Paul Krugman, The New York Times, December 4, 2007
On both Wednesday and Thursday, the price of oil briefly hit $100 a barrel. The new record made headlines, as well it should have. But what does it mean, aside from the obvious point that the economy is under extra pressure?
Well, one thing it means is that we’re having the wrong discussion about foreign policy.
Almost all the foreign policy talk in this presidential campaign has been motivated, one way or another, by 9/11 and the war in Iraq. Yet it’s a very good bet that the biggest foreign policy issues for the next president will involve the Far East rather than the Middle East. In particular, the crucial questions are likely to involve the consequences of China’s economic growth.
Turn to any of several major concerns now facing America, and in each case it’s startling how large a role China plays.
Start with the soaring price of oil. Unlike the oil crises that followed the Yom Kippur War and the overthrow of the shah of Iran, this crisis wasn’t caused by events in the Middle East that disrupted world oil supply. Instead, it had its roots in Asia.
Volt, the rest of the article is gone. it was good too.
The FairTax would go a long way in making us competitive with the Chinese.
Comment by grimgold — January 5, 2008 @ 8:17 pm
The above article is basically another chicane by the royal OPEC members.
What has been disrupted is the flow of American dollars that would have been used to pay for crude oil.
in 1972 OPEC was formed when geoligist’s realised that the United States had passed the point of diminishing returns,
One of the main points of the OPEC accord was that all crude oil sold by OPEC member countries would be paid for in American Dollars.
So the American Dollar would become king of all currency for almost thirty years until member nations of G.W.Bush’s axis of evil decided to start using the Euro,In the case of Irag,Sadaam
wanted to use the Euro to work-around the UN food for oil sanctions and devalue the dollar.
Iran and North Korea soon followed suit and Sadaam was made an example of by the coalition of the willing,
then the five hundred pound gorilla came into the room and made itself at home and the Bush administration tried diplomacy instead of its usual threats and demands.
I think that sums it up.
Comment by Rainlander — January 6, 2008 @ 12:20 pm
Read the whole thing Grimmy.
How is cutting the tax rates of the wealthy going to help us with our trade deficit?
–Volt–
Comment by Volt — January 6, 2008 @ 8:12 pm