What caused the recession? To find the solution we need to know the source of the problem

The increase in oil prices that preceded the current recession, even in inflation-adjusted terms, was more than twice as large as the OPEC shocks.

It's not just the money that it takes out of Western consumers, although that is pretty staggering in its own right. Between 2005 and 2007, soaring oil prices transferred roughly a trillion dollars from consumers' wallets throughout the OECD to OPEC producers. And when gasoline prices were $4 per gallon last Memorial Day weekend (or as much as $1.50 per litre in Canada), many North American households found themselves paying more to fill their gas tanks than feed their families.

If the recession is really about triple-digit oil prices, then the recovery is going to be a lot more challenging.

SHOOT: To summarise, you can't bail-out an energy problem. You can't bail-out the fact that less oil is being produced. It's an unsolvable. All you can do is reduce your consumption, reduce your users, grow less, decline, contract. Nobody wants to talk about that.

clipped from www.theglobeandmail.com If indeed oil, and not subprime mortgages, lies at the heart of our current economic malaise, we may be sicker than we know Knowing the nature of a disease is usually a precondition for finding a cure. Similarly, identifying the cause of a recession goes a long way in defining what type of recovery is likely to follow. Conventional wisdom ascribes the current downturn, which in many ways is already the postwar's deepest one, as a financial-market crisis with origins in the bursting of a U.S. real estate bubble. But how did the demise of the American subprime mortgage market create earlier and much deeper recessions overseas than in the U.S. economy itself? Maybe there was something else going on, like triple-digit oil prices for example. If past oil shocks, like the two OPEC ones, created deep world recessions, why wouldn't the biggest oil shock of all be a logical suspect for triggering today's recession?