economists will tell you that this recession, with its virtual evaporation of lending at almost any interest rate, is in many ways more troubling than what happened in the 1980s.
But falling oil prices have been overplayed as bad news and underplayed as a force that will help get us out of this.
To end-of-the-worlders, cheaper energy heralds deflation - the kind of persistent and widespread price decline that helped make the Great Depression so poisonous. But the gold-backed monetary system that caused 1930s deflation is ancient history.
Or maybe $40 oil is the latest chapter in Big Oil's and OPEC's plot to rule the universe. Now that they've booked huge, record profits for a couple years, the thinking goes, oil barons are conspiring to cut prices so we don't develop alternative energy sources and end our petrol addiction.
But if this crisis has taught us anything, it's that nobody is that clever. No industry thinks further ahead than the next couple of quarters and next year's bonus. Not the mortgage business. Not the energy business.
Plunging crude prices are about supply, demand and not much else.
True, the effect may be the same. Cheap energy could again prompt us to fire up gas-guzzlers and scrap investment in solar and wind power. After the economy recovers, Obama must apply a federal gas tax or national limits on carbon emissions to make sure that doesn't happen.
But for now, cheap oil is a blessing, although not a panacea.
In June, Bloomberg News quoted a Russian tycoon predicting oil would hit $250 a barrel and interviewed a bunch of analysts about what that might mean.
"A disaster for all the oil-importing countries," said one. Food prices would "almost double," said another. "A massive shutdown of companies," said a third.
Let's not discount the present challenges. But let's also be thankful that crippling energy costs and everything that goes with them are one particular disaster we don't have to worry about.
