Fareed Zakria Considers the Irony

[umtalal]

hDon't Blame the Saudis
Consider the irony—one Bush administration reason for war in Iraq was to reduce our dependence on Saudi Arabia's oil

By Fareed Zakaria
Newsweek


Sept. 6 issue - Last week oil prices finally stopped rising. They now hover around $43 a barrel, a 20-year high. The average American family will spend about $2,700 on gasoline this year (driving 22,000 miles). That's twice as much as it spent on gas two years ago. These prices are having a predictable consequence. The consumer price index has risen 4.9 percent to date, versus 1.9 percent last year. And last week President Bush's economic adviser, Gregory Mankiw, acknowledged that a $10 rise in the price of oil probably translates into a half-percentage-point drag on economic growth. For countries like Japan, China and India, the effect is even greater. How did this happen? And can Washington—or anybody—do much about it?

The answer that flashed on our television screens is instability in the Middle East. Pipeline explosions in Iraq, tensions with Iran and terror attacks in Saudi Arabia all contribute to what analysts call the "security premium" on the price of oil. But that premium might be exaggerated. Oil prices are rising for broader, structural reasons. The world may have to get used to expensive oil.

http://www.msnbc.msn.com/id/5853718/site/newsweek/

[krkaufman]

1. Great article

Fareed indirectly states that John Kerry's plan for conservation will have a bigger impact on energy independence.

[CHIMO]

2. Blah Blah Blaaa

All of the above is true. There ain't more oil. Period.
Buy stocks in coal companies.

We are running out of cheap energy.